I see people every day posting about their graphics card that is like a lottery ticket to acquire one. Same with day one releases of next gen gaming consoles
Could they produce enough of the product to meet demand prior to releasing it? That’s seems like poor business practice to me
In: Technology
Another factor here – covid has not only messed with supply chains, but increased demand. People who would normally not care as much are relegated to playing videogames.
>Could they produce enough of the product to meet demand prior to releasing it?
Technically, yes. Would you be happy if you wanted a PS5, knew that they were finished and rolling out of factories, but couldn’t buy one until March? That would be a good way to piss off their entire customer base.
Or, they could spend hundreds of millions of dollars outfitting extra factories for the initial release, and then shut half of them down after a few months when the initial demand was met. And that would be a terrible financial decision.
The companies know how to make the most profit.
Storing unsold product in a warehouse until you have enough supply for every single customer would both cost money and potentially lose sales to a competitor releasing their product before you.
I guarantee that they have more than enough product to meet the demand. In an economy that relies on supply and demand to set prices, it makes sense to withhold product to maximize profits.
Supply and demand. And to endure a longer time the product is sold at the highest price possible. They limit the supply.
They’re sold out because Covid has slaughtered supply and majorly increased demand. The video cards are a massive upgrade and on the peak of a number of massive releases because everybody is stuck home. Same with the consoles. There just aren’t enough factories operational to make Zen 3, 11th Gen Intel, 30 series, big navi, and consoles SOC to keep up with demand.
Guys, they’re not holding products back or creating demand or helping scalpers. They physically can’t push out silicon fast enough to keep up with demand. Please stop spreading disinformation and bizarre conspiracy theories. What sort of world do you live in where companies go “Yes I know whats a good idea, our products are flying off the shelves, let’s… Not make more. That’ll… Show them?”
Well same reason iphones sell out, or movies would sell out. Everyone wants to see the latest greatest thing RIGHT NOW. Demand outstrips supply. There’s a limited capacity to how much they can produce at once. Forced scarcity makes people want the product more.
A big reason I’d say is scalpers. They buy as much of the product as the can and resell it for much much more. By them doing this it means the product sells out much faster because these people are buying absurd amounts if it. But by them doing this it creates scarcity so now people who are looking for the product only have 2 choices a: buy it from a scalper for a higher price b: wait till the next restock which also has a chance of getting hit by more scalpers. I’d say this most recently happened with the Nintendo Switch but is already ramping up with the PS5 and Xbox Series X with how fast they are selling out and how hard they are to produce at the moment due to the pandemic keeping most factories closed.
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