Messy launches of PS5 and the new Xbox showed Sony and Microsoft once again failing at pre-orders, partly driven by the need to create a narrative of scarcity
Microsoft's Xbox Series X and Series S preorders went live on Tuesday, capping a rough week of product rollouts … Tweets: @tugboatbread and @gartenberg Tweets: Tugboat Brine / @tugboatbread : Like with all corps - It's on purpose lol. Free press, high demand, inflated prices, no pesky customer service, and you're gonna fuckin buy it anyways. Where's the downside? https://twitter.com/... Michael Gartenberg / @gartenberg : “Right now, if you don't have a confirmation email in your inbox for a new PlayStation/Xbox, or receipt for an Nvidia RTX 3080 card, you may not get your hands on one until 2021.” Many people would be happy happy if this the worst challenge they face today https://www.theverge.com/...
Context & Ripple Effects
When Microsoft opened Xbox Series X/S pre-orders on a Tuesday after a rough rollout week, both it and Sony repeated a familiar failure: storefronts crashed, allocations vanished in minutes, and analysts like Michael Gartenberg warned that anyone without a confirmation email might not get a console until the following year. Bloomberg's later reporting on the pandemic-era development of the Series X shows real supply friction behind the chaos, even as critics like @tugboatbread argued scarcity was cultivated on purpose for free press and inflated resale prices.
The aftermath validated both readings: Microsoft's head of IR later confirmed Xbox would be in short supply through at least June 2021 even as gaming revenue topped $5B, and holiday shoppers faced a resale economy of purchase bots and retail memberships (per NYT's market look) — meaning the launch-window mess hardened into a year-long condition rather than a one-day stumble.
First-order effects
- Retailers' launch allocations sold out almost immediately, leaving pre-order customers empty-handed and pushing them toward reseller pricing within hours.
- Sony and Microsoft captured enormous free coverage from sell-out headlines, but absorbed the reputational cost of crashed checkouts and no clear restock communication.
Second-order effects
- A structured resale market formed around the shortage — purchase bots, retail memberships, and social-media restock tips — converting Sony's and Microsoft's supply problem into a parasitic business layer.
- Scarcity stopped reading as demand when Japan first-week sales for both consoles came in below their predecessors (per Bloomberg-reported research), suggesting bottlenecks, not appetite, were setting the ceiling.
Third-order effects
- Launch-window units lost to chaos and scalpers compound over a generation: Microsoft's own filing conceded it had 'lost the console wars' with a 16% share of 2021 console sales and a 21% installed-base share (per IGN's report), a gap that traces partly to who actually got early hardware.
- If every generation opens this way, pre-orders stop functioning as a demand signal for Sony and Microsoft — and genuinely constrained semiconductor capacity makes engineered scarcity and accidental scarcity indistinguishable to buyers, corroding trust in launch economics altogether.
The trend: Console generations are settling into scarcity as their default launch state, where supply-chain limits and marketing narratives blur and pre-order execution quietly shapes an entire cycle's market share.