Category: Uncategorized

What to do about scalpers and price gougers

As I brought up in A Tale of Two Price Points, a few days ago, it’s become a common practice for scalpers to buy up all available inventory at retail in order to price gouge real customers.

I’ve been thinking about this from a variety of angles.

“Scalping” is a predatory practice whereby an intermediary intercepts inventory, preventing an interested buyer from making a purchase at the normal price. Scalping is parasitic on the industry it preys on. Scalpers add no value to the transaction, only extract. They are able to do so when the buyer is desperate and has the available money to cover the increased cost incurred by the practice.

Scalping introduces numerous inefficiencies into the market. Their purchase is taxed for sales tax, and when they re-sell the game, this sale is also taxed, resulting in a double tax on the purchase. As well, the product ends up being shipped twice, once to the scalper, and then a second time to the eventual buyer. This wastes packing materials and fuel and time, all of which have value and add impact to the environmental footprint of the product. Finally, scalpers typically sell through online marketplaces such as ebay or mercari, that charge a fee, so this fee is also detracted from the markup, there’s additional transaction fees oftentimes, as well. All of which adds up, and whittles away at the actual profit realized by scalping.

We can take sales data from ebay closed listings and get an idea of what scalpers are getting for the game. In the first few days after Metroid Prime Remastered became available for purchase, it sold on eBay for an average of $69. This average has fallen off since then to $62. Scalping is a strike-while-the-iron-is-hot scheme, so it makes sense that the price has already started to come down — the most fanatical customers have gotten their copies ordered by now, the opportunity to be the first kid on your block to have a copy has now passed, and retailers are starting to replenish their depleted stocks. But for those first few days, the scalpers were able to take a lot of profit.

Let’s look at what happens when you buy a game for $39.99 retail, and then scalp it for $70:

The scalper pays $39.99 + tax + shipping. (Maybe they avoid shipping cost by buying from a retailer that does free shipping, or picking up in store.) Sales tax varies depending on locality, but we can pick a reasonable average value, let’s say 8%. Let’s say the end price is $39.99 + $0 for shipping because we pick up at the store + 8% tax, that’s $49.6584, which we can round up to $49.66. But our time and gas to pick up the game is worth something, so let’s factor some cost for this, say $10 for the entire order. We’re buying as many copies of the game as we can, because we want to maximize our profit from this, and to do that we need to ensure that the game is sold out. So ideally, we’re going to buy every copy in stock. Say the store has 20 copies, and we buy all 20. That $10 cost to pick up the order at the store can be divided by the 20 copies, so just $0.50 per copy is our cost.

So you sell the game on ebay for $70. Ebay charges 13.25% + $0.30 as a final value fee. But the final value fee is inclusive of all the buyer’s costs, including tax and shipping.

Say you sell the game for $70, plus $5.99 shipping. That 75.99 is assessed for sales tax by ebay, which again varies, but to keep everything even let’s assume the tax rate is again 8%. So the buyer pays $82.0692, rounded to $82.07. Now ebay comes in with their final value fee of 13.25% of that + 0.30. The final value fee of $11.17, which is deducted from your revenue, leaving you with $70.90. We deduct the $0.50 cost for our pickup expenses from that, so $70.40. Now you have to ship the game to your buyer, so you pay the $5.99 shipping out of that, you have $65.40, leaving you up +$22.21 for each copy that you sell. But if you have to spend money on shipping supplies as well, that eats into the cost, maybe another $1 or so for a padded envelope, now you’re down to $21.21.

And if you factor the time you took to do all of this: buy it, list it, pack it, ship it, what’s your time worth? Say that all told takes you an hour. So per copy you sell, you’re making $21.21 times 20 copies = $424.20 for an hour’s work.

And that’s why scalpers exist.

So, we need to figure out how to make it not worthwhile for them.

Should vendors care?

At first glance, it seems like the retailer shouldn’t care, a sale is a sale, and when they sell out their inventory, they get their money, so they should be happy. So too with the manufacturer. But Nintendo and retailers both should consider that scalping is hurting their real customers, as well as hurting their own business, and take action.

If the game will sell at above retail prices, then the retailer is losing the opportunity to make the money by selling the game at the price the scalper is getting. The retailer isn’t being hurt, exactly, but should see clearly that they have missed an opportunity to make even more money with a hot property. So the retailer should raise prices.

