What just happened? As the third-party market for new consoles and PC hardware continues to thrive, some are beginning to wonder whether traditional sales channels should be eliminated. In a recent post on Twitter, id Software co-founder John Carmack said it would be better if we had a “transparent auction system directly from the manufacturers and a more efficient market”.
“There would be a lot of outrage at the prices released immediately, but the removal of middlemen should pay off better for consumers in the end,” added Carmack.
Given the scarcity and speculators on things like 3090 GPUs and new consoles, it looks like it would really be better to have a transparent auction system directly from the manufacturers and a more efficient market. The world of sales channels has avoided this in the past, but we
– John Carmack (@ID_AA_Carmack) February 19, 2021
There’s a lot to digest here, so let’s take one bite at a time. For those who have not been following the gaming and hardware markets recently, both face multifaceted retail problems stemming in part from:
Carmack is not wrong to think out loud about how to solve problems that currently affect consoles and PC hardware, but the solution he presented has many flaws.
Selling directly to consumers via auction would effectively eliminate money changers, but that does not solve anything from the buyer’s point of view. The stock would still be out of stock and prices would still be well above retail. The only difference is that hardware manufacturers would be getting extra profits, instead of individual money changers.
This opens a new can of worms. Suddenly, Nvidia and AMD would be getting all the criticism and negative press for high prices, not money changers. You would also have to worry about the risk of a shortage of artificial stock. Furthermore, a complete restructuring of the sales process would be necessary.
Manufacturers have a task: to make products. Selling products directly to customers is not part of their job description and, without experience, they would probably not be very good at it. It reminds me of a quote from comedian Mitch Hedberg: “It’s not fair, you know? It’s like I’m a cook and I work a lot to become a really good cook, and they said “okay, you’re a cook … can you cultivate?”