But, yeah, blame the players and not those that could shut down the game any time they like.
I would have been happy to place an order and then wait a year. Instead I did the follow a guy on twitter to find out when consoles are available and then use Firefox containers to make a bunch of simultaneous orders. It worked, but I’d rather just pay some money and sit in a queue.
where the buy button should be, they instead invite you to sign up for email notifications for when it's in stock
AT&T losing their iPhone privileges would hurt them far more than Target or Walmart would from losing their PlayStation privileges.
Before implementing a system where you can place your order before the device goes on sale, the issue Apple had was that they didn't have enough manufacturing throughput to launch products in all nations simultaneously.
>People wait in line at an Apple store to buy the newest iPhone for $600, paying a premium to skip the AT&T contract. They then sell the phones to middlemen, usually at electronics stores in Chinatown, for about $750.
The phones are shipped off to China, where the iPhone 4 is not yet on sale, and are distributed to local shops and e-commerce sites, where they sell for as much as $1,000.
https://www.nytimes.com/2010/09/23/technology/23iphone.html
You can fix the problem of customers being ripped off by scalpers while manufacturing ramps up, but companies choose not to do so.
Sony has been selling PlayStations for 23 years and still can’t figure out how to meet demand?
Sony is only expected to produce 18 million units this year. Reports are that Apple is going to “limit” iPhone production to around 220 million (https://www.bangkokpost.com/tech/2316406/apple-to-keep-iphon...).
Why can’t Sony produce as many PS5’s in a year as Apple produces iPhones in a month?
With that said, that does not excuse Sony. They have had time to figure some basic solutions out. When I bought my 5900X I had to wait almost 6 months but I eventually got it because I was able to order it at launch even though it was already sold out.
Let people put up a small deposit as well for getting a place in the queue, and it'll be deducted whenever you buy the machine. Keep the deposit if you cancel your place in line. Would incentivize less manipulation as well.
I've been trying to get a PS5 for 2 years now, and I refuse to pay some scalper 200USD more than market price, out of principle. (But I guess that is also why I still don't have one :) )
Don't pay scalpers, just use technology as your friend :) An old coworker did something similar but he wrote a chrome extension to do the same.
I'm sorry if someone uses this knowledge to scalp nextgen systems.
If it's been 2 years I think you have been underestimating the market price of a ps5.
Assuming the scalpers are able to sell their supply, what they're charging is the market price.
(But I guess that is also why I still don't have one :) )
Yup.
Are you trying to suggest the situation is somehow optimal? Market prices in short supply situations cause market inefficiencies, and this is one of them. The old platitude is that this inefficiency is only less bad than what would happen otherwise. Of course that thinking is rarely put forth with careful thinking about the alternatives, nor admissions of the many times in history that preventing inefficiencies actually worked.
Wouldn’t it be better if Sony received the market value themselves, and invested the money in the PS6? Wouldn’t it be better if we were not encouraging people who add negative value to the system to create artificial scarcity merely for the purposes of extracting extra dollars? The problem with your argument is that for markets to be free, customers need both choice and access to information, and supply needs to be able to meet demand. Scalpers hoarding are effectively an anti-free-market force on top of inducing inefficiency for profit. It’s a schadenfreudey bonus when scalpers get stuck with supply because they overestimated demand, but that doesn’t actually amount to a market correction, it just adds even more inefficiency, money wasted on top of money wasted.
Of course. The best outcome would have been for them to start with something like a cosmetically different "founders edition" that's more expensive and then to release the normal version when supply becomes available. But they decided not do to that, probably because the same people screaming about scalpers would vilify them for "price gouging" (which for nonessential products is a silly concept).
Wouldn’t it be better if we were not encouraging people who add negative value to the system to create artificial scarcity
The scarcity isn't artificial. There are more people who want to buy a PS5 at MSRP than there are PS5s. Scalpers are only adding to scarcity if they're sitting on inventory they're not selling, which there's no incentive for them to do.
The problem with your argument is that for markets to be free, customers need both choice and access to information
What choice or information do customers lack? If you want a PS5 your choices are to pay market price to a scalper, or spend a lot of time watching stores or running bots and trying to get lucky. This is all widely known.
Are you trying to suggest the situation is somehow optimal?
Obviously the optimal situation is for the shortage to be eliminated. The next best is for Sony to charge the market-clearing price. With both of those off the table, then probably the current situation is the best available. Do you have a better solution?
