How to (theoretically) get your next gaming hardware upgrade for cheap

It's a woefully bad time to upgrade your gaming hardware. In fact it probably hasn't been this bad since the crypto boom that ate all of the Radeons from the market. Not only are we in a pandemic, where everybody is inside and desperate for entertainment, but we are also in a global silicon shortage due to market supply lines operating at reduced efficiency. This means that chip manufacturers aren't able to meet the market demand. It also doesn't help that the crypto market is booming again, so there's increased demand for mining hardware as well.

This has caused prices the skyrocket. The MSRP of new GPUs and CPUs is already inflated due to market demand, but particularly the constant scalping is driving up the price of actually available hardware. It has become a recurring occurrence that when a new product, such as a console, CPU or a GPU, comes to market, masses of bots will immediately snatch up all of the available units, leaving none for the regular consumers. Then the scalpers operating these bots will put the products they bought on the second-hand market at ridiculous markup, often hovering around 100-200% over the MSRP.

Essentially what has happened is that these scalpers are speculating on the value of these products. The scalper's gamble is simple: the supply is low, the demand is exceedingly high and that consumer's are willing to pay up twice or three times the normal price to immediately get their hands on the product. This appears to be working, considering every new AMD or Nvidia product release has basically been reduced to a glorified paper launch. They wouldn't continue doing this if there was no profit in it.

A gamble's a gamble

Ultimately the scalper's are making a bet when they are doing this. They aren't offering a product of their own, they are simply creating a problem and then providing a solution to that problem at a price. The product they have is objectively of worse quality than what an actual retailer would offer, if for no other reason than the fact that the warranty you are getting will be diminished by the time you get your hands on it. Because the scalper's are buying retail and not wholesale, they can never compete on price. Additionally scalper's will likely have less storage and their storage will cost more per cubic meter than that of retail.

This means that they have created a house of cards, where the only thing keeping it standing is that supply-demand disparity. If supply goes up, they need to buy more to ensure people cannot buy their products from retail at cheaper prices. If demand starts dropping, they need to start emptying their inventory or be left with a bunch of products that they can only sell at a loss. And if one scalper starts dropping their prices, the rest of the scalpers have to follow or be left behind. This is the chink in the armour of the scalper's scheme.

Remember $GME?

Here comes the brilliant plan. Not that long ago there was a lot of news about how r/wallstreetbets engaged in something called a "short squeeze". In simple terms, some big investors were betting on the price of certain stocks, particularly GameStop, going down in value. In fact they were so heavily invested in GameStop's value going down that they left themselves exposed to a bunch of opportunists who wouldn't mind stepping into a grey area of market manipulation. People on WSB (and later other investors) bought heavily into $GME, which caused its price to start rising. This meant the big investors had to scramble to buy stock quickly to get their money out of failing short positions, which caused the price to surge even more. This made a fair number of people very rich for a short while and caused huge losses for the people jumping on the bandwagon too late when the price crashed down shortly after.

The scalper's are in a sort of a reverse position. They expect the demand to be very high and thus the price to be on the way up. It's also very important for them to get their money out while this is still the case. So, it should therefore be possible to enact the exact opposite of a short squeeze, which hopefully would cause a similar scramble, but in this case it would be a race to the bottom instead of a rocket to the moon.

How you can do this is extremely simple and it's an investment strategy that requires no capital or phone apps. All you need to do is to do nothing. If you choke out the scalpers of demand, they will be forced into a price death-spiral which will eventually drop the price well below retail. The second-hand market will be flooded with all of the scalped GPUs, CPUs and gaming consoles and you can just pick and choose your desired upgrade path when the price drops down to a level you find comfortable. Maybe cheap second-hand hardware would also get retail and hardware vendors to address the scalping issue properly too.

Waiting requires some strategy too

Obviously waiting isn't totally painless either, immediacy is after all one of the key aspects in the scalper's business. If there was no value in getting all of these new products, then this whole scalping issue wouldn't even exist. This means that you will need to somehow make do with what you have for the time being if you intend to lay siege to the scalpers.

The most likely reason you are interested in getting a gaming upgrade in the first place is because you either have your eyes on a game that doesn't quite run on your current system. Either performance is poor or the game simply doesn't work on your system.

There's two ways your can approach this problem. You could do the LowSpecGamer thing and use mods and obscure configuration options to extract as much performance out of your games as possible. This is a reasonable way to go if there's a game you absolutely want to play. Another alternative is to use a streaming service such as GeForce Now or Google Stadia to off-load the running of the game to remote servers. I, however, would recommend against staying with Stadia for long-term. The path that I would recommend most is exploring the number of titles in the indie and slightly more retro markets, since these can offer very nice gaming experiences with very modest hardware requirements. I would argue that most of the games I've played over the past year have been indies that my RX580 is total overkill for. In fact, out of my favourite games of a decade only a few would have problems running on my laptop's A10-9600p APU, which was slow even back in 2016.

However, it's possible that there is some amount of immediacy for your hardware purchase. Perhaps you fried your CPU or GPU and need a replacement now. In this case I'd recommend either buying into a non-scalped low-end interim GPU from retail or buying a previous gen second-hand GPU. AMD GPUs in particular have a fair bit of longevity on Linux thanks to FOSS drivers, so you could still get decent utility out of even GCN 1.0 cards.

In the meantime you should make the best out of what you have. Take good care of your hardware by keeping it clean and cool and maybe dial back some riskier overclocks to make sure you don't accidentally blow up your rig. Replace heavy software with more light-weight alternatives. The important thing is to keep your money away from the hands of the scalpers.

Great in theory

The plan might sound good, but there's a reason why I added "theoretically" to the title. Smoking out the scalpers would require the gamer market to act rationally. And as the past year has shown, you are expecting a lot if you hope for consumers to act rationally. Frankly it's surprising nobody tried to scalp toilet paper last year. Gamers are also infamously impatient and particularly the hardcore crowd treats new hardware like fashion and might find the mere suggestion of making most of last-gen hardware insulting.

But hey, at least I've made this modest proposal public and you are free to follow it if you want. I'm in a lucky position in the sense that I have a fairly up-to-date machine that keeps up with my use-cases, so I'll probably be able to hold onto it for a good while still. Hopefully by the time I need to do some upgrading these scalpers will no longer be an issue.