EDMONTON -- Scammers are taking advantage of the high demand for the latest gaming consoles this holiday season, targeting consumers with fake deals, misleading ads, and charging up to three times the retail price for devices.
The recent launch of Sony’s PlayStation 5 has been marred by online scalpers using artificial intelligence bots to buy the already scarce consoles in bulk, reselling them for up to three times the suggested retail price.
Holiday shoppers trying to get their hands on the Nintendo Switch, PlayStation 4 PRO, and the latest Xbox are also being bought out by scalpers or duped by scammers who trick them into spending hundreds of dollars only to receive empty product boxes.
“These bots are unbeatable by the average person,” gaming expert Ajay Fry told CTV’s Your Morning on Thursday.
“They can do 50,000 attempts at buying things in an instant. The average consumer pressing refresh on their computer as much as they can, trying to get those next gen consoles, just can’t compete with these bots.”
Although the issue of scalping isn’t new to the gaming industry, experts say the problem is particularly bad this year thanks to production constraints and shipping delays due to the COVID-19 pandemic.
“Retailers are trying their best to counteract this in many ways, even doing things like upping the price of the product and then offering consumers a discount code to greatly reduce it,” explained Fry.
Retailers like Walmart are also investing in bot detection software that prevents the bots from quickly completing transactions.
“One bot preventative action we implemented just hours before the PlayStation 5 event on Nov. 25 blocked more than 20 million bot attempts within the first 30 minutes alone (which is a fraction of what our systems deal with continually),” Jerry Geisler, Walmart’s chief information security officer, wrote in a recent blog post.
Unprecedented demand for the PlayStation 5, which remains sold out at most retailers in Canada, has encouraged resellers and scalpers to sell the consoles for up to US$32,000 on eBay.
The demand has led to violence and robberies, with police in British Columbia and Ontario investigating multiple cases of sellers being assaulted and robbed for the gaming system.
The Better Business Bureau is also warning of scams that involve consumers paying reasonable prices for gaming consoles on obscure third-party websites, only to receive empty boxes or miscellaneous objects.
“People are so eager to get this for their loved ones this holiday season that they’re not recognizing that they’re not buying a PlayStation 5,” said Fry.
“If you’re buying online, read that advertisement very carefully. Make sure that is says specifically this is a new console, you’re getting the console, you’re not just buying the box or a picture.”
Fry adds that if you are engaged in a bidding war with a seller online, set a price point for yourself that you won’t budge on, so you won’t be pressured into spending more.
“It’s the result of the system that we’re in, ultimately. These are luxury items. I can understand why some people would see this opportunity to try to make a buck,” he said.
“We may see a bit of a market adjustment in the future where some of these scalpers that have themselves hundreds and hundreds of consoles and aren’t able to get rid of them, may actually start selling them at a reduced rate. But that likely won’t be for months.”
