A leaked quote from a senior executive at Sony that it expects the PlayStation 5 shortage to last until 2022 has been met with jubilation by resellers, who are earning tens of thousands from desperate console buyers.
“Excellent news. [There’s] still easy money to be made and that news from Sony will cause people to become more desperate,” said Adam, who is a prolific PlayStation 5 reseller. He has bought and sold 10 PlayStation 5s at an inflated price so far.
Bloomberg recently reported that Sony’s Chief Financial Officer, Hiroki Totoki, told analysts after a financial results briefing that “I don’t think demand is calming down this year and even if we secure a lot more devices and produce many more units of the PlayStation 5 next year, our supply wouldn’t be able to catch up with demand.”
The Japanese company has sold 7.8 million PS5s (up until March 31st) and it plans to sell at least 14.8 million units in the current fiscal year. According to Bloomberg that puts the console on course to match the PS4s giant sales figures, which total 115.9 million to date. But severe chip shortages are stopping Sony from meeting demand. It’s not just consoles; cars, TVs, toothbrushes, washing machines and virtually any modern tech has also been impacted.
The complexity of creating semiconductors means last year’s Covid-19 shutdowns will take some time to rectify and meet demand. IBM’s president, Jim Whitehurst, said the current situation could go for another two years.
This, of course, is good news for people raking in thousands from scalping. Another reseller I spoke with, Mike (not his real name), said he’d also sold 10 PS5 so far, from which he has made £2000 in profit. The only thing stopping him from selling more has been his university dissertation. Mike claims a university friend, who also resells, scooped up 30 consoles from UK retailer Argos, which dropped new stock late at night two weeks ago. A Telegram dedicated to stock updates that I follow confirmed that Argos released stock on May 11th between 1am and 3am, from which some users managed to buy the Sony console.
Almost all the resellers I’ve spoken with are either in their early 20s and/or students making money on the side. But Mike’s reselling efforts far exceed others I’ve spoken with. Screenshots he shared with me of his PayPal account show sales of over £60,000 in 2020. That’s not just consoles, rather in-demand sneakers, clothes and GPUs – specifically the hard to find Nvidia GeForce RTX 3090. Mike plans to put this money towards buying a house in London.
Adam is also enjoying the current scarcity of in-demand items. The leaked quote from Sony will keep resellers in business, as he explains: “It would’ve had little difference in price had Sony kept quiet but telling people this will just cause more demand and resellers now know that there isn’t going to be large restock frequency so their money is safe in PS5s.” He continued: “[the price] won’t go down, the news from Sony will only scare prospective buyers who now think if they don’t buy one now then they won’t have a chance later in the year.”
Sami Mehmed, who runs a popular PS5 restock account, PS5 UK Stock Alerts, says more people are joining for alert news. “We have been gaining followers, however drops have been more scarce than ever, especially last month…because of the lack of drops there are more people coming in to get alerts.”
Battling PS5 resellers was already difficult before the leaked Totoki quote. There are dedicated groups that monitor stock updates using a system called Street Merchant, and employ bots to scoop up as many consoles as possible. The bots can bypass 3D secure – an additional layer of security which verifies that the buyer is the legitimate card owner – on a retailer’s website and checkout the console in under 3 seconds. Few humans can compete with that. Read more about the tactics resellers use to buy stock here.
But, until recently, resell market StockX previously told me that PS5 resell prices were levelling off, dropping by 20% since November when the console was released. It’s too early to tell if Totoki’s comments will change that, or if more flagship games like Returnal increase demand, but scalpers currently holding stock are betting it will.
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