4 ms·

I never understood why the retailers of these consoles don't adjust their prices to reflect the demand, so that there's at least some supply. When the PS5 first

by daenz 4y ago

I never understood why the retailers of these consoles don't adjust their prices to reflect the demand, so that there's at least some supply. When the PS5 first came out, for example, the price with retailers was like 1/4th of the price on ebay, and it was impossible to buy from the retailers. Wouldn't it be better for everyone if the retailers adjusted the prices? At least then, the incentive to be a reseller/scalper would diminish to nothing, which means you don't pay for their premium.

blitzar 4y ago
> Wouldn't it be better for everyone if the retailers adjusted the prices? They have - you could buy a console bundled with a game, headset and a tshirt for huge markups.
qwery 4y ago
- Consoles in stockrooms are not making money for the retailer or the platform/brand/manufacturer. - Sales figures (units shipped) are a marketing point. A product being so in demand that it makes the news is a free marketing campaign. - Retailer got so many units to sell at a margin/price they already decided on. The fact that the stock moved out the door is a win already. Customers coming inside to find out that there are no PS5s are customers inside the shop. - It seems likely that Sony/whoever may have some control over the pricing. Whether this is a formal agreement or a gentle suggestion, ignoring or breaking that deal would presumably (at least) sour the relationship. - Surely the retailer that moves first would lose business to their competitors. I guess at that point, the competitor/s run out of stock and now the first mover is the scalper? - If we're assuming that the retailers have some altruistic motive, they could implement strategies to combat the bots / buying en masse. This does not appear to be something they are interested in. > Wouldn't it be better for everyone if the retailers adjusted the prices? The people who are already priced out will be in the same situation, except now it's the "good guys" doing price gouging. The scalpers will have lost their business to the retailer I guess.
ChuckNorris89 4y ago
Because then they would get the backlash and bad PR instead of scalpers.
- deleted 4y ago
  [deleted]
- daenz 4y ago
  And the bad PR would be something along the lines of "company gouges prices to screw customers." Yeah, I think you're right. So it has to play out this way, with people paying a scalper's premium, and sometimes getting totally scammed. Really unfortunate.
- seunosewa 4y ago
  They can sell it as a temporary measure to drive scalpers out of business.
  - colinmhayes 4y ago
    Scalpers aren't a "business" in that sense. They have no fixed costs, so they can just ramp up and down as needed. Most of these scalpers are just dudes with a spare bedroom and some code they bought.
  - sio8ohPi 4y ago
    Scalpers can't really be driven out of business because it's fundamentally just arbitrage. If an arbitrage opportunity goes away, they'll go away, but they'll come back as soon as the opportunity returns. Even if the price moves suddenly and they're forced to take a haircut, the low barrier to entry means other resellers can enter the market.
TAForObvReasons 4y ago
They already de-facto did this. There were times where Best Buy and Walmart had supply, but you had to sign up for a subscription service like Walmart+ to be able to purchase. GameStop had a few "bundles" with a bunch of items that you wouldn't otherwise purchase, effectively raising the price. It just didn't make a dent when the actual eBay margin was $X00 over the retailer pricing
- bombcar 4y ago
  Exactly. If they can (and the supply issue will continue for awhile) you’ll find that app that’s available is bundled. Which isn’t quite as bad as pure scalping but what they add is often high margin product. What would be nice is to see more “proceeds over retail to charity” type deals.
shahbaby 4y ago
Good question. I think it's for the same reason why car manufacturers don't like it when dealers sell over MSRP; it hurts the long term customer relationship. Higher MSRP means fewer buyers which means fewer services, repairs, etc. More expensive consoles means fewer owners, fewer people buying console games and subscriptions.
- ianai 4y ago
  Right, the console isn't the source of most of the revenue (or any, some have been losses). The point is to get them being used with newly purchased games/accessories. The scalpers are actually taking money away from the console manufacturer for the period of time the console is held by the scalper. They're also scalping revenue off the top of the console and having a negative income effect upon the end user/customer of the console - which definitely negatively affects how much the end user/customer winds up sending to the manufacturer.
- josephcsible 4y ago
  > Higher MSRP means fewer buyers But if you're selling them faster than you can make them, this isn't really true.
  - ajsnigrutin 4y ago
    The usual price cycle is MSRP at the start of sales, then a few sales at some retailers, then slowly "old model" sales, when a new model comes out, and finally "final sales", when they're trying to get rid of the stock, and we all know and expect that. If you buy a car for 50k, and it's 30k 6 months later, while still being a new model, you feel screwed by the company, and next time, you'll delay your purchase until the price drop (even if the price is a good price and won't drop). As before, if the price drops after a new model comes out, people understand that, but if the price drops regularly after a few months the product is out, that's a whole different story.
  - colinmhayes 4y ago
    These retailers are selling much more than just the PS5. The customer relationship matters a lot to them. I doubt sony would let them upcharge even if they wanted to anyway.