Retailers should also consider limiting quantities, a particularly during the initial week or month of release, in order to prevent scalpers from taking advantage. Quite likely this would solve the scalping problem by itself. A “1 per customer” rule would stop scalpers from being able to efficiently acquire enough stock to create the shortage, and would not get as many copies to sell, limiting how much they can profit from their scalping opportunity.

There are ways to circumvent rationing — multiple customer accounts, buying from multiple stores, etc. But the more inconvenient it is for scalpers to buy quantities of the game, the harder it will be for them to cause the game to sell out, and the less they will be able to profit from what copies they do manage to obtain.

When it comes to setting prices, the retailer’s hands may be tied by agreements with Nintendo to sell at Nintendo’s recommended price. But this same logic applies to Nintendo as well.

Nintendo has also seen it demonstrated that the market is willing to bear a higher price; by not charging that price, Nintendo is also leaving money on the table. The proceeds scalpers are taking from the resale of these new unopened copies of the game is money that could have went to Nintendo. Nintendo earned that money by developing the game. A scalper does nothing but inconvenience everyone.

It seems plain, then, that if the money is there to be made, Nintendo ought to be the one making it, and so should increase prices and take the additional profit for themselves.

Had Nintendo done so, they could have more than doubled their profits by charging the same price that the scalpers were getting for Metroid Prime Remastered. That money could have enabled Nintendo to pour more money into R&D and create even more games, which benefits the gamers who buy those games. By paying the scalpers this price instead, gamers will not get to see that benefit, because scalpers aren’t going to put any additional money into R&D for the next Nintendo hit.

Raising prices would not be a popular move with Nintendo’s customers, of course, but it’s Nintendo’s own customers who have demonstrated their willingness to pay this price. Nintendo could charge a premium for the game during release week, and then lower the price over time. Likely, knowing that the game will be considerably cheaper a short time after launch date, buyers will opt to patiently wait a week or two, and then buy.

And that might not be the best outcome for Nintendo. Typically, the sales curve for a game peaks on release day, and tails off gradually over time. By charging an early bird premium in the first week, sales would be lower, and after the price goes down, might not pick up as much. So pricing the game this way could introduce risk, and not be in Nintendo’s best interests after all.

So who can stop scalpers?

Vigilantism against scalpers

Gamers should boycott scalpers. The problem is that many gamers do not participate in such boycotts, and are willing to pay the higher price, and thus provide the incentive to the scalpers to do what they do.

Given that gamers have shown themselves to be unable to organize themselves to effectively boycott, what else might we do?

Activist gamers who want to combat scalpers can do a few things. First, you could buy the game from the scalper, then return it. This ties up the seller’s resources. The best way to do a buy-and-return is to use up all the time that you can, so that the game gets returned to the seller after the longest allowed delay. This way, when the seller does get the game back, the period of high demand will have abated, and the game will no longer command the inflated price the scalpers could demand on launch day. The scalper will then be stuck with a copy of the game that they most can only sell at a loss, and when this happens to them regularly, they will realize that it is no longer viable for them to continue scalping products, and stop doing it.

Probably, though, most sellers will not allow returns, and so in that case the buyer will need to do something more than that. Ebay and PayPal both have Buyer Protection policies which can be used to make a scalper’s life very difficult. Even if there is no return policy, a Buyer Protection claim can still be filed, creating problems for the seller.

I don’t think that Buyer Protection currently protects against price gouging, but we can suggest to Ebay and PayPal that they update their policies to include gouging and scalping. This would also kill the practice of scalping very reliably.

But even if it is not official policy to protect the Buyer against price gouging and scalping, the Buyer Protection policy may still be invoked for other reasons. Items not received, items that were damaged, items that were not as described. The buyer may invoke one of these reasons and create a claim that may force the seller to take a return, or take a loss. Again, if this happens frequently enough to the seller, the seller will realize that they cannot profit from scalping any more, and will cease the practice.

Even if a buyer may not always prevail in a Buyer Protection, the nuisance of it will cause problems for the seller that will dissuade them from continuing to sell if they receive enough of them.

Gamers who are upset with the practice should organize and act, because it will only work if it happens in large enough numbers to make the little bit of profit that scalpers are realizing no longer worth their trouble.

Mind-blowing Boulder Dash Atari 2600 prototype by Andrew Davie

Sadly, I only remember hearing about the video game Boulder Dash in the days of its original release, way back when, but I never actually played the game. Never had the opportunity to, never saw it at a friend’s house, never saw it at a store. I only recall seeing it in catalogs and advertisements, mostly I think for Apple ][ computers or Commodore 64.

