Both Sony and Microsoft released new flagship consoles in 2020: the PS5 and Xbox Series X/S. What should have been meticulously organized and seamlessly launched sales events from two of the world’s leading gaming and electronics brands quickly devolved into chaos. While some of the headaches were unavoidable—primarily due to changes in shopping and production patterns from the coronavirus pandemic—many could have been avoided with integrated direct-to-consumer (DTC) eCommerce strategies and the use of a specialty eCommerce site. Here are the most significant lessons retailers and brands should take away from these chaotic console releases.
The Chaotic Launches
Microsoft’s Xbox Series X and Series S were globally released on Nov. 10, 2020. Sony’s flagship console, the PS5, was released two days later in North America, Australia, Japan, South Korea, and New Zealand, with a full global release the following week. Both releases were highly anticipated, and both suffered from chaotic preorder sales events. Forbes’ Paul Tassi called PS5’s release, “A total bloodbath.”
That chaos did not go unnoticed. As gaming app reporter Nick Statt astutely pointed out, “For some reason, the biggest names in interactive entertainment can’t seem to solve the simple task of giving consumers an easy and straightforward way to exchange their money for a product.” While the cause of the chaos was not definitive, as eCommerce experts, we have some plausible theories.
Over-reliance on retailers
Sony leaned heavily on external retailers to market, manage, execute, and fulfill its global preorder sales event. This created a fractured and disorganized launch. There was a lack of defined DTC operations, infrastructure, and fulfillment strategy.
When Sony accidentally released the date of the preorder sale early, retailers scrambled to open their preorder sites as well. Consumers who missed the announcement were met with news that units were already sold out. “Trying to get your hands on a PS5 has been nothing short of a nightmare for many potential buyers so far, and that’s across every retailer, be it GameStop selling out of the 12 units per store they were allocated for in person reservations, or megacorp Amazon selling out because someone found the link early,” says Tassi.
Had Sony and Microsoft partnered with a full-service specialty eCommerce site solutions provider, there would have been a defined direction for multinational retailers to follow. A specialty sales site is equipped to handle every aspect of a release schedule, from preorder sales pipelines to back-end site infrastructures, site localization and global fulfillment.
Pico, a virtual reality hardware and software leader, used a specialty eCommerce site as its DTC solution to seamlessly sell in multiple currencies and languages as well as provide local fulfillment options. As a result, Pico expanded its global footprint in two months while achieving a 4.7% conversion rate.
Lack of protection against eCommerce fraud and bots
Heightened demand for these flagship products was caused in part by scalpers using bots to crawl retailer sites before human hands could even click through the purchasing process.
This caused considerable frustration for consumers. The Verge’s Nick Statt compared his issues trying to secure both consoles and slammed Sony and Microsoft for their inaction. “I would have really liked to see both companies set better expectations around how many units were available and what retailers were doing to ensure fair and reasonable preordering processes that weren’t plagued by scalpers and bots. We saw none of that—it’s been an utter free-for-all.”
While specific laws mark these practices as unlawful and fraudulent, governments cannot regulate this activity in real-time. And it is only getting worse for retailers. According to the Washington Post, “Imperva, a cybersecurity firm, says that among its clients, ‘bad bots’ accounted for 24.1 percent of all traffic in 2019—up from 20.4 percent in 2018.” Investing in fraud protection to flag purchases made by bots is worthwhile for retailers. A multi-stage, real-time, anti-fraud system, complete with pre- and post-payment security checks would have been able to flag suspicious console orders.
Hard-to-handle massive traffic peaks
Retailers selling the PS5 and Xbox Series X were at the mercy of massive, sudden traffic peaks and multiple competing and concurrent site visits. The BBC explains, “Demand for the new PlayStation has meant almost every website selling the console crashed at some point, leaving many people unable to actually buy the PS5 on its release day.” Sony later apologized to consumers on the official PlayStation Twitter account: “Let’s be honest: PS5 preorders could have been a lot smoother.” Customers spent their time stuck in virtual queuing systems—one which “grew to 150,000 customers long”—and left empty-handed.
Tom Warren with The Verge explains that because preorders for the new PS5 began a day earlier than Sony’s official launch date, “It led to a scramble as Walmart and others started randomly opening up their PS5 preorder slots.” Walmart’s entire website repeatedly crashed due to heavy traffic as consumers raced to pick up the console, according to GameRant’s Anthony Puelo.
Microsoft fared little better with the Xbox Series X launch, says Rachel Kaser with The Next Web. At least two major retailers — Best Buy and Amazon — did not launch preorder options on the consoles until well after the official launch time. Kaser adds that Amazon didn’t even have a page for the Xbox Series X ready for the deadline.
Both companies could have contained the chaos by utilizing a specialized eCommerce site platform that was designed to manage sudden rushes of site traffic. With its specialty sales site, digital entertainment provider Square Enix can handle extremely high sales velocity—up to 350 orders per second—without slowing conversion rates. Square Enix saw a 50% increase in total sales during its first year on the new platform, a customer retention increase of over 40% and a 25% increase in fourth-quarter holiday sales.
Fulfillment and delivery challenges
Gaming publishers spend a great deal of time and money crafting their preorder strategies to generate attention and early sales, but Sony and Microsoft’s launches demonstrate the need for more focus on the preorder pipeline.
Promotion is useless without an efficient process. Both companies suffered the types of fulfillment and delivery challenges that frustrate customers and damage a brand’s reputation. Corporations require an eCommerce solution that helps them manage and control global stock and shipping. With features like automatic inventory updates and full-service supply management, Sony and Microsoft could have kept their stock in-sync and utilized intelligent shipment routing per zone to save on costs and decrease delays.
Navigating issues caused by COVID-19
The coronavirus pandemic created unique problems for both the PS5 and Xbox Series X launches. Admittedly, there was little the brands could have done to anticipate the resulting issues. Demand was higher with customers who were social distancing at home. COVID-19 outbreaks across the globe meant manufacturers, retailers and logistics partners could not work at full capacity, and less supply led to higher prices and higher fraudulent activity from scalpers and bots. Areas like the U.K. were hit especially hard with challenges. Matt Gardner with Forbes explains, “Only a few companies offered online preorders, and that went about as well as expected—websites crashed, people were stuck in endless queues and limited stock meant only the luckiest gamers secured their chosen console from the comfort of their own homes.”
An specialized eCommerce site with a clearly defined preorder pipeline, along with global regulatory and logistics capabilities, could have been more agile in response to current world challenges.
Share the pre-sale burden
These releases were highly anticipated. Both suffered launches that failed to meet consumer expectations. A partnership with a team of dedicated eCommerce experts, developers, marketers, financial professionals, and logistics partners is crucial. Having the right people, programs and processes in place when issues arise makes all the difference. While pre-sales for popular products always face unexpected moments and challenges, specialty web stores can prevent much of a launch’s friction and deliver better customer experiences.