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> But no one says there is a need for this extra liquidity. The fact that scalpers can sell the consoles for a much higher price shows that there is no market

by q-big 4y ago

> But no one says there is a need for this extra liquidity. The fact that scalpers can sell the consoles for a much higher price shows that there is no market equilibrium with respect to the prices that the console vendors set. To achieve this, console producers could choose two strategies: a) increase production b) increase prices a is impossible because of chip shortages, so b would be the way to choose to achieve "supply = demand" (i.e. everybody who is willing to pay the market price will get a console). Since console producers are not willing to do this move (perhaps for "marketing reasons" à la "our console is this cheap"), scalpers will make use of this market inefficiency, and ensure that the prices are those where there is a market equilibrium. So, scalpers change the situation from "there is more demand than supply" to "supply = demand", making the market balanced. Thus, the existence of scalpers is rather are sign that the console producers chose a price that is too low. The existence of scalpers is thus a mere symptom of the bad pricing decision of the console producers.

babypuncher 4y ago
There is a third option, a queuing system similar to what Apple does for their product launches. It would not eliminate scalping entirely. But being able to put your money down today and see that your new iShiny will be delivered in 6-8 weeks helps mitigate FOMO and gives you a number that can actually be used to measure the "value" provided by premium scalper prices.
- q-big 4y ago
  > There is a third option, a queuing system similar to what Apple does for their product launches. It would not eliminate scalping entirely. I don't see how this solves the problem: what prevents the people who want their iGadget faster paying a larger price to a scalper? > But being able to put your money down today and see that your new iShiny will be delivered in 6-8 weeks helps mitigate FOMO As far as I am aware, there do exist (even quite some) vendors who offer the option of paying immediately and sending you the new XBox or PlayStation as soon as they get their delivery. This is a queuing system.
  - babypuncher 4y ago
    > I don't see how this solves the problem: what prevents the people who want their iGadget faster paying a larger price to a scalper? >> > But being able to put your money down today and see that your new iShiny will be delivered in 6-8 weeks helps mitigate FOMO That is my answer. > As far as I am aware, there do exist (even quite some) vendors who offer the option of paying immediately and sending you the new XBox or PlayStation as soon as they get their delivery. This is a queuing system. The difference between those and what Apple is doing is that Apple gives you fairly accurate estimate on when your iShiny will ship, and Apple prioritizes their direct to consumer inventory to make sure those ship times remained reasonable even for their most in demand products at the height of the silicon shortage in 2021. Most of the online stores I've seen offering queues are smaller retailers without enough pull to get consistent inventory from manufacturers, and being the only sellers offering a queue at all meant they got flooded with more orders than their meager allotments from those manufacturers could ever hope to fulfill.
nicoburns 4y ago
Option C, you don't sell your product on an open market an actively prioritise some customers over others.
- blitzar 4y ago
  It turns out that is what the graphics card makers were doing - but the priority queue were crypto miners and scalpers ...
eropple 4y ago
> The existence of scalpers is thus a mere symptom of the bad pricing decision of the console producers. Alternate character interpretation: these companies understand that this is a reasonably sustainable price for their customer base, that moving away from those "bad pricing decisions" will alienate their customers, and that scalpers should be put in trash skips and rolled down steep hills. Not every profit need be maximized immediately and without hesitation and scalpers need not exist. More than one thing is allowed to be true.
- cowtools 4y ago
  >Alternate character interpretation: these companies understand that this is a reasonably sustainable price for their customer base, It's not sustainable. It's being sold for too low relative to demand, so they would all just be sold out at that price. The scalpers don't change the supply. >that moving away from those "bad pricing decisions" will alienate their customers, and that The customers can choose to be irrationally angry about whatever they want. >scalpers should be put in trash skips and rolled down steep hills. What is all this anger for? We're not talking about scalping food and water here. These are skinner's boxes. Time wasting machines. It's all just a locked-down waste of silicon that will not be reused and in another ten years everyone will be throwing their PS5s out for a newer console that does the exact same thing. You want a PS5? You want an Xbox? Buy a PC with integrated graphics. it's the same damn thing, except it will actually be useful for something after you're done playing games on it. >Not every profit need be maximized immediately and without hesitation and scalpers need not exist. More than one thing is allowed to be true. It doesn't matter what your opinion of scalpers is. So long as people misvalue things on the open market, there will be traders ready to make a quick buck off of their ignorance.
  - qwery 4y ago
    What is all this anger for? > The scalpers don't change the supply. They control it, they constrict it -- how would you describe it? > So long as people misvalue things on the open market, there will be traders ready to make a quick buck off of their ignorance It's not an open market -- it's been/being manipulated (trivially, apparently) by the scalpers to suit their ends. What is the true value that the people are ignorant of? Why do you think there is such a discrepancy? How is "making a quick buck" by conning the ignorant morally justifiable? How does it add value to society?
sio8ohPi 4y ago
> a is impossible because of chip shortages It's nothing specific to recent supply chain disruptions. The problem is that manufacturers have relatively inflexible capacity. Scaling foundry capacity isn't as easy as scaling cloud resources; they can't just decide to produce 10x as much product in a given month. Simultaneously, these are status goods for which consumers place a high premium on having the latest and greatest. Even with perfectly functioning supply chains, the market price for such goods is always going to be high on release and taper off as supply increases.
- zamadatix 4y ago
  Initially sure but this has been nearly 2 years now. Even the Switch which had severe shortages 4 years after release.

