Calls are growing for the government to step in as some families face a second Christmas without being able to purchase a gaming console unless they pay a “hugely inflated” price.
The underlying problem with supply is a global shortage of computer chips, but scarcity at a retail level is being aggravated by scalpers bulk ordering items as soon as they’re available to sell on for a profit.
This cottage industry is supported by businesses like Aftermarket Arbitrage, which uses software to track retail stock, and – for a £30 monthly subscription – alerts members when units are available.
Yes, some families are gonna have to pay another £100, but what you don’t think about is our members, they’ve got 30 consoles, they’re making £100 on each one. And then they’re making a good month’s salary in a couple of days.
Calls to ‘Ban the Bots’
Douglas Chapman MP has called for the practice to be banned in a similar fashion to ticket touting and has received support from colleagues across the House of Commons.
Last week, Mr Chapman wrote to Nadine Dorries, the digital secretary, asking the government to reconsider prohibiting the use of automated bots to bulk buy goods for resale.
A government spokesperson said they were speaking with trade associations to ensure consumers were protected from bulk purchasing in a similar fashion to the ban on automated purchases for ticketed events.
But speaking to Sky News, Jack Bayliss, the 24-year-old owner of Aftermarket Arbitrage, estimated that 95% of his company’s 1,500 subscribers didn’t use bots and instead manually purchased the consoles and sneakers thanks to his restocking monitoring alerts.
“If there was legislation around this it would benefit me just purely for the fact that those few people still running bots and securing bulk consoles, they wouldn’t be able to do so any more. But I don’t ever see it happening. I don’t think it’s feasible,” he said.
Aftermarket Arbitrage is a registered company that alerts scalpers when consoles are for sale. Pic: Jack Bayliss
Wealth creation or extraction?
Aftermarket Arbitrage’s posts on Instagram show boxes of the latest PS5 and Xbox consoles, as well as Adidas Yeezy sneakers and other consumer goods, stacked from the floor to the ceiling.
The sneakers were where the business started, Mr Bayliss explained: “We basically just adapt when we see a shortage in like a supply chain, a supply and demand issue. We can then capitalise on that.
“If you look at the stock market, and the moment you see an arbitrage opportunity, where someone thinks an asset is undervalued, traders are gonna jump on it and arbitrage that profit away. That’s exactly what we’re doing.
“Look at every single step in the supply chain. Someone is adding value somewhere.
“It’s not being sold at cost price. It’s capitalism.”
The PlayStation 5 console is listed as ‘Out of Stock’ on Sony’s official site
Moral compass
Mr Bayliss said he was “very in tune with my moral compass, as a person” and the thought that families weren’t able to purchase a games console as a result of his business had bothered him.
“But I get to see the flip side of the coin, the area that the media and the general public who hate us quote ‘scalpers’ [don’t see],” he said.
“To me, owning the PS5 or an Xbox isn’t a necessity, it’s a luxury, okay? If you can afford to spend £450, spending the extra £100 should be pretty marginal, if you’ve got cash ready to splash on that.
“Yes, some families are gonna have to pay another £100, but what you don’t think about is our members, they’ve got 30 consoles, they’re making £100 on each one. And then they’re making a good month’s salary in a couple of days.”
A global chip shortage is suppressing supply of gaming consoles
Benefits of membership
The majority of the people who subscribe to Aftermarket Arbitrage’s alerts are “very young”, Mr Bayliss told Sky News, adding that he thought they were showing a lot of initiative.
“What they’re doing is they’re being entrepreneurs, they’re going out, creating a side income, and they’re doing something that 90% of the population can’t be bothered to do,” said Mr Bayliss.
He said some of the company’s older members have been able to quit their jobs and escape their debts due to reselling consoles and other goods on a full-time basis.
“They spend more time with the family, with their kids. We’ve had people who’ve been able to renovate their house, they bought the kids a climbing frame, they bought the wives new cars, they bought themselves new cars,” he said.
“We’ve then had one of our members, he was £20,000 in gambling debt. And we’ve took him on. He’s been with us for a year, he’s now in the clear, and he’s made, I think, he’s made a significant amount of money.”
MP Mr Chapman said: “The bottom line is that this is a consumer fairness issue, which also impacts on business.
“This is a situation where shoppers are being treated badly and having to pay way over the odds for goods, goods which are then not covered with warranties or the right to return, or recompense for faults.”