Saturday, Nov 11, 2006
If I had to pick the one thing about console launches that angers me most it wouldn't be the lack of units or ridiculous pre-order and bundle policies. No, it would be console scalping and those who are proud of ripping people off.
Scalping, by definition, is the act of purchasing a product with the full intent of reselling it for a greater value (in the case of game consoles a much greater value). This is most frequently seen with sporting events and the scalping of tickets. Individuals who are looking to make a profit off of the desperation (or perhaps stupidity) of others with no qualms about ripping people off will buy up tickets and then resell them to patrons at inflated prices. Unfortunately there are no laws prohibiting such actions and these would-be rip-off artists go unchecked.
eBay is the preferred place of business for those scalping things other than tickets. Tickle Me Elmo was probably this first big case, with the toy going for values up to $1500. That's one-thousand, five-hundred dollars for a bunch of cloth wrapped around a voice-box that normally retailed for $30. The most prominent example of scalping I can think of was the Xbox 360 launch last year. Like Sony this year, Microsoft had a few manufacturing blunders and thus numbers were limited. As a result, many purchased a system and immediately put it up on eBay in order to rake in the profits. Granted, it's your own fault if you shell out over a thousand dollars for something that you could get much cheaper with a little patience. However, the way the scalpers carry themselves makes it hard to side with them.
The most aggravating thing is that most scalpers are proud of what they do. They're proud of the fact that some desperate middle-class parent just spent 400% retail on a system. There's a user here on GameSpot who I've seen a couple time who has the phrase "Proud seller of 4 Xbox 360's on eBay for a profit of" whatever the amount was in his signature. Now most of these individuals will tell you that it's just capitalism and supply and demand. Yeah, they wish.
Obviously no one is forcing these people to pay an arm and a leg for the systems...or are they? If Tickle Me Elmo proved anything it's that there are parents out there that are willing to use any means necessary to ensure their child has the hot Christmas item waiting under the tree. The scalpers recognize this and decide to make a profit off of it. The most common rebuttal I've seen from scalpers is the "supply and demand" argument. Yeah, scalpers are catering to a demand, but it's a demand they created. John Q. Gamer could have just gone to GameStop and grabbed the system himself, leaving the scalper with no demand to feed off of. Of course that just won't do so the scalper buys that system, thus taking one unit out of the supply and adding to the demand. So in essence, it's a giant scam that scalpers like to pass off as a legitimate supply and demand scenario.
The problem is obviously that people are willing to pay these ridiculous amounts. I understand that many parents want the whole Christmas Morning thing to be happy and devoid of crying and disappointment (and potential loss of belief in a certain someone) but the line has to be drawn somewhere right? Maybe it's just because I don't have kids but I can't see how paying $1500 for a freaking $30 plushie can be in any way justified, nor can I see paying $2500 for a $600 console (though that Tickle Me Elmo price really blows my mind). Promise the kids a system as soon as you can and tell them to enjoy the utilities and food in the meantime.
Though it'll never happen it'd be the ultimate (and awesome) justice if in the end all the scalpers were left with nothing to show for their efforts but a $600 debt and a system they never wanted. Ah well, I can dream.
Scalping, by definition, is the act of purchasing a product with the full intent of reselling it for a greater value (in the case of game consoles a much greater value). This is most frequently seen with sporting events and the scalping of tickets. Individuals who are looking to make a profit off of the desperation (or perhaps stupidity) of others with no qualms about ripping people off will buy up tickets and then resell them to patrons at inflated prices. Unfortunately there are no laws prohibiting such actions and these would-be rip-off artists go unchecked.
eBay is the preferred place of business for those scalping things other than tickets. Tickle Me Elmo was probably this first big case, with the toy going for values up to $1500. That's one-thousand, five-hundred dollars for a bunch of cloth wrapped around a voice-box that normally retailed for $30. The most prominent example of scalping I can think of was the Xbox 360 launch last year. Like Sony this year, Microsoft had a few manufacturing blunders and thus numbers were limited. As a result, many purchased a system and immediately put it up on eBay in order to rake in the profits. Granted, it's your own fault if you shell out over a thousand dollars for something that you could get much cheaper with a little patience. However, the way the scalpers carry themselves makes it hard to side with them.
The most aggravating thing is that most scalpers are proud of what they do. They're proud of the fact that some desperate middle-class parent just spent 400% retail on a system. There's a user here on GameSpot who I've seen a couple time who has the phrase "Proud seller of 4 Xbox 360's on eBay for a profit of" whatever the amount was in his signature. Now most of these individuals will tell you that it's just capitalism and supply and demand. Yeah, they wish.
