You Hurt the PS5 Scalpers' Feelings

Illustration for article titled You Hurt the PS5 Scalpers' Feelings
Photo: Sam Rutherford/Gizmodo

Apparently some PlayStation 5 scalpers aren’t happy with their public image, Forbes reports. The press has treated them unfairly and misrepresented them, they claim. I’m not sure what rock these scalpers have been living under, but news flash: People hate scalpers for legitimate reasons. They screw people out of purchasing hardware at a fair price, and scalping in other industries (like event ticketing) is illegal, so it seems like the same should apply to hardware.

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Scalping a console isn’t illegal, though, and so scalpers rationalize their profits under the banner of entrepreneurship.

A British scalper by the name of Jordan told Forbes: “Essentially every business resells their products. Tesco, for example, buys milk from farmers for 26p or so per litre and sells it on for upwards of 70p per litre. No one ever seems to complain to the extent as they are currently doing towards ourselves.”

Basically, this guy considers what he does buying wholesale. Where do we begin with how absolutely bananas that idea is? Comparing a scalper running bots to snatch up graphics cards or consoles before anyone else can get their hands on them so they can turn a profit by wildly marking up these items on eBay to a legitimate business is not only disingenuous, it’s ludicrous.

Sure, some scalpers would argue that they operate as business entities because in some cases they employ full-time staff, but they don’t make products. They don’t design them. And buying items at retail and claiming you’re a wholesaler is...ridiculous. It also, in the case of Jordan, seems like some pretty legally questionable ways are used to do this.

Jordan claims he bought 25 PlayStation 5 units in January and resold them for roughly $967 (£700) a piece. A PS5 should be closer to $621 (£450), so that means Jordan sold each unit at about a 55% mark up and made $8,539 in profits. Forbes outlined how Jordan and his business partner Regan are likely bypassing security checks in the EU by using credit cards from outside the EU. “Generally, all cards provided by EU banks must have 3D Secure enabled,” web security and performance consultant Edward Spencer told Forbes. “I would guess that they are using cards associated with banks that are from outside of the EU, and are probably pre-paid.”

In February of last year, two British ticket scalpers were were convicted on fraud charges for raking in $9 million in profits selling scalped concert tickets on secondary ticketing sites like StubHub and Viagogo. The duo utilized multiple identities and bots to buy up Ed Sheeran, Coldplay, Liam Gallagher, Taylor Swift, and other event tickets before actual concert-goers could purchase them, and sold them for around a 175% markup.

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Last month, three New York ticket brokers agreed to pay $3.7 million to settle a lawsuit that alleged they violated the Better Online Ticket Sales (BOTS) Act by buying up concert tickets only to resell them at inflated prices to customers. This is the first case ever to go to court under the BOTS Act, and likely won’t be the last.

But the BOTS Act doesn’t do anything to address the scalping issues the consumer electronics world has experienced as of late. Those issues certainly didn’t start with scalpers snatching up graphics card and gaming console stock in the middle of a chip shortage exacerbated by a global pandemic, but sold-out RTX 3080s and PS5s brought the situation to a head. The BOTS Act only targets ticket scalping, not hardware scalping, which makes it difficult to regulate.

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For now, it seems like the only way scalpers can be stopped is if the company takes action or if a resale site like eBay bans certain items. More can, and should, be done.

Staff Reporter, Reviews at Gizmodo. Formerly PC Gamer, Maximum PC.

DISCUSSION

Scalpers don’t get to claim the same status as walmart. Their business is beating other people to the punch. They aren’t a part of the supply chain or anything like that. Walmart is part of the supply chain. They buy from a wholesaler and then sell retail. Without a Walmart, companies like Sony then have to staff up an entire delivery and sales division to deliver product world wide - they don’t want to do that, so they go the wholesaler route.

These guys, beat you online or to the store and buy it out. They’re able to make their profit by blocking people from buying at retail price so only their scalped marked up version exists.

If these tools could sell theirs for a huge markup while I could head down to my locale store and buy one a retail price, great for them. However, they make their money by depriving others of being able to get one direct from the store.

That’s NOT entrepreneurship, that’s being a grade a <bleep>!