Pre-ordering with a deposit is definitely a very creative/smart accounting hack that Tesla (and Amazon) has used pretty effectively. It creates a negative cash conversion cycle (get the money upfront from your customer before you have to pay your suppliers) - which is highly profitable - especially when there is known demand.
Your playstation, on the other hand, requires you to buy two or three games, and if the games aren't there yet for mass market appeal or sufficient genres, well, the console will still be there in four years when the games catch up, and your iphone will be out of date in six months.
In both the manufacturers and scalpers minds, nobody would bother scalping an iPhone - the margin was already sucked out of it and it has a shorter shelf life; In the case of a console, the margin won't be had for a few years, but none of it flows to the casual scalper, so it's a lot of work for 100$ - they'll do it, but it's a grind.
But either way, people are happy to wait in line for the latest fondleslab, and they get it when it's their turn
Source? This has not, to the best of my knowledge, been true in console production for a very long time.
To me a more persuasive argument, with the lack of evidence, might be that part of the supply crunch is being unwilling/unable to raise the price and so being less able to ship units than if they could be more price flexible.
This of course could be part of the problem—Sony may be unwilling to spend a premium to reserve more processors in advance as they already are operating on razor thin margins. Apple, on the other hand, pays TSMC far in advance and helps fund their research to get priority.
So without scalpers you have to wait until supply catches up, while with scalpers you can either wait until supply catches up or you can pay extra if you really want it now. How is the first scenario better?
as is, Sony has been doing a "sign up to be notified" thing where by the time I see the notification they're sold out again. Just let me put in my order and get it to me when you can.
if enough people take that deal, scalpers have a smaller and smaller market
They know local markets, and it's easier to deal with a few of them than all the consumers. For a heck of a lot of businesses.
Apple is pretty special in that they've got the whole consumer end themselves.
that no one is doing this... maybe it has something to do with the fact that it would show up as a liability in accounting until they deliver the product
There are plenty of retail outlets that are more than happy to sell Apple products while Apple also sells...
It wasn't just a queue, though. It was a time limited shuffle of the pool of people who saw a notification with enough time to join the lottery. It still took me months of attempts.
It leads me to believe these companies do not really care enough to implement the systems to fix this or that they actually like the artificial scarcity as it fuels additional demand. The fact that they can figure out how to implement live lottery systems, sadly, makes me conclude it is the latter.
I personally flatly refuse to pay over retail price or lineup outside of a store for the “opportunity” to buy something. Nothing is going to change if people keep paying a premium for products be it an SUV or a PS5.
Who cares about everything else?
Retailers do not have this kind of power. If Best Buy pre-sells more iPhones than they have inventory for, there's nothing obligating Apple to actually sell those iPhones to those customers through Best Buy. Apple could decide tomorrow to cut Best Buy's allocation because AT&T needs them for a big customer promo. Compounding this is the fact that almost all retail businesses are cash-flow limited. Their job isn't to buy things and sell them at 1% markup, it's to predict the future three months ahead of time so that products arrive on shelves exactly when they will be purchased. In other words, they're futures traders that take physical delivery. So every dollar they get needs to be spent on more inventory, or they run out of things to sell.
This means that, in the event of an iPhone shortage, Best Buy has two terrible options and one good one:
* Treat those iPhone orders as ordinary revenue and use it to order more stock of other products. If Apple cuts your allocation, then you have to refund your customers money that you don't have, meaning that you have to take out a loan on future revenue to pay back existing orders.
* Tie up your cashflow by holding that iPhone money in escrow until those orders are fulfilled. You don't take on the risk of not being able to refund orders, but now you are paying the opportunity cost of not being able to buy as much inventory three months down the line.
* Don't sell unallocated iPhones. Your customers will buy something else instead.
Now, could Apple extend their queue system beyond their own online store? Perhaps - but that requires a lot of coordination from other retailers who would rather just be able to move product quickly. The flip side of the cash flow problem I mentioned above is that, if a product doesn't move quickly, retailers want to get rid of it quickly to cut their losses and take a chance on something else. A good example of this would be the iPhone SE 3rd gen, which sold like garbage. Under the current arrangement of retailers getting allocation and buying inventory, Best Buy can at worst fire-sale iPhones nobody wanted. But with a queue system, they're either...
* Just drop-shipping iPhones from Apple to customers, which means they can't have in-store inventory
* Holding inventory they can't sell unless Apple lets them, which means they're letting iPhones live rent-free in their warehouse tying up cash flow.
The "just let me queue up" model is something that works out great for customers, but makes the rest of the business a lot harder, because modern supply chains are not designed for shortages.