by daenz 4y ago

blitzar 4y ago

> Wouldn't it be better for everyone if the retailers adjusted the prices? They have - you could buy a console bundled with a game, headset and a tshirt for huge markups.

qwery 4y ago

- Consoles in stockrooms are not making money for the retailer or the platform/brand/manufacturer. - Sales figures (units shipped) are a marketing point. A product being so in demand that it makes the news is a free marketing campaign. - Retailer got so many units to sell at a margin/price they already decided on. The fact that the stock moved out the door is a win already. Customers coming inside to find out that there are no PS5s are customers inside the shop. - It seems likely that Sony/whoever may have some control over the pricing. Whether this is a formal agreement or a gentle suggestion, ignoring or breaking that deal would presumably (at least) sour the relationship. - Surely the retailer that moves first would lose business to their competitors. I guess at that point, the competitor/s run out of stock and now the first mover is the scalper? - If we're assuming that the retailers have some altruistic motive, they could implement strategies to combat the bots / buying en masse. This does not appear to be something they are interested in. > Wouldn't it be better for everyone if the retailers adjusted the prices? The people who are already priced out will be in the same situation, except now it's the "good guys" doing price gouging. The scalpers will have lost their business to the retailer I guess.

ChuckNorris89 4y ago

Because then they would get the backlash and bad PR instead of scalpers.

deleted 4y ago
[deleted]
daenz 4y ago
And the bad PR would be something along the lines of "company gouges prices to screw customers." Yeah, I think you're right. So it has to play out this way, with people paying a scalper's premium, and sometimes getting totally scammed. Really unfortunate.
seunosewa 4y ago
They can sell it as a temporary measure to drive scalpers out of business.
- colinmhayes 4y ago
  Scalpers aren't a "business" in that sense. They have no fixed costs, so they can just ramp up and down as needed. Most of these scalpers are just dudes with a spare bedroom and some code they bought.
- sio8ohPi 4y ago
  Scalpers can't really be driven out of business because it's fundamentally just arbitrage. If an arbitrage opportunity goes away, they'll go away, but they'll come back as soon as the opportunity returns. Even if the price moves suddenly and they're forced to take a haircut, the low barrier to entry means other resellers can enter the market.

TAForObvReasons 4y ago

They already de-facto did this. There were times where Best Buy and Walmart had supply, but you had to sign up for a subscription service like Walmart+ to be able to purchase. GameStop had a few "bundles" with a bunch of items that you wouldn't otherwise purchase, effectively raising the price. It just didn't make a dent when the actual eBay margin was $X00 over the retailer pricing

bombcar 4y ago
Exactly. If they can (and the supply issue will continue for awhile) you’ll find that app that’s available is bundled. Which isn’t quite as bad as pure scalping but what they add is often high margin product. What would be nice is to see more “proceeds over retail to charity” type deals.

shahbaby 4y ago

Good question. I think it's for the same reason why car manufacturers don't like it when dealers sell over MSRP; it hurts the long term customer relationship. Higher MSRP means fewer buyers which means fewer services, repairs, etc. More expensive consoles means fewer owners, fewer people buying console games and subscriptions.

ianai 4y ago
Right, the console isn't the source of most of the revenue (or any, some have been losses). The point is to get them being used with newly purchased games/accessories. The scalpers are actually taking money away from the console manufacturer for the period of time the console is held by the scalper. They're also scalping revenue off the top of the console and having a negative income effect upon the end user/customer of the console - which definitely negatively affects how much the end user/customer winds up sending to the manufacturer.
josephcsible 4y ago
> Higher MSRP means fewer buyers But if you're selling them faster than you can make them, this isn't really true.
- ajsnigrutin 4y ago
  The usual price cycle is MSRP at the start of sales, then a few sales at some retailers, then slowly "old model" sales, when a new model comes out, and finally "final sales", when they're trying to get rid of the stock, and we all know and expect that. If you buy a car for 50k, and it's 30k 6 months later, while still being a new model, you feel screwed by the company, and next time, you'll delay your purchase until the price drop (even if the price is a good price and won't drop). As before, if the price drops after a new model comes out, people understand that, but if the price drops regularly after a few months the product is out, that's a whole different story.
- colinmhayes 4y ago
  These retailers are selling much more than just the PS5. The customer relationship matters a lot to them. I doubt sony would let them upcharge even if they wanted to anyway.