Gamestop Cropped

Blocking Used Game Market Would Cause “Significant Diminish” In Sales of Next Generation Consoles

Rumors have been flying around all over speculating that the next generation of consoles will block the ability to play used games. These rumors have been accelerated even more with this Edge report claiming that the next Xbox will require a constant internet connection, effectively ruining the second hand game market. Gamestop, one of the most prominent players in the used game market, have revealed their opinions and predictions about what will happen in the next console generation.

Find out what the company believes, and why other analysts believe the used game market is not going anywhere by reading on…

Matt Hodges, vice president of public relations and investors relations of Gamestop, explained in an email that he believes the used game market is relatively safe. He reasoned, “We know the desire to purchase a next-generation console would be significantly diminished if new consoles were to prohibit playing pre-owned games, limit portability, or not play new physical games”

This statement comes after Gamestop’s stocks dropped six percent to $25.20. Revenue for Gamestop is stimulated heavily by the used game market, with 46% of their gross profit and 27% of overall revenues coming from used game sales. Many analysts have expressed their confidence that the used game market is key to the success of video games, and is thus not going anywhere.

Michael Olson, who works as an analyst for Piper Jaffray Cos., argued that “We are confident that both the new PlayStation and the new Xbox will support used games,” and thus the drop in stock was a buying opportunity and not a sign of worry. Another analyst, Michael Pachter of Wedbush Securities, revealed a similar mindset in saying:

There is a ZERO chance that the console manufacturers will MANDATE that used games cannot be played. That means there is a zero chance of no disc drive, and a zero chance that they will require games to be registered to specific consoles, eliminating the possibility of used games being played. It doesn’t make economic sense for either of them (I’m leaving Nintendo out of the discussion) to do so by themselves, as it would concede a pretty significant marketing advantage to the other: If Sony did this unilaterally, Microsoft would exploit that fