Were you lucky enough to secure a pre-order of the Xbox Series X or PlayStation 5? If so, congratulations! You’re one of the few who managed that feat. Both consoles sold out as soon as pre-orders were available, meaning a lot of people hoping to pick up one of the new machines this year were left disappointed.
A lot of factors came together to make this happen, and we’ll look at them in turn. First is the confusing way in which both Sony and Microsoft made their consoles available. Pre-orders for the PlayStation 5 “accidentally” went live hours ahead of schedule, meaning a lot of people who had planned to pre-order at the promised time missed out. There is no one place where consoles may be pre-ordered either, with retailers from big outlets like Amazon and supermarkets down to smaller specialist games or electronics shops all offering to take customers’ money. As many found out later, problems with stock availability and allocation meant that a lot of pre-orders were either cancelled, rejected, or could not be fulfilled on launch day.
Then there are the “bots.” Automated computer programmes bought up a significant percentage of the available supply of new consoles, leaving many machines in the hands of touts and scalpers. These consoles are currently being re-sold for well over the asking price to disappointed gamers who missed out.
Finally there’s the question of how many machines were manufactured. When coronavirus hit China hard earlier this year, production of next-gen consoles was majorly disrupted. Some factories were closed for weeks, others cut back their output, and the consequence for both Sony and Microsoft was that far fewer next-gen consoles were available in time for launch than they expected. I noted this a few months ago when I asked the question: is now really the right time to launch these machines?
There was always going to be high demand for these machines, and both Sony and Microsoft knew that they’d sell out on launch day. In fact that’s usually part of the plan; selling out makes a machine look exciting and cool, and fear of missing out drives sales. No company wants to see images of huge numbers of unsold machines sitting on shelves in the period after launch.
But even in that environment, the reduced manufacturing capability has had a huge impact, make no mistake. The plan had been for millions more consoles to be available; Sony told us this directly when they announced a few months ago that they would have several million fewer consoles ready to go on launch day than they initially planned. When their business model was already based around artificial scarcity, the loss of several million units has made an already difficult pre-order process practically impossible when combined with the other factors listed above.
So on to the title of this article: how much does an Xbox Series X or PlayStation 5 really cost if you want to get one before the end of the year? I went to a popular auction website and compiled a short selection of listings. Take a look:
As you can see, prices are approaching double the recommended retail price here in the UK, with scalpers and touts even selling pre-ordered consoles that they don’t actually have in their possession yet. Anecdotally I’ve heard from friends in the United States of PlayStation 5 consoles being sold for upwards of $1200 – well over double the asking price.
In a way, this is “pure capitalism.” This is what happens when companies don’t have enough stock for consumers; the law of supply and demand kicks in. If someone is willing to pay £900 for a PlayStation 5, then there will be a market for that. The true price of these machines right now, in November 2020, is not the recommended retail price of £450. It’s £700, £800, or £900. And with no indication of the availability of either console improving before Christmas, those prices may yet rise further.
Companies are totally fine with this. It doesn’t matter in the slightest to Microsoft or Sony whether a genuine player buys a console or a bot picks up that console for a scalper or tout to re-sell later. They still make just as much money no matter who the buyer is, so they have absolutely no incentive to find ways to stamp out this behaviour. Likewise, retailers from game stores to supermarkets to giants like Amazon don’t care – and it’s through online retailers that the vast majority of pre-orders have been taken.
The market – that amorphous entity that economists love to talk about – determines the price and value of products. If people are willing to pay £900 for a PlayStation 5 then that’s its true value. But is it worth it? Could any video game console possibly be worth £900?
It will come as no surprise to you to learn that my answer is a resounding “no.” Not only are these machines not worth such a ridiculous amount of money, they’re probably not even worth their official price right now.
This new console generation is, at best, a minor improvement over the current one in most of the ways that matter. Add to that the fact that practically every game currently available for the PlayStation 5, and every single game currently available for the Xbox Series X, are also available on PC, PlayStation 4, and Xbox One, most players would find it hard to tell the difference between playing on a current-gen or next-gen machine. There are iterative changes, such as faster loading times, better controller battery life, and so on. But there’s nothing significant in terms of graphics or gameplay that make either console a “must-buy” in 2020. Any such improvements won’t be seen for a year or more; perhaps by 2022 you could make the case that games are getting better thanks to these machines. But not yet.
There was a lot of hype and buildup to the launch of these new consoles, as is to be expected. And a lot of players were sucked in by the hype and decided that they needed a new Xbox or PlayStation on launch day no matter what. If they paid over the odds for their machine from a scalper or tout, I bet a lot of them regret that investment today.
With the new consoles offering small improvements at best, there’s no need to get one right now. Don’t reward the scalpers and touts with their scripts and bots who bought up as many consoles as they could. Jump off the hype train and be patient, and enjoy the exact same games on current-gen hardware. Chances are you wouldn’t be able to tell the difference anyway.
The Xbox brand – including the Xbox Series X and Series S – is the copyright of Microsoft. The PlayStation brand – including the PlayStation 5 – is the copyright of Sony. This article contains the thoughts and opinions of one person only and is not intended to cause any offence.