Obviously no one is forcing these people to pay an arm and a leg for the systems...or are they? If Tickle Me Elmo proved anything it's that there are parents out there that are willing to use any means necessary to ensure their child has the hot Christmas item waiting under the tree. The scalpers recognize this and decide to make a profit off of it. The most common rebuttal I've seen from scalpers is the "supply and demand" argument. Yeah, scalpers are catering to a demand, but it's a demand they created. John Q. Gamer could have just gone to GameStop and grabbed the system himself, leaving the scalper with no demand to feed off of. Of course that just won't do so the scalper buys that system, thus taking one unit out of the supply and adding to the demand. So in essence, it's a giant scam that scalpers like to pass off as a legitimate supply and demand scenario.
The problem is obviously that people are willing to pay these ridiculous amounts. I understand that many parents want the whole Christmas Morning thing to be happy and devoid of crying and disappointment (and potential loss of belief in a certain someone) but the line has to be drawn somewhere right? Maybe it's just because I don't have kids but I can't see how paying $1500 for a freaking $30 plushie can be in any way justified, nor can I see paying $2500 for a $600 console (though that Tickle Me Elmo price really blows my mind). Promise the kids a system as soon as you can and tell them to enjoy the utilities and food in the meantime.
Though it'll never happen it'd be the ultimate (and awesome) justice if in the end all the scalpers were left with nothing to show for their efforts but a $600 debt and a system they never wanted. Ah well, I can dream.
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Posted Nov 13, 2006 6:11 pm PT
I don't blame them for recognizing the potential profit, it just irks me that there are so many people that are more than willing to rip others off (though, as you said, they only get away with it because buyers allow themselves to be ripped-off). Though I'm more bothered by the fact that real gamers who actually want a system have a harder time finding one because of scalpers.
Yes, the consoles are not a necessity, but neither are sports tickets. Though there is no Federal law against ticket scalping most states have outlawed or placed regulations on the practice.
And yes, if people would simply have a little patience and sense this scalping market wouldn't exist. Sadly in my life it's become more and more apparent that sense is a trait many sadly lack.
Yes, the consoles are not a necessity, but neither are sports tickets. Though there is no Federal law against ticket scalping most states have outlawed or placed regulations on the practice.
And yes, if people would simply have a little patience and sense this scalping market wouldn't exist. Sadly in my life it's become more and more apparent that sense is a trait many sadly lack.
Posted Nov 14, 2006 6:52 am PT
Ok, ok, let's put it this way---------what if the supply of PS3's was unlimited, meaning there was no worry of any shortages? That's the ONLY way to prevent scalping. It happens with rare cars, rare toys, even rare items in games like World Of Warcraft, etc. It's not just as simple as supply and demand--------what it ultimately comes down to is the old saying "the early bird gets the worm". The scalpers either got up and waited in line for pre-orders or they paid someone else to do it. The same opportunity existed for all of us, but of course we can't all do that, and that's what stinks. Then again (and I know a few), there are people who have money, and $700 is the same as $3000 to them, which is certainly easier than waiting in line for a pre-order.
It happened WAY before the 360 too! But being born in 1987 you might not remember the SNES launch, the 3DO, the PS1, etc, and they all had problems like this, but even the PS2 (which was retailing @ $550 by the way, not that far off from the "top" model PS3 at retail) was going for $3000 and more, and for the Japanese version too (keep in mind this is the FIRST time any consoles have been released worldwide so close together, they used to be released in Japan nearly a year before anywhere else). The difference with the PS2 and Dreamcast is that by then eBay was easily available and instantly gave "scalpers" an enormous market base, whereas there simply wasn't anything as effective as eBay for previous consoles.
