So long as there’s demand for something there will be someone somewhere who will try and make a profit off of it. This can be seen with the sheer number of PS5’s & XBox X/S series being sold on sites such as eBay & Facebook Marketplace by people in bulk. These scalpers are taking advantage of the high demand by shorting the supply even more by buying as many as possible in order to increase the “street price” by up to 3 times the sale price. It’s not a new concept, ask any festival goer and they will tell you all about scalpers, but what damage is this doing on the industry and how can we stop it? This is what I will look at answering today.
Scalping is when products are bought (usually but not exclusive to shares or tickets) in order to be quickly sold for a profit. This is usually done as in buying up products, especially in bulk, it will increase demand and as such increase the price people will be willing to pay. This is evident in the current situation surrounding the next-gen consoles. Scalping is not illegal but it is very much frowned upon by the general community as it seen as a way for those who have the capital to purchase several consoles to profit from those who don’t .
Now why is this such a bad thing? First and foremost, it means that there are less consoles available for people like you and me that want one to use and play on. This creates a greater demand and as such elevates prices as less PS5’s become available. Next is the effect on the manufacturer, now I can imagine at some point people will be thinking “If consoles are being sold, be them to ordinary users or scalpers Sony is still profiting from them aren’t they?”. Normally this would be true but in the case with games consoles it’s not. This is because consoles, especially at launch are sold at a loss to the manufacturer. The loss is offset by the sale of games, which is why you usually find consoles after release being bundled with several games and added products such as extra hardware or films. Given that each console in the hands of a scalper means that there is 1 less person buying games for that console, the more consoles being held in storage, the less games are being sold. In fact stats show that in Japan by the end of December PS5 games were being sold at a rate for 1 game for every 3 consoles sold. It’s true that these figures only included physical disks and not digital games but that still wouldn’t account for the dramatic short fall.
So what can be done to stop scalpers? The UK government is looking into measures to put measures in place to stop the inflation of prices of used hardware given the rise of not just private scalpers but even UK based second hand goods chain CEX started advertising PS5’s for up to £900 a console. In order to have the best chance of buying as many consoles as quickly as possible scalpers will tend to use buying bots that are programmed to wait in online queues and buy the consoles once the queues open or to. Each group of scalpers can have hundreds of these bots waiting in queues across many online retailers. Some retailers (although very little) are taking steps to counter scalpers. UK based video game retailer Game, have committed to fighting against scalpers after a twitter user bragged about managing to purchase over 2000 PS5’s from the retailer. Since then all pre-orders from game are subject to 1 unit per customer and all pre-orders are checked after order confirmation has been sent with the retailer having the right to cancel any suspicious orders.
What can we do as consumers against the scalper blight. Sadly, we can do very little. As mentioned before there isn’t any laws against scalping itself, although some online platforms won’t allow scalpers to use their services, as such the best thing to do is report these sellers removing their selling platforms. Apart from this the only other thing we can do is to not buy from scalpers. If the scalpers have no one to sell to they will stop what they are doing. I can imagine it’ll be hard for some people, especially if pressured by a child or loved one, but in the end these leeches prey on those pressures to make money. These people do not deserve your hard earned money. Do not let them win.
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