Anyone who has managed to snag a PlayStation 5 or Xbox Series X should count themselves lucky. Demand for next-gen consoles drastically outpaced supply, allowing scalpers to exploit and exacerbate the problem. It has reached the point where some sources estimate that up to 15% of PS5s may have gone to scalpers.
But Id Software co-founder John Carmack thinks he has a solution. He believes that the most effective way to combat scalping is for Sony and Microsoft to cut out the middleman and auction their PlayStation and Xbox consoles directly to the public.
The co-creator of Doom and Quake explained his position in a series of tweets on Thursday. He criticized the retail model used for selling consoles and most other hardware. He specifically called out the shortages of Nvidia’s new GeForce 3090 graphics cards, in addition to the highly publicized scalping of PlayStation 5 and Xbox Series X consoles.
Carmack believes that auctioning consoles directly to consumers would create a much more effective and transparent system. He acknowledges that auctioning, rather than setting a fixed retail price, would result in a more expensive product out of the gate. However, Carmack believes that would only be a temporary issue. He argues that allowing people to decide what a product is worth to them would naturally lead to lower prices for most customers.
He also argues that the only thing preventing such a system is the industry’s dedication to more conventional sales channels such as retail, wholesale, and so on. Carmack notes that many products are already beginning to move past these models of distribution. He does not name any specific examples, however.
Canadian programmer Darrell Johnson offered a counterargument to Carmack’s suggestion. He argues that scarcity makes a product more desirable while a high price makes it less so. Johnson asserts that consumers are willing to wait for an out-of-stock product. On the other hand, they are more likely to choose the less expensive option regardless of availability. John Carmack acknowledges that Johnson’s statement is in-line with the prevailing wisdom. However, he remains unconvinced, believing that mindset is out of date. Says Carmack, “That is probably the current reasoning, with decades of evidence to back it up, but it is at least conceivable that things actually are a bit different now than when a lot of the marketing lore was laid down.”
It’s difficult to say how practical Carmack’s proposal would be if rolled out on a large scale. Many hardware and software manufacturers already sell products directly to customers. However, Carmack suggests a much more radical change to how companies and consumers interact. And even if this system benefits the consumer, it’s not clear what incentive corporations like Sony and Microsoft would have to take part. It is also unclear if it would prevent the loopholes scalpers use to get in ahead of everyone else.
Still, no one can deny scalping is a significant problem. As is mentioned above, data engineer Michael Driscoll estimates that scalpers resold 10-15% of all PS5s. Many of these resellers charge up to twice the item’s retail value. Despite the defenses offered by some scalpers, it is clear to many that something needs to change. Carmack, at least, has a suggestion.