The game revolves around a cellular automata that simulates a cave-in, triggered by the player as they extract treasure from the earth inside a cavern.

Atari Age has a version of it available on the store currently. And you might want to pick it up, if only to get access to this amazing version currently in prototype that I just watched a longplay video for. Check this game out:

Holy @#%$! this is amazing!

The developer, Andrew Davie, wishes to be respectful to the IP rights of the original developers, and has stated that they will likely require proof of purchase of the original Boulder Dash in order to purchase his version when it becomes available.

This version looks absolutely incredible. The game is powered by an ARM processor, a super-chip in the cartridge that is far more powerful than the actual Atari 2600 console hardware. We’ve seen other Atari 2600 homebrew games powered by ARM-augmented cartridge expansions, such Champ Games’s releases from recent years, such as Galagon, Zookeeper, and the upcoming Elevator Agent. The color palette, sprite scaling, smooth sinewave motion, and audio are almost unbelievable. To me, this is what I want to see when game developers produce “throwback” games. The aesthetic is early 80s, but the other hardware constraints are lifted, allowing for things that wouldn’t have been possible back in the day, but look like they could have, if only.

Even though I have no memories of the original to give me nostalgia for this version, I’m instantly hyped to give this one a try. There’s no telling how long it will take to go from prototype to release, but I hope the wait isn’t terribly long. Hopefully there won’t be any Intellectual Property snags to prevent it from getting a general release.

Atari Age 2022 homebrew picks

The Atari Age Store has finally dropped the new titles that were announced for 2022 release. Some of these titles were available in limited quantities at Portland Retro Gaming Expo in October of last year.

I could have spent a lot more money if I had bought everything I wanted, but with the prices of these games running upwards of $50-60 a piece, they’re no longer the easy buys that they were at $25-30, 5-10 years ago. Although the prices are up, the quality is too. Both in terms of the games themselves and their presentation and packaging.

The games I bought this year are some of the best looking homebrews I’ve seen yet: RubyQ (2600), Qyx (2600), and Popeye (7800). All three are arcade clone/ports: RubyQ = Q*Bert, Qyx = Qix, and Popeye = Popeye. All three look amazing, particularly considering the systems they were developed to run on.

I was tempted to add Galaxian (7800), Pac Man Collection 40th Anniversary Edition (7800), Oozy the Goo: Slime Quest (2600), and Blocks (2600). But I just can’t fit them into my budget this year. Gorf Arcade (2600), Rob’n’Banks (5200) (Lock’n’Chase), 2048 (7800), and Keystone Koppers (7800 (Keystone Kapers) also look well done, but not games that I liked well enough in their original incarnations to buy again on physical cartridge, although they’re certainly worth a play if you can download the ROMs and run them on emulator.

The Atari 2600 homebrew scene is better than ever, it seems, and still going strong 45+ years on from the original launch of the Atari 2600 in 1977, with works being produced today that exceed the best quality games that were available on the platform in its commercial heyday.

Atari publishes new IP: Kombinera

Atari has published a new game, called Kombinera. It looks decent — an action-puzzle game where you need to combine five different colored balls into one. Atari did not develop the game; that work was done by outside developers Graphite Lab and Joystick. My initial impression is that it looks like an indie game, and in fact visually it reminds me a lot of 140. Another reviewer said that the game had a platformer vibe reminiscent of VVVVVV — which certainly sounds like a good thing.

Kombinera is available on Steam. Which, is on the one hand good, because it means you don’t need to go out and buy a VCS console in order to play it, but also puzzling, because why did Atari bother with all the trouble of launching a console when they’re clearly not intending to support it by selling platform-exclusive titles?

As critical of Atari as I’ve been over the past several years, it’s good to see them putting out new IP, even if they’re not developing it internally. So, cautiously, this seems like a step in the right direction for the company.

GameMaker Studio finally coming to Linux?

About 10 years ago, YoYoGames was talking about a Linux IDE for GameMaker Studio on their long-term roadmap. A few years passed, and the roadmap disappeared and all talk about a Linux IDE went silent. It seemed that PlayTech may have been responsible for killing the project when they bought YoYoGames.

I’d given up all hope of a GameMaker IDE on Linux long ago, but a few days ago, this article crossed my newsfeed. It looks like new YoYoGame owners Opera is developing a port, currently in beta. It appears it will be supported on Ubuntu only, but that’s better than zero Linux distros, and Ubuntu is a pretty good choice.

