Game’s up: Video enthusiasts feel the pandemic pinch

Silicon shortage drives supply chain woes for gamers

For Andrew Hyde, an avid gamer since childhood, getting the new generation console has always been something of a special event.

“I’ll never forget when the Nintendo Wii came out,” said Hyde, recalling the memory from his childhood. “I was camped out overnight, in the rain, in front of the Toys R Us at Alderwood Mall. My friend Max and I took turns sitting in line and sitting in the car to keep warm. At one point, I had a sleeping bag that I brought out and ended up resting my feet on a copy of ‘Harry Potter and the Order of the Phoenix’ to keep my toes off the cold ground. It was so cold apparently, I didn’t realize it was wet in my bag and I ended up ruining the book.”

When launch day for the apple of his eye, a not so shiny but flat black Xbox Series X, came around the world looked much different. It was fall 2020 at the near height of the pandemic, with new case rates higher than they had ever been before in the United States. Most retailers had opted to change their model to accommodate the sales of the new console to be online only with store pickup.

“I was a little disappointed knowing I would not be able to camp out like I had done for so many other consoles in the past,” Hyde said. “Little did I know at the time that it was going to be only the beginning of my disappointment.”

“I was sitting at my laptop waiting for a chance to purchase a console when they were to go on sale at midnight on Nov. 10. I still remember it like it was yesterday, the product landing page said, ‘Coming Soon!’ At midnight, I refreshed the page and was immediately greeted with a very long loading of the page, and when it did finally come up, I was shocked to see ‘Out of Stock, Please Check Back Soon.’ I was livid, I immediately tried a few other retailers’ websites and came up with the same outcome.”

Hyde soon found himself to be a part of an ever-growing group of gaming enthusiasts shut out from easily purchasing a new generation console at retail prices. The cause if this, according to industry observers, is the result of a many factors coming to fruition in close enough succession to create massive bottlenecks in supply, exacerbated by pandemic related work stoppages, increased demand and secondary market actors stepping in to scoop up products for resale at a large profit.

It was no secret to anyone that was working last year that work was anything but normal. Between the different lockdowns, travel restrictions and social distancing guidelines, it comes as no surprise that manufacturers creating the common underlying product, microchips, to the Xbox Series X, consumer electronics and even new vehicles, were forced to temporarily reduce output or even completely halt production.

With people staying home more last year than previously and bolstered financially by stimulus checks it does not come as a surprise that demand was easily able to outstrip supply given the already challenged conditions manufacturers found themselves in. The real surprise that has come out of all of this is that even automakers are finding themselves unable to produce vehicles over the shortages in microchips needed to run onboard computers.

To add insult to injury for gaming enthusiasts and potential purchasers of these microprocessor powered products, scalpers have taken notice of the shortages and moved in to try and make money by picking up new consoles before consumers even have a chance to purchase them at retail prices. This has led to retailers bundling more of these highly desirable products that they are selling to deter scalpers from purchasing them. Unfortunately for some consumers like Hyde, “it really infuriates [him] that [retailers] are bundling products to deter scalpers, all it means is [he’s] paying the same price as he would a scalper to a retailer.”

For Hyde, unwilling to over-pay for a product bundle he does not desire or paying a scalper exorbitant prices, the wait for the new Xbox Series X continues as even Microsoft expects that supply will continue to be constrained at least in the short term due to significant demand for the new consoles.

Given the great disruptions and constraints we have seen in the supply chain this last year for microchips, it begs the question, how do we as a society grow and evolve out of this challenge. Will we finally get serious about recycling our old electronics? Will find better ways to repurpose old microprocessors and equipment for new purposes that can expand their useful lifespan?