by q-big 4y ago

babypuncher 4y ago

There is a third option, a queuing system similar to what Apple does for their product launches. It would not eliminate scalping entirely. But being able to put your money down today and see that your new iShiny will be delivered in 6-8 weeks helps mitigate FOMO and gives you a number that can actually be used to measure the "value" provided by premium scalper prices.

q-big 4y ago
> There is a third option, a queuing system similar to what Apple does for their product launches. It would not eliminate scalping entirely. I don't see how this solves the problem: what prevents the people who want their iGadget faster paying a larger price to a scalper? > But being able to put your money down today and see that your new iShiny will be delivered in 6-8 weeks helps mitigate FOMO As far as I am aware, there do exist (even quite some) vendors who offer the option of paying immediately and sending you the new XBox or PlayStation as soon as they get their delivery. This is a queuing system.
- babypuncher 4y ago
  > I don't see how this solves the problem: what prevents the people who want their iGadget faster paying a larger price to a scalper? >> > But being able to put your money down today and see that your new iShiny will be delivered in 6-8 weeks helps mitigate FOMO That is my answer. > As far as I am aware, there do exist (even quite some) vendors who offer the option of paying immediately and sending you the new XBox or PlayStation as soon as they get their delivery. This is a queuing system. The difference between those and what Apple is doing is that Apple gives you fairly accurate estimate on when your iShiny will ship, and Apple prioritizes their direct to consumer inventory to make sure those ship times remained reasonable even for their most in demand products at the height of the silicon shortage in 2021. Most of the online stores I've seen offering queues are smaller retailers without enough pull to get consistent inventory from manufacturers, and being the only sellers offering a queue at all meant they got flooded with more orders than their meager allotments from those manufacturers could ever hope to fulfill.

nicoburns 4y ago

Option C, you don't sell your product on an open market an actively prioritise some customers over others.

blitzar 4y ago
It turns out that is what the graphics card makers were doing - but the priority queue were crypto miners and scalpers ...

eropple 4y ago

> The existence of scalpers is thus a mere symptom of the bad pricing decision of the console producers. Alternate character interpretation: these companies understand that this is a reasonably sustainable price for their customer base, that moving away from those "bad pricing decisions" will alienate their customers, and that scalpers should be put in trash skips and rolled down steep hills. Not every profit need be maximized immediately and without hesitation and scalpers need not exist. More than one thing is allowed to be true.

cowtools 4y ago
>Alternate character interpretation: these companies understand that this is a reasonably sustainable price for their customer base, It's not sustainable. It's being sold for too low relative to demand, so they would all just be sold out at that price. The scalpers don't change the supply. >that moving away from those "bad pricing decisions" will alienate their customers, and that The customers can choose to be irrationally angry about whatever they want. >scalpers should be put in trash skips and rolled down steep hills. What is all this anger for? We're not talking about scalping food and water here. These are skinner's boxes. Time wasting machines. It's all just a locked-down waste of silicon that will not be reused and in another ten years everyone will be throwing their PS5s out for a newer console that does the exact same thing. You want a PS5? You want an Xbox? Buy a PC with integrated graphics. it's the same damn thing, except it will actually be useful for something after you're done playing games on it. >Not every profit need be maximized immediately and without hesitation and scalpers need not exist. More than one thing is allowed to be true. It doesn't matter what your opinion of scalpers is. So long as people misvalue things on the open market, there will be traders ready to make a quick buck off of their ignorance.
- qwery 4y ago
  What is all this anger for? > The scalpers don't change the supply. They control it, they constrict it -- how would you describe it? > So long as people misvalue things on the open market, there will be traders ready to make a quick buck off of their ignorance It's not an open market -- it's been/being manipulated (trivially, apparently) by the scalpers to suit their ends. What is the true value that the people are ignorant of? Why do you think there is such a discrepancy? How is "making a quick buck" by conning the ignorant morally justifiable? How does it add value to society?

sio8ohPi 4y ago

> a is impossible because of chip shortages It's nothing specific to recent supply chain disruptions. The problem is that manufacturers have relatively inflexible capacity. Scaling foundry capacity isn't as easy as scaling cloud resources; they can't just decide to produce 10x as much product in a given month. Simultaneously, these are status goods for which consumers place a high premium on having the latest and greatest. Even with perfectly functioning supply chains, the market price for such goods is always going to be high on release and taper off as supply increases.

zamadatix 4y ago
Initially sure but this has been nearly 2 years now. Even the Switch which had severe shortages 4 years after release.