This would have really excited me a decade ago, and would have been the last obstacle to me completely ditching Microsoft. While better late than never, it’s still not really here yet. It sounds like the beta currently has some rather severe issues that make it less than suitable for production at this time. Hopefully this will change quickly. It will be interesting to watch and see how it goes in the coming weeks.

Audacity: spyware?

A couple weeks ago, I saw a news headline somewhere about how the open source software project Audacity had been compromised as spyware, and that users who are concerned about freedom and privacy should not upgrade to version 3.

This article on ArsTechnica (purports to) debunk this scare story, but I think they arrive at a bogus conclusion. The highlighted text in the screen capture of the article below shows why.

Data necessary for law enforcement is most certainly a spyware concern. Hello!

Spyware is concerned with violating users privacy, period. It doesn’t matter whether there’s a good reason for it, or if it is legally mandated. If the software is gathering information for you, not on your behalf, and reporting it to someone else not you, without your express, informed consent, it fits the definition of spyware. Period.

The “data necessary for law enforcement” category might sound good to many people. Laws are nominally good, and law enforcement must therefore also be good, right?

Sure… Except in corrupt regimes. How might they abuse this?

A better question might be: What legitimate use might they have for this?

Audacity is vague as to exactly what data is “necessary” to provide to law enforcement.

My guess is that copyright cops want some way to track Audacity users who use Audacity in violation of copyright. Of course, there’s not really a way to know if the use of a copyrighted audio file might fall under Fair Use, and Big Copyright does not care — they are the enemy of Fair Use, unconditionally. They want to protect their interests, which means, ultimately, totalitarian-level control over all media, whether they own it or not.

But in more fantastical paranoid scenarios, law enforcement could encompass nominally “anti-terrorist” technologies that can be abused to target political enemies, minorities, etc. I don’t know that this is a thing, but depending on how vague Audacity’s project maintainers are, it could conceivably be a thing. If the perceived threat is that terrorist organizations use software to create media messages, embedding tracking data in the files to identify the computers that were used to produce it, geotag via IP address the location where those computers are, etc. is feasible, at least in principle.

Moreover, there’s little to stop evil regimes from requiring that all software must include whatever data gathering they see fit, turning computers into Big Brother boxes. We may not even be all that far from that reality as it is, given what we know about state actors and non-state actors dark influence the web and on mobile device apps.

The “telemetry” data gathering that vendors use to improve their product and see how users use their products are pretty standard by now, and most people aren’t going to be impacted by that, at least not in a negative way. But it’s a door opened a crack that enables a slippery slope of “if you can collect this, we can require you to collect what we want” so in a way telemetry features is a bit of a trojan horse. But as long as developers are transparent about what they gather, and make it opt-in, I don’t really have a problem with it.

The article does mention that these alleged spyware features are only in official builds, so if you don’t want them, you can compile the project from source and they will not be there. While good, only a very small number of people will compile a software project from source for themselves.

A colleague with an interest in IT and legal issues pointed out to me that:

As I understand it a third party like Audacity DOES have to hand over records if subpoenaed by law enforcement but DOESN’T have to *create* those records if it wasn’t going to create them anyway. E.g., if cops demand the WordPress server logs that I have, I do have to hand them over. But I don’t have to have logs at all if I don’t want to.

So no, they’re doing more than they have to to comply with the law. They could just not collect the information.

I would like to know more about this WSM Group — I googled and there’s a lot of three-letter acronym organizations that use this, but the most likely one, I would guess, could be WSM Music Group, Ltd.

According to wikipedia, they’re in Hong Kong. So, China’s oppressive laws are shaping the way “Free” (libre) software used worldwide is being developed? China is a huge IP violator and (obviously) privacy violator for its citizens, and there’s plenty of examples of Chinese electronics companies (such as Lenovo, Huawei, etc.) embedding insecure backdoors and spyware out the wazoo into consumer products.

So, no, I do not feel at all assured by any of this.

“Retro” gaming

I like video games, old and new. But I had more time to play video games when I was younger, and so I like the games that I spent the most time with the best, because they are most familiar to me. So I mostly like old games.

I also like new games that evoke the feeling of playing the old games that I liked.

There’s a lot of talk about “retro gaming” in the gamer communities I follow, and a recurring topic of conversation is to ask what the definition of “retro” is.

Usually people have some guideline, like “anything older than 10 (or 20, or some other arbitrary cutoff age) years old is retro”. Or sometimes they’ll refer to retro as anything that ran on an 8-bit or 16-bit processor. Then there’s a bit of discussion about console generations, about the transition from EEPROM cartridges to optical media, CD-ROM to DVD-ROM, and then the more recent transition away from optical media to solid state and digital download. People attempt to draw circles around the different features in order to define some set of characteristics that define retro.

