TORONTO — A shortage of video game consoles during the COVID-19 pandemic has been highly lucrative for resellers like Rick Charles.
The 25-year-old project manager has made as much as $500 profit on the sale of each coveted new PlayStation 5.
"Everyone kind of knew that Sony wasn't going to be able to produce to demand and when you have guys that are buying 50, 20 at a time, the average retail buyer is not going to have a chance," he said in an interview.
And so buyers, especially parents before the Christmas holidays, were willing to fork out big bucks for the newest PS5, which retails for $499 or $630, depending on the version, but was going for up to $1,500 a piece on sites such as Facebook's Marketplace and Kijiji during the height of the lockdowns.
While those prices have since come down to between $750 and $950, it's still a lot of money for households with limited budgets. However, experts say there are alternative and more affordable ways to quench the thirst for gaming.
Gaming has exploded in popularity during the pandemic as people have more time on their hands and can use the devices to communicate with friends.
In Canada, spending on gaming across PC, console and mobile increased to almost US$2.9 billion in 2020, with gaming forecasted to generate more than $3 billion in 2021, says Morris Garrard, research analyst of mobile tech and gaming at Futuresource Consulting in the U.K.
Ancillary markets such as gaming headsets also saw a boom in demand (for both gaming and working and schooling from home) with shipments in Canada growing by 29 per cent year-over-year in 2020.
The excess demand for new consoles is expected to abate mid-year following new waves of restocks, Garrard said.
Walmart says it is restocking the PS5 online to provide a "fair and equal opportunity" to buy the sought-after item.
"This gives all customers the same access to the larger pool of product and allows us to communicate to all customers at the same time," spokeswoman Felicia Fefer wrote in an email.
"When we do restock, we prefer to surprise and delight our customers versus provide advanced notice," she said, adding that there is a limit of one unit per customer.
Nathan Santos, 23, searched online daily for months before he nabbed a unit late one evening from Walmart after several close calls.
"I probably opened the page 15 seconds after that notification went out and already the digital editions were out and so I said I'm not waiting anymore and I bought the disc version," said the Mississauga, Ont., substitute elementary school teacher.
"I couldn't believe it. I actually sent a video to a few of my friends on Snapchat basically in shock."
Santos isn't a big fan of resellers, whom he accuses of preventing gamers from getting their hands on systems at retail prices.
"I'm not willing to pay several hundred dollars more for this console when I know eventually I'll be able to get one for retail price."
The root of the shortages are production challenges that have limited the output of semiconductors chipsets, an issue that is also plaguing the auto industry.
Kris Alexander, assistant professor at Ryerson University's RTA School of Media, says despite accusations from some quarters of intentional supply restrictions, similar shortages have affected previous versions of PlayStation and other systems such as Xbox Series X and S.
"There's no confirmation of whether or not this has been done purposefully but there is a timeline of it happening with the PS2, the PS3, the PS4 and now the PS5," he said.
The self-described professor of video games said you don't necessarily have to be rich to enjoy the hobby, as some free games are available online and older consoles can be purchased used.
"I have never had the money to buy a console in its first release year, except the 1999 Sega Dreamcast," Alexander said, adding that he still plays the old Wii U with his children.
"If we can just tilt away from hype for a second, we can see there's a plethora of games for free, many by AAA companies that you can play for free right now."
The library is also a good place to find some games for free, said Kent Sikstrom, community relations manager for Kijiji Canada, which saw a 372 per cent increase in searches for the term PlayStation during the first few weeks of its availability last fall.
That initial surge of excitement was also seen with other gaming systems from Xbox and the Nintendo Switch.
In addition to searching for new PS5s, there's also been an increase in demand for refurbished and used systems as people who have struggled during the pandemic search for deals.
Some companies offer video game rental subscription services and older games can be traded in for a new title.
"So you can still play the latest games, one game at a time, for a monthly subscription fee, which is far cheaper than let's say $100 a pop for the newest game."
This report by The Canadian Press was first published March 11, 2021.
Ross Marowits, The Canadian Press