Mind you, I HATE the scalping garbage, and if I could get a PS3 for the RETAIL price, I would buy one on launch day. Sony knew nearly a year ago for the first scheduled launch that they wouldn't have enough Blu-Ray lasers available for production, then they went as far as delaying the PS3 until Nov 17th, and of course now the shortages are very prevalent and they are exclusive to the shortage of Blu-Ray drive parts. If that says anything, I think it says Sony is REALLY banking on the Blu-Ray's success------I can't imagine they would suffer at launch (twice) like this for a technology the PS3 COULD do without, so I'm definitely looking forward to seeing how Blu-Ray pans out. As for scalpers, I'm sure they're not all drug dealers and crooked con-men----they're just trying to make a buck. Sure, they're exploiting a problem that Sony isn't in complete direct control over, but can you really blame them? eBay has made it so easy to profit from simply having resources that thousands of people make a living exclusively from back-selling products on eBay, and the console market is simply no exception, simple as that. I don't like it, we don't HAVE to like it, but we do have to accept it. I suppose the really disturbing fact is that the demand for these systems is so high, we can't say for sure that new console shortages at launch will never happen again with the PS4 or 360 2, etc. I'm sure Sony and Microsoft certainly didn't want to have such horrible shortages at launch, and they would have fixed the shortages if it were at all possible. With that said, how can we say this problem won't re-emerge with the next generation of consoles, and will the "scalping" not increase in scale even worse than we're ALREADY seeing with the recent new launches?
It happened WAY before the 360 too! But being born in 1987 you might not remember the SNES launch, the 3DO, the PS1, etc, and they all had problems like this, but even the PS2 (which was retailing @ $550 by the way, not that far off from the "top" model PS3 at retail) was going for $3000 and more, and for the Japanese version too (keep in mind this is the FIRST time any consoles have been released worldwide so close together, they used to be released in Japan nearly a year before anywhere else). The difference with the PS2 and Dreamcast is that by then eBay was easily available and instantly gave "scalpers" an enormous market base, whereas there simply wasn't anything as effective as eBay for previous consoles.
Mind you, I HATE the scalping garbage, and if I could get a PS3 for the RETAIL price, I would buy one on launch day. Sony knew nearly a year ago for the first scheduled launch that they wouldn't have enough Blu-Ray lasers available for production, then they went as far as delaying the PS3 until Nov 17th, and of course now the shortages are very prevalent and they are exclusive to the shortage of Blu-Ray drive parts. If that says anything, I think it says Sony is REALLY banking on the Blu-Ray's success------I can't imagine they would suffer at launch (twice) like this for a technology the PS3 COULD do without, so I'm definitely looking forward to seeing how Blu-Ray pans out. As for scalpers, I'm sure they're not all drug dealers and crooked con-men----they're just trying to make a buck. Sure, they're exploiting a problem that Sony isn't in complete direct control over, but can you really blame them? eBay has made it so easy to profit from simply having resources that thousands of people make a living exclusively from back-selling products on eBay, and the console market is simply no exception, simple as that. I don't like it, we don't HAVE to like it, but we do have to accept it. I suppose the really disturbing fact is that the demand for these systems is so high, we can't say for sure that new console shortages at launch will never happen again with the PS4 or 360 2, etc. I'm sure Sony and Microsoft certainly didn't want to have such horrible shortages at launch, and they would have fixed the shortages if it were at all possible. With that said, how can we say this problem won't re-emerge with the next generation of consoles, and will the "scalping" not increase in scale even worse than we're ALREADY seeing with the recent new launches?
Posted Nov 14, 2006 9:19 am PT
"So in essence, it's a giant scam that scalpers like to pass off as a legitimate supply and demand scenario."
While certainly immoral, console scalping is just another facet of the free market. What's illegitimate about that scenario? Anything else would involve compromising the U.S.'s l'aissez-faire economic policies. Free market - fair game. If it's legal, it's a legitimate circumstance.
Your argument is morally charged. But as long as there is no law against selling your legally gained personal property, there's nothing to cry about.
While certainly immoral, console scalping is just another facet of the free market. What's illegitimate about that scenario? Anything else would involve compromising the U.S.'s l'aissez-faire economic policies. Free market - fair game. If it's legal, it's a legitimate circumstance.
Your argument is morally charged. But as long as there is no law against selling your legally gained personal property, there's nothing to cry about.
Posted Nov 17, 2006 6:31 am PT
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No, it is not just part of the problem. It is the entire problem. If people used their brains and just thought about what they were doing, you could achieve your dream of people ending up with a console they never wanted.
The reason why this practice has not been outlawed is because these are non-essential products. These people are not gobbling up all the supply of bread, meat, vegetables, or water; we're talking about an indulgence.
You do raise a great point about the scalpers creating a more fervent demand by taking more systems out of the retail market, but it all comes back to my initial point. If people used their brains and realized that the supply will meet back up with demand in due time. I don't think you can blame someone for looking at the money they have to gain by doing this. It's a lot of money for relatively minor work.