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The PS5 and Xbox Series X are the most popular items this season, and their popularity is driving prices up at unofficial retailers. It’s a trend we’ve seen in another industry, on a much more regular basis – the second-hand market reacts the same when there’s a limited version of sneakers from brands like Nike or Air Jordan.
That’s an apt comparison, says Professor Jemayne Lavar King, assistant professor of English at Johnson C. Smith University and author of Sole Food: Digestible Sneaker Culture. Professor King says the way customers are reacting to the hard-to-find PlayStation 5 – creating soaring demand and prices at second-hand retailers – is part of a consumerist trend that has developed over the years. years in large part because of the boom in sneaker culture.
“The same people who would pay $ 500 for a pair of Nike Dunks, or maybe a pair of Air Jordans, or whatever shoe that happens to be in demand right now – these are the same people who also play the latest consoles. “said Professor King. He says the same consumer culture for sneakers has caused shoppers to pay more for something that they can potentially get cheaper if they wait.
21st century customers
The first signs of trouble started when the PS5 suddenly became available for pre-order at various retailers, although Sony promised the pre-order date wouldn’t come as a surprise. Notifications that the PS5s were sold out quickly followed.
Even the Xbox Series X, which announced its pre-order date weeks in advance, faced similar shortages. It seemed like anyone who couldn’t get a preorder was suddenly faced with the reality that they might not be able to get a new system, even by the end of this year.
In the void of any official retail listing, scalpers have moved in, selling PS5s for sometimes triple the retail cost on sites like eBay and Craigslist.
An overview of the prices of the PS5 on eBay. Captured by IGN.
“We know there will be plenty of PlayStation 5s over the holiday season. But entrepreneurs are capitalizing on the culture of pacemaking, the pick-me culture, the “I have and you don’t” culture. It’s the same marketing, ”says Professor King. He succinctly compares it by saying that the used console market is “the same offense in a different sport” as the sneaker market.
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Even official retailers are imitating the marketing strategies pioneered by streetwear fashion. Sony has announced that it will open a limited number of PS5 orders directly to its most loyal PlayStation customers, and other retailers have created digital queues for the next batch of PS5 or Xbox Series X sales, with a date and a precise time for the end of the sale. live.
This is also known as ‘drop’, a term that started out simply as referring to a product release, but has become synonymous with the streetwear industry thanks to brands like Supreme, whose product drops have led Many fans zealous to camp out of stores for days tagging items emblazoned with the red Supreme logo.
The digitalization of gout is already well underway with sneaker brands. Nike’s SNKRS app offers a schedule of upcoming releases that customers can sign up to be notified when they go on sale. Valuable customers enjoy early pre-order privileges, much like how Sony sent out unique PS5 pre-order invitations to loyal PlayStation gamers.
Supply and demand
Earlier this year, analysts wondered if the new consoles would be delayed due to the current Covid-19 pandemic, but Sony and Microsoft have repeatedly assured customers that these systems will be available in time for the holidays.
What both manufacturers have warned – on several occasions, in fact – is that there could be shortages. That there may not be enough consoles in 2020 for everyone.
But a PS5 and Xbox Series X aren’t like limited sneakers. Some shoes, once sold out, are no longer produced, increasing their collectible resale value. The PS5 and Xbox Series X are consumer goods and will be in production for years to come.
And yet the language of console makers has generally been to shed light on shortages: Microsoft CFO Tim Stuart says the demand for the Xbox Series X and S is huge and thinks, “We’ll continue to see supply shortages as the holidays approach. quarter, so Microsoft’s Q3, calendar Q1 [the period ending March 31, 2021]. “
Sony Interactive Entertainment CEO Jim Ryan said in a recent interview that “everything is sold. Absolutely everything is sold. I’ve spent much of the past year trying to make sure we can generate enough demand for the product. And now, in terms of executive bandwidth, I’m spending a lot more time trying to increase supply to meet that demand. “
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When even the executives of the companies that create them tell us that they don’t have enough consoles for everyone, it’s probably no wonder that all of the social media offer hunters are blowing up links to digital stores that may have a drop from PS5 or Xbox. X-series butt. I pre-ordered PS5 myself, not from a traditional retail channel, but through a sneaker deals Twitter account.
Professor King doesn’t see these corporate announcements as excuses – he sees a tactic: “This particular strategy is about building – and it happens in everything – you want to create anticipation. And there is a false pretense. You know – I know these units will be readily available, but to make money up front you create the illusion that there won’t be as much. You just don’t recognize the fact that we’ll have more soon.
Creating a narrative of rarity has been a steal for sneakers, and it could be a steal for console makers as well. There certainly seems to be an increased fervor to acquire a new console in part due to their rarity.
This scarcity is exacerbated by factors beyond the control of Sony and Microsoft. While there may be elements of marketing engineering at work, driving the hype and in turn demand, we’ve also seen scalpers using tools like bots to choose retail sites and buy. PS5 and Xbox Series X stock before customers could get a chance to do so. order one at retail.
Commercial robots have been around for years and are used to purchase all types of items online, such as concert tickets. But they have become particularly aggressive when it comes to sneakers and streetwear. Bird Bot, a retail bot used to buy Nintendo Switch stock, was originally developed by a sneakerhead who learned to program robots trying to buy sneakers.
Reports have revealed that a group of resellers based in Europe have purchased nearly 3,500 PS5 consoles through bots, in some cases ensuring that resellers are the only place some customers can acquire the wanted console.
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To make matters worse, the Robot Law of 2016 only prohibits the use of robots when purchasing digital tickets. Robots for popular holiday shoes and gifts are still technically legal, though they are against individual store terms of service.
What has emerged is a perfect storm where the video game console market and 21st century consumerism trends collide. Considering that in the past, the obstacle to acquiring a new console or a new shoe could be strictly financial, that is to say not having the necessary funds to purchase the desired item; it is no longer enough to have the money. Customers are expected to come first, whether competing with digital robots or other customers who have more time available to queue – physical or digital – for the same item.
While Covid-19 may have had a unique impact on uptime – something we won’t fully understand until concrete sales and production numbers are released – it’s also not unfair to say. that some of these conditions were created by retailers who wish to increase. request. The console’s marketing cycle effectively began in 2019, pre-COVID, and anticipation for the PS5 and Xbox Series X has been building ever since.
Spurred on by a chaotic pre-order experience, an official communication from the company that stock remains scarce, and robots that remain legally questionable, we find ourselves in a situation where hype and scarcity are driving customers into an unfair gray market. who has had a lot of experience charging desperate customers a bounty.
An overview of Xbox Series X pricing on eBay. Captured by IGN.
While writing this article, I scoured retailers like eBay to find the list price of a PS5 in the used market. Although some listings fetch $ 2,000, a search of the listings sold reveals that customers typically buy used PS5s for around $ 950, but can go as high as $ 1,200. That’s a staggering price tag compared to the suggested retail price of $ 499 for the PS5.
But Professor King says these rates of increase are typical of the sneaker market. “How much is a sneaker worth?” A sneaker is worth what someone is willing to pay. How much is a console worth? Well, a console is worth whatever someone is willing to pay, and usually someone is willing to retail plus half of what it costs. “
As of this writing, one retailer on eBay is selling a PS5 disc version for $ 1,699.99. EBay’s website says this seller has already sold 33 units, and a notification below the listing reads in bright bold red: “Almost gone.“
Matt TM Kim is a reporter for IGN.
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