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Huge PS5, Xbox Series X Sales Premiums Show How Hot Gaming Is

Sony and Microsoft's latest consoles are fetching large premiums on websites such as eBay, as are Nvidia's latest gaming GPUs and AMD's latest desktop CPUs.
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Sony’s  (SNE) - Get Sony Corp. Report PlayStation 5 and Microsoft’s  (MSFT) - Get Microsoft Corporation Report Xbox Series X and S are now officially on sale. But for the time being, those looking to buy one of the consoles will have to pay a heftly premium relative to its list price.

And the same currently holds for those in the market for one of Nvidia’s  (NVDA) - Get NVIDIA Corporation Report new RTX 3000 series gaming GPUs, or one of AMD’s  (AMD) - Get Advanced Micro Devices, Inc. Report new Ryzen 5000 series desktop CPUs.

It’s no secret that both PC and console gaming activity has soared this year due to COVID-19, and that this surge, together with the fact that many consumers are spending a lot less right now on things like travel and dining, has been a boon for game publishers and hardware suppliers alike.

Nonetheless, the speed at which new gaming hardware has flown off the shelves -- often in spite of attempts by hardware suppliers to dial up production ahead of their launches amid expectations of strong demand -- has still been stunning at times. And the same goes for the aftermarket prices that gamers have been willing to pay for the hardware on eBay and other marketplaces.

Currently, less than 14 hours after the PS5 officially became available, the standard version of Sony’s new console is often selling for $900 to $1,000 on eBay, or more than twice its $499 list price. The “Digital Edition” of the PS5, which lacks an optical drive and has a $399 MSRP, is often selling for $800 to $900.

Meanwhile, Microsoft’s Xbox Series X, which became available on Tuesday and has a $499 MSRP, is generally selling for $800 to $900 online. The $299 Xbox Series S, which lacks an optical drive and has a less powerful GPU, is going for $400 to $450.

Those wanting the latest high-end PC gaming hardware face a similar predicament heading into the holiday season.

Unopened copies of Nvidia’s top-of-the-line GeForce RTX 3090 desktop GPU, which became available on Sept. 24 and has a $1,499 MSRP, often go for more than $2,000. The $699 RTX 3080, which became available on Sep. 17, is often selling for $1,100 to $1,300 unopened.

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Recent aftermarket sales of graphics cards featuring Nvidia's RTX 3080 GPU. Source: eBay.

Recent aftermarket sales of graphics cards featuring Nvidia's RTX 3080 GPU. Source: eBay.

And though Nvidia pushed back its launch by two weeks (to Oct. 29) in an attempt to better meet initial demand, the $499 RTX 3070 is selling for $700 to $800 unopened.

As for AMD, its Ryzen 5000 desktop CPUs, which became available on Nov. 5 and (among other things) deliver much better gaming performance than the older Ryzen 3000 line, are also now selling for large premiums.

The flagship, 16-core, Ryzen 9 5950X CPU, which has a $799 MSRP, is often selling for $1,400 to $1,600. The 12-core, $549, Ryzen 9 5900X has been going for $900 to $1,100. The 8-core, $449, Ryzen 7 5800X has been going for $600 to $700. And the 6-core, $299, Ryzen 5 5600X has been selling for $400 to $450.

During a recent interview with TheStreet, AMD EVP Rick Bergman said that his company had been anticipating strong initial demand for the Ryzen 5000 line, and planned production accordingly. But for the moment, demand is still well ahead of supply.

Not surprisingly, Bergman also forecast a strong reception for Microsoft and Sony’s new consoles, all of which are powered by AMD processors. On AMD’s Oct. 27 earnings call, CEO Lisa Su indicated that her company now expects console processor shipments to be up sequentially in Q4, after having previously forecast a sequential drop due to seasonal trends for the business. 

Meanwhile, Nvidia CEO Jensen Huang forecast in early October that RTX 3080 and 3090 shortages will last until 2021. And recently, Nintendo  (NTDOY) , whose Switch consoles contain Nvidia processors, raised its fiscal 2021 (ends in March 2021) forecast for Switch sales by 5 million to 24 million.

We’ll learn more about how much of a top-line boost Nvidia is getting right now from a white-hot gaming hardware market when the company posts its Oct. quarter earnings report after the close on Nov. 18.

Nvidia, AMD and Microsoft are holdings in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells these stocks? Learn more now.