The issue of scalping of in-demand new technology has become a more urgent one in recent months. People have been using bots to snag game consoles like the PS5 and Xbox Series X, and graphics cards like NVIDIA’s RTX 3000 line-up, in bulk and then immediately re-selling them (aka. flipping) on eBay and other e-tailers for a markup of hundreds or even thousands of dollars more than their retail price.
How bad has it gotten? In late December, Techspot reports that Walmart implemented preventative security measures onto their purchasing systems a few hours before selling off a bunch of PlayStation 5 consoles.
When they went on sale, those measures blocked more than twenty million bot attempts within the first half-hour alone. Those who made it through then faced audits with all orders confirmed to have been bought by bots subsequently cancelled by the company.
Now, in a recent interview with Forbes, a man who claims to have purchased 25 PS5 consoles in January and resold them for around $450 profit apiece says this kind of “reselling” is a valuable industry and both the bad press and angry reaction these scalpers have been getting is unjustified.
In the interview, he asks for sympathy: “There seems to be A LOT of bad press on this incredibly valuable industry and I do not feel that it is justified, all we are acting as is a middleman for limited-quantity items.”
He also says he has received several death threats from angry gamers and has reported them to the authorities, while he and his business partner also say they feel that they are helping people earn some extra cash.
The article goes into detail about the kind of bots being used in these sorts of transactions, bots that can cost thousands of dollars each, interact directly with server APIs, and in the case of one UK retailer they were able to exploit a security loophole and order stock from them before the consoles even went up on the storefront.
The scalpers are also highly organised, in some cases with full-time staff to monitor hundreds of websites at a time. One source spoken to said that retailers can “mitigate this with tried and tested anti-request forgery techniques but unfortunately many sites just don’t bother.”
How much scalpers are to blame for stock shortages also isn’t clear. An even bigger problem according to Business Insider is the global computer chip shortage caused by the pandemic. That shortage has begun to impact a range of industries with not just consumer electronics but phones, car manufacturers and many other fields now feeling the impact.
Increased demand for chips, combined with disruptions in the supply chain such as factory closures, has led to chip scarcity. As a result companies like Sony and NVIDIA simply can’t increase production due to the shortage of semiconductors and other components.
Whatever the case, this has resulted in a worrying new trend – price gouging by retailers. Kotaku has snagged photographic proof of some Australian second-hand consumer electronics retailers selling PS5 stock at wild mark-ups – in once case just shy of $1500 U.S. dollars, and in several cases nearly $400 U.S. dollars over the retail price.
As previously reported, legislation in the UK is being proposed to ensure that consumers can purchase gaming consoles and computer components at no more than the manufacturers’ recommended price – along with making the resale of goods purchased by automated bots to be made illegal. However, the bill is unlikely to pass.
PC Mag recently revealed that approximately 50,000 Nvidia RTX 3000 graphics cards have been sold on eBay and StockX as of late January – often at double the normal pricing.
The issue is expected to continue for some time as shortages of graphics cards and game consoles are reportedly set to keep going well into 2021 and won’t start easing until somewhere in the back half of the year.
