Comment by photochemsyn | Hacker News Reader

Comment by photochemsyn | Hacker News Reader

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Reading the article, this seems to be the core issue:

> “When your browser checks out an item on a retail site, it sends ‘requests’ to the site’s server. These requests are basically commands that tell the server what to do. Add this item to the cart, submit my order, and so on,” they wrote. “We send those commands associated with checking out to the servers of sites we automate without requiring a browser. Basically, we can mimic what a human does, stripping out the unnecessary lags and delays of a browser.”

> "The service is optimized for Target, Best Buy, Amazon, and Walmart."

This is hardly just game consoles, the whole baby formula problem is similarly gamed:

https://www.forbes.com/sites/laurendebter/2022/05/13/baby-fo...

Basically, if you see a shortage anywhere in the consumer/retail goods market, you can use a pool of capital to buy up all the remaining product as quickly as possible - assuming you have access to a pool of capital. This is the same kind of thing that happens in wartime scarcity, the only difference between this and say WWII is the bot technology being used. Now you're the sole supplier and can jack up prices and earn huge percentages. The resellers are just little black market manipulators, in other words, and the bot writers are their facilitators.

However, the main sources of product are the big corporate retailers, Amazon etc. They can't jack up the prices themselves (well, they can to some extent as current 'inflation' price hikes are resulting in record profits), but do they really care if automated bots are placing orders? Are they going to write bot-detecting software that might reduce the amount of orders being placed online? Why would they, that would reduce revenue.

It's not too surprising that this situation has come about, it's basically monopolistic manipulation of markets throughout the whole supply chain. A deregulated neoliberal paradise has many similarities to a war zone economy.

What makes you think resellers are "monopolistic"? The barriers to entry are incredibly low: "$300 fee and monthly $50 payments" (less if you have basic coding skills), plus capital for goods, which don't need to be purchased at traditional wholesale volumes. No single reseller is buying up "all the remaining product" -- they're buying e.g. "nine freshly purchased GeForce RTX 3080s".

They can't be "sole suppliers" because they would need to beat out everyone else running a bot. As a consequence, they're not able to price goods arbitrarily high. (But, as usual, efficient price discovery tends to be viewed as evil by consumers).

> as usual, efficient price discovery tends to be viewed as evil by consumers

This is the whole story. You can tell that game consoles, baby formula, and GPUs are under-priced, because it is worth spending hundreds of dollars and hours/weeks of dev time /on top of/ the too low price, just to get your hands on them for resale.

I think people get confused, because the effect of a spike in demand or a decrease in supply can look the same, from a pricing standpoint, as collusion amongst multiple retailers - but we're not talking about gas stations across the street from each other agreeing not to sell below X price, this is a massively distributed phenomenon, which again goes to show that it is a genuine reflection of the mis-pricing of goods in the current market.

The real tragedy when it comes to shortages of goods with inelastic demand, like baby formula, is that the various price gouging laws that prevent traditional retailers from correctly pricing items in the face of shortages, do nothing to actually control the price - in fact, they introduce a lot of inefficiency, and opportunity for counterfeits etc. I would much rather pay triple/quadruple at Target or Walmart than pay 0 because I'm looking at an empty shelf, or pay quintuple to some rando on eBay who may or may not actually be selling a genuine product.

Not only is this not the whole story, it's a fucking awful interpretation of the actual story.

Turn the clock back 23 years to 1999 and the GPU market was exploding, with tons of vendors, tons of chips, tons of competition, and excellent competing prices.

What's changed since then? The same shit that Michael Crichton spent a 10 minute video on YouTube talking about in 1999... the consolidation of companies in all markets by ever-growing behemoths who swallow up all competition.

There are what... three major chip foundries left, one of them is barely considered a "major" chip foundry (Global Foundries). The other two, Intel and TSMC, are so busy and booked up that they're running 24/7 nonstop to fill demand.

This could never happen... would never happen... if we had a dozen different foundries all of similar technological prowess and size, and 1999 GPU markets are a clear indicator of that. Literally dozens of brands, using half a dozen or so different chips from companies like PowerVR, NVIDIA, ATI, 3Dfx, etc.

GPUs aren't underpriced, our entire economic engine has become fouled by a lack of serious competition.

Don't believe that? Go read an entire list of Disney's holdings. It's damn near unbelievable that our cowardly politicians haven't trust-busted the megacorps that are around today. It's so egregious that America's founders would probably drag their peers out into the street and shoot them themselves if they could see how corrupt the system's become.

> It's not too surprising that this situation has come about, it's basically monopolistic manipulation of markets throughout the whole supply chain. A deregulated neoliberal paradise has many similarities to a war zone economy.

I actually tend to interpret it the opposite direction. This is clearly price gouging, which can hypothetically be regulated.

To me, the underlying issue is that near direct-to-consumer sales combined with public APIs and tooling like these bots has led to democratization of price gouging. Instead of being able to track the gouging back to a few businesses who are doing a lot of it, we now have to track a huge number of people who are individually doing a little of it.

It creates two problems. The first is that we don't have the resources to investigate and prosecute all the people doing it. The second is that each individual does a relatively small amount of damage, but it causes a large amount of damage in aggregate. We usually prosecute based on damage caused, but it's hard to show the damage of price gouging $1,000 or $10,000 worth of goods. If they were the only ones doing it, it wouldn't even be a problem. Yet, there's also no obvious collusion. They aren't causing scarcity individually, but they are in aggregate. I don't think the laws consider that at the moment.

It also looks bad for regulatory agencies to go after fairly normal folks. I don't get the impression these people are generally rich.

Why should price gouging luxury goods even be illegal?

I can at least understand the motivation of such laws when it comes to essentials like food or water (although many would argue that such laws do more harm than good by erasing market signals), but inability to run the latest video games in 4K isn't an emergency.

> current 'inflation' price hikes are resulting in record profits

This is misinformation. Walmart's net income is down 25% year-over-year. Target's is down 41% year-over-year. Excluding the $7.6B Rivian Automotive loss, Amazon's net income went from $8.1B to $0.04B, down 99.5% year-over-year. That loss would have been larger if AWS wasn't doing so extremely well on growth - AWS operating income was up 57% year-over-year. North America retail went from $3.45B operating income to a $1.568B operating loss. International retail went from $1.252B operating income to $1.281B operating loss.

I think a lot of people look at revenue (which will go up with inflation) rather than income (which is what is left over when you take out the costs). As costs rise faster than retail can raise their prices, margins are getting squeezed. Consumers have an idea of what a product should cost in their heads and it takes time for that to get un-stuck.

There's a reason that retail stocks tanked 9 days ago - investors saw Walmart's earnings on the 17th and Target's on the 18th. They weren't raking in profits. Inflation was squeezing them.

You think investors don't look at income???

Read it again.

This problem is easily solved by just flooding the market.

These companies have the advantage of scale, and huge amounts of pre-existing capital.

Sony could make 100,000,000 PS5s and send them all out to retailers and just flood the market so drastically that scalpers can't make a dollar. All of those consoles will eventually sell, and the real money in consoles is, and always has been, the game sales anyway.

> Sony could make 100,000,000 PS5s

They cannot order that many parts from their suppliers. The chip shortage is ultimately quite real.

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