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Gaming Consoles in PH: High Demand but Even Higher Costs

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A combination of next-generation product launches and COVID-19 lockdown restrictions has led to strong demand for gaming consoles. But as the pandemic drove demand, it also squeezed supply with global lockdowns disrupting manufacturing output and supply chains. This led to product shortages – and price increases.

A recent study by iPrice Group has revealed that almost two years after their launch, and with the COVID-19 pandemic firmly behind us, the price for gaming consoles on e-commerce platforms in Southeast Asia still exceeds recommended retail prices (RRP) by up to 64%. This inflated pricing, which is likely to continue for the next two years given the global chip shortage, is putting gaming consoles firmly in the ‘luxury goods’ bracket across most of Southeast Asia.

Comparing Pricing & Popularity of Gaming Consoles in SEA

iPrice Group, Southeast Asia’s price comparison platform, analyzed console pricing across the region’s e-commerce platforms. The analysis sought to determine how supply and demand have affected the actual price of gaming consoles available online.

The study compares data from 10,000 product offerings for gaming consoles from resellers on e-commerce catalogues across the Philippines, Indonesia, Malaysia, Singapore, and Vietnam. The research – which focused on consoles from Microsoft, Nintendo, and Sony – compared actual pricing with official pricing (Recommended Retail Pricing or RRP) to determine the extent to which online resellers were “marking up” to profit from shortages. By comparing actual pricing with average income data from the World Bank, the analysis also assessed the affordability of gaming consoles for SEA consumers.

Strong Demand and Constrained Supply Creating Vibrant Reseller Market

Over the last three years, each of the major gaming brands has released their next-generation consoles: the Microsoft Xbox (Series X; Series S – 2020), the Nintendo Switch (OLED; Lite – 2019 / 21), and the Sony PlayStation 5 (including a Digital version – 2020).

Anticipation of the release of these generation consoles, combined with COVID-19 restrictions which forced people to look for new ways to pass their time during lockdowns, created a surge of consumer interest. Another thing is that these next-generation gaming consoles have reached a whole new level giving gamers the best experience in terms of graphics, enhanced gameplay, realism, and convenience. But even as lockdown restrictions eased and the region has returned to normality, interest in the consoles and their games have remained strong, with search volume in the first half of 2022 being 64% higher than in the same period in 2019.

Gaming Console

For example, in the Philippines and the rest of SEA, even though the Nintendo Switch was released in 2019, it had the most significant search volumes in March 2020. Aside from the start of the lockdown, their exclusive game “Animal Crossing” was released, and it was one of the biggest games at the height of the pandemic.

While COVID-19 increased demand for new gaming consoles, it also constrained supply. Restrictions during the pandemic caused temporary closures of factories, whilst semiconductor chip manufacturers faced challenges to meet a surge in demand from consumer electronics manufacturers. This forced console manufacturers to reduce their production targets.

Strong demand and constrained supply led to shortages across the region, with online sellers taking advantage by offering units at significant markups on the RRP. This dynamic has been exacerbated by the existence of “scalpers”, opportunists using bots (software programmed to automate purchasing) to clear out new stock from official retailers when available.

Almost two years after the release of the new consoles, online resellers continue to take advantage of the situation, offering consoles on e-commerce platforms with an average 40% markup. With global chip supply shortages expected to continue into 2024, it is unlikely units will be readily available at RRP for some time to come.

Filipinos are Expected to pay 51% more than RRP to get your PS5

A comparison of reseller pricing by console type shows significant variation in markups, reflecting release date, user demand, and the ability of the manufacturer to meet local demand.

Our analysis shows that today, PlayStation 5 (“PS5”) consoles have the highest markup on RRP in the Philippines since it’s one of the most anticipated consoles by Sony. The PS5 is selling online with an average 44% price markup, with the cheaper PS5 Digital version selling with an average of 51% markup. The markup on the PS5 Digital is so high that the actual price often exceeds the price of the high-end Microsoft Xbox Series X, making it the most expensive console on the list.

The PS5, Sony’s first console since the PlayStation 4 (released in 2013), was highly anticipated, creating high levels of demand that even Sony themselves described as “unprecedented”. This excess of demand over supply has continued since the console’s launch with every re-stock seeing units sell out almost instantly.

“SEA consumers pay up to 64% more than the official pricing for gaming consoles”

The Philippines is 3rd to least to afford a gaming console

To analyze the affordability of gaming consoles across the region, iPrice combined data on the actual pricing of consoles from Southeast Asian online marketplaces with World Bank data on average incomes.

The study also shows a significant variation in the affordability of gaming consoles. This variability is due to a combination of reasons including pricing strategies of console manufacturers, market supply and demand, the activity of entrepreneurial resellers, and average income levels.

Gaming Console

The Philippines is one of the countries where a gaming console will cost the average Filipino at least 16% of their annual salary. With an average of PHP 186,226.83 per year, it will take around 3-4 months to afford one.
This compares to markets such as Indonesia and Vietnam where a console will cost the average person between a fifth and a quarter of the annual income that covers 24% and 20% of their annual salary.

Whilst the low affordability of consoles in Indonesia and Vietnam is in large part due to lower income levels in these markets, our analysis shows it is also impacted by the pricing of consoles, with pricing on e-commerce platforms 31% and 49% above RRP respectively. In Singapore on the other hand, 1% only of their salary is needed to afford these consoles.

Data shows gaming consoles are typically the most expensive in Indonesia, particularly for the lower-end models for each brand. The lower-end Xbox Series S – with an average 76% markup compared to the average Southeast Asia RRP – has the highest price markup in the region. Without official Microsoft stores in the country, consumers in Indonesia must rely on resellers to meet local demand from other markets.

Until demand and supply normalize, allowing actual pricing to move closer to the RRP, these products are likely to continue to be a luxury purchase for most people in Southeast Asia.

High Demand + Low Supply to Continue, Keeping Console Prices High

iPrice analysis revealed that two years after the launch of the consoles, and with the COVID-19 pandemic yesterday’s challenge, the real price for consoles on e-commerce platforms in Southeast Asia still exceeds the RRP by an average of 40% pushing gaming consoles firmly into the ‘luxury goods’ bracket across the region.

With search volume still high, and global chip shortages expected to continue into 2024, consumers in Southeast Asia are likely to continue to face high gaming console prices into 2023, with online resellers continuing to profit.

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