The global chip shortage continues to stymie supply chains, holding up everything from cars to consumer electronics. More than six months after Sony released the PS5, gamers are still hard-pressed to nab a system. But with a global glut of older consumer electronics floating around, could these supply shortages spur a retro gaming renaissance?
“We’re now witnessing the impact of the chip shortage whereby new consoles such as the PS5 are in limited supply and so people are buying up older consoles to meet their gaming needs,” said Liam Howley, CMO of Decluttr.
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Overall, refurbished tech sales across multiple categories jumped 57%, Howley explained, and these increases are particularly marked for older gaming consoles. In May, sales for Xbox One consoles increased 103%, PS3s jumped 38%, PS4 accessories and console sales rose 32% and surged 160% from May 16 to 22, according to Decluttr data.
“For customers who have been able to upgrade and have old consoles [lying] around collecting dust, now is also a great time to trade in old tech for the best return,” Howley said.
It’s not just older gaming consoles seeing a boost amid the chip shortage; older gaming titles are experiencing a “resurgence in popularity,” according to Howley.
“Our top five selling games over the last year were all for the Xbox 360 — including titles like Call of Duty Modern Warfare 2 and Black Ops,” he said.
Howley said the demand for consoles isn’t entirely due to the chip shortage and explained that these systems have seen a bump due to COVID-19 and public health restrictions.
“With many of us having to keep ourselves entertained at home during the pandemic, video games, new and old, have become increasingly popular,” he said.
Additionally, Howley said the company saw more people trading in older systems and games since they “had time to declutter during lockdown.”
“Many [people] were also facing increased financial uncertainty, so [they] were looking at alternative ways to make money,” he continued.
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The company Dream Arcades creates custom retro arcade systems, and the official “head geek” at the company, Mike Ware, discussed the impacts these shortages have had on business operations. Ware made note of the cross-industry supply disruptions and said the chip shortage has impacted “most electronic components not to mention wood, [steel] and just about everything else.”
He also referenced the chip-related bottlenecks in the automotive industry and said the main problem for many companies is “the inability to get a particular chip.”
“Fortunately, because our arcades are PC-based, we’ve been able to move to equivalent parts although often at a higher price. Many businesses do not have this luxury,” Ware said.
Remote work and gaming
To mitigate the spread of COVID-19 in-house, many companies have allowed employees to work from home. With the switch to remote work, Ware explained the company has seen decreased corporate purchases for breakroom arcades and tradeshows, but said these reductions have been “offset” by increased home arcade sales; particularly “four-player models.”
“A lot of people who had been thinking about getting an arcade for a while, suddenly found themselves stuck at home and decided it was time to pull the trigger on an arcade purchase,” Ware said.
The trend in home arcade purchases has continued despite companies bringing employees back to the traditional office, Ware explained.
“It’s quite possible consumers that are unable to get the latest generation consoles are turning to multiplayer video arcades in the interim to fill the need for a gaming system the whole family can enjoy,” he continued.
Historically, Ware said the company’s 19-inch Cabaret (a stand-up two-person unit) is typically one of its bestsellers, but, in the last year, the 40-inch four-player and a cocktail four-player system have been the company’s top sellers.
The chip shortage and coronavirus pandemic have caused logistical logjams throughout the operational pipeline. Aside from delays in manufacturing, Ware mentioned extensive shipping delays and premium pricing.
“Our last container took 10 weeks (up from the usual 3 weeks) until the time it arrived at our warehouse. And I’ve been told that container bookings are already full through mid July with prices three times higher than last year,” Ware said.
While the home sales have mostly counterbalanced the reduction in corporate sales, Ware said, the problem is now maintaining stock, noting that the company has routinely had one or two models out of stock.
“We expect this situation to continue if not worsen going into the Christmas holidays,” Ware said.