I believe that these discussions are misguided.

Retro isn’t a thing that something becomes when it gets sufficiently old.

Rather, retro is when someone, in the present, does something in an outdated or obsolete way, creating something in the style of something that is now old.

Atari was state of the art. NES was state of the art. SNES was state of the art. N64 was state of the art. Sony Playstation was state of the art. The Wii was state of the art. Even if it wasn’t using cutting edge technology — Nintendo has a history of using less expensive, less impressive hardware than Sony/Microsoft, but is nonetheless state of the art in its current generation.

A game programmed to run natively on the Switch, but that looks and feels like a NES game, like Shovel Knight, is retro. The original Super Mario Bros. will never be retro — it is old, not retro. Super Mario 35, Nintendo’s 35th anniversary celebration that re-imagines the original SMB, is retro. An indie game written in for PCs that evokes the look and feel of a game that could have been implemented on the hardware of a generation or two ago, is retro.

Retro is something new made to resemble or evoke something old.

Howard Scott Warshaw: Once Upon Atari

I’m about halfway through Once Upon Atari: How I Made History By Killing an Industry by Howard Scott Warshaw, and loving it.

Howard Scott Warshaw, if you didn’t know, was a programmer for Atari in the early 80s. He worked in their console division, where he developed the games Yar’s Revenge, Raiders of the Lost Ark, and E.T.: The Extra-Terrestrial for the Atari 2600. These were groundbreaking games on the most popular home console of its day, and accomplished many “firsts”.

In 1983, the video game market suddenly collapsed, due to a combination of a multitude of factors, but at the time Warshaw’s E.T. was often given blame for causing what came to be known as the “Great Crash of ’83’. E.T. has often been referred to as “the worst video game of all time” but that is quite unfair to the game, which pushed the limits of the Atari 2600 hardware, and while not perfect, was by no means a bad game — although it was drastically over-produced by Atari, leading to a huge amount of unsold inventory, which hurt the company’s bottom line. Warshaw was given 5 weeks to develop the game, a feat thought by his managers to be impossible given that most Atari 2600 games took about 6 months to develop.

This is all well known and chronicled history for video game fans. Warshaw to his credit has been remarkably accessible and open about his story for some time, and has given numerous interviews over the years. He’s even been known to appear on the Atari Age facebook page and comment once in a while. He’s truly a legend of the industry, and a wonderful, brilliant human being. This book details his story, how he came to work for Atari, what went on there during his tenure (confirming a lot of the oft-retold stories about the workplace culture), and how he faced the indignity of being cast as the creator of the “worst game of all time”.

Warshaw left Atari and went on to become a licensed psychotherapist and has helped people like himself, who worked in the high tech field to deal with the immense pressures that they’re put under to be creative, be correct, and deliver products that will make billions of dollars for themselves or their shareholders.

I haven’t gotten to that part of the book yet, but from what I already know of his story, his approach to dealing with failure, or at least the perception that he had been responsible in large part for a massive and very public failure of what had just a year prior been the fastest growing company in the history of the world, is remarkable as it is instructive. He has embraced the label, but adds to it that his Yar’s Revenge is often cited as one of the best video games on the Atari, thus giving him the rightful claim to having the greatest range of any game developer. Turning a negative into a badge of pride, he has faced the critics, rebutted them with not just clever rhetoric, but also facts, figures, and sound reasoning, and provides us an example of how “failure” often isn’t failure, that perceptions matter, that what you tell yourself matters, and that above all it does not define us — we have the power, if we choose to use it, to define ourselves.

Warshaw’s writing style is accessible, not overly technical, candid, often quite humorous, warm and insightful. Reading his book makes me admire him even more than I did, and grateful for the handful of times that he’s Liked something that I’ve said on the Atari Age facebook page, and most of all, thankful for the many hours I spent as a young child engaging with, and enthralled by, his digital creations.

Insert Coin Bally/Midway/Williams Documentary

A few years ago, I backed a Kickstarter project to produce Insert Coin, a documentary of Bally/Midway games. The project finally delivered, and so far it looks like it’s been worth the wait. Luminaries from the arcade industry of the 80s and 90s, Eugene Jarvis, John Tobias and Ed Boone, and others give interviews talking about the development of classic titles from Defender to Mortal Kombat. If you’re a fan of these games, it’s well worth checking it out.