Resellers are deploying “scalper bots” to snag the latest video game consoles made by Sony Corporation (NYSE:SNE) and Microsoft Corporation (NASDAQ:MSFT) from online stores, Reuters reported Tuesday.
What Happened: The scalper bots buy the products online only to relist them for higher prices elsewhere on reseller websites such as those run by eBay Inc (NASDAQ:EBAY) and Amazon.com, Inc (NASDAQ:AMZN), according to Reuters.
The COVID-19 pandemic has further led to increased scalping and also forced some online stores such as ones run by Walmart Inc (NYSE:WMT), Facebook Inc’s (NASDAQ:FB) Marketplace, and Nike Inc (NYSE:NKE) to battle the software bots.
A Walmart spokesperson told Reuters that they’ve “built, deployed and continuously update our own bot-detection tools that allow us to successfully block the vast majority of bots.”
The spokesperson admitted that the “release of next-gen consoles is creating traffic volume and patterns that have never been seen before.”
Some like Nike are giving long-established members of its SNKRS app the chance to reserve shoes which can be picked up at a physical store, as per Reuters.
Why It Matters: At the launch of the consoles last month, Walmart and Best Buy Co Inc (NYSE:BBY) websites crashed due to overwhelming demand.
Walmart is conducting after-sale audits and claims that the vast majority of next-gen PlayStation5 and the Xbox consoles have been sold to legitimate customers, noted Reuters.
Resale bots are reportedly on sale for up to $5,000 per piece and limited access is available for as little as $10 to $20.
U.S. law does not allow scalping tickets but there are no such protections available to retailers like Walmart and Facebook Marketplace.
Price Action: Microsoft shares closed 0.8% higher at $216.01 on Tuesday and gained 0.23% in the after-hours session. On the same day, Sony shares closed mostly unchanged at $93.37 in New York.
Related Link: Sony PlayStation 5 Sold Out In Japan On First Day Of Launch
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