The last week has been a great reminder about just how miserable an experience new hardware launches are in gaming. The hours spent refreshing web pages to see if you can squeeze in a pre-order and hopefully get your new console or GPU before Christmas is a feature often left unmentioned out of the many bells and whistles that new technology provides. Despite this, both Sony and Nvidia managed to perfectly highlight why trying to be an early adopter is an exercise in self-inflicted pain. Microsoft repeated the trend by having pre-orders go live when lots of people who wanted to try and nab one were asleep, and still had websites crashing due to high traffic.
Considering the gaming industry prides itself on being a natural innovator and on the cutting edge of technology, you might wonder why nobody has been able to come up with a better way to do things. The answer, simply, is that there is no better way to do things.
Launching new hardware is, by definition, a time when companies desperately need to whip up furious interest in its products. There is a lot at risk with any launch, especially when major competitors are kicking off the next-generation of gaming within two days of each other. While Sony and Microsoft try and play it cool, both desperately needs its consumer base to pre-order as many units as possible, as quickly as possible. This will keep investors happy, and negative headlines about losing the pre-order race to the competition are not the best way to start a new sales cycle.
The next step is the real kicker, and it boils down to simple logistics. Companies can only make so many units per hour, and if they want to make more, they need to embrace the concept of escalating cost. They can’t simply decide to make millions of extra units, because all those units need to be stored securely or transported to retailers, and none of this can happen too fast or they risk stock loss or units hitting the street too soon. Make too many, and they run the risk of a high number of units sitting in storage, doing little more than costing money. This then affects unit cost, which is a surefire way to lose potential customers.
Production volume will also be limited by the number of parts that component suppliers can make. Both companies are once again turning to AMD for parts in an attempt to keep costs down means both are relying on one company to produce CPUs and GPUs for their consoles, giving AMD an extraordinary level of power and control over them. Agreements on supply volume need to be reached early, and this can only be dictated by the potential demand of customers, which can be very hard to predict.
While consumers’ common refrain will be that companies should “just make more” hardware, it is just not that simple. Each unit needs to be produced, transported to a reseller, and then sold. Between each step, it must be stored securely, which is costly. It all boils down to providing a product and keeping costs down to a level that customers can afford.
On top of this, production volumes will often have been agreed upon well in advance with both the facilities that make the hardware and the companies that produce the required components. Setting up new manufacturing lines is costly. Both console makers will already be somewhat subsidizing every unit bought based on the simple performance vs. price ratio of each new generation. A console’s power peaks at the start of each generation then remains stagnant, but the technology involved is often cutting edge and expensive to develop and produce at launch. There is a delicate balance to be struck to keep costs manageable, and this is why both companies are offering digital-only versions at launch: to get people into their digital ecosystems, increasing potential income from those consumers.
The final piece of the puzzle is the third parties that Sony, Microsoft, Nvidia, and others rely on to sell their products. Online retailers can only handle so much traffic each day. That traffic will be driven to an incredible peak when new consoles or components hit the market, encouraged by the hype-fueling marketing machine. This will cause websites to crash, and a large percent of pre-orders will just end up going into a queue, those consumers forced to wait for second and third batch deliveries to have their orders fulfilled. Once again, the aim of the game here is not to fulfill your pre-order, although mea culpas will be issued by all involved; it is just about getting your money as quickly as possible, because this will stop you from giving it to someone else.
It’s just the hard reality that physically selling goods will always be a limitation, and companies’ overt greed will always win out over a smooth customer experience. As long as you are putting your money down, promising not to go to the competition, these companies’ aim has been achieved. Getting your product to you in a timely fashion is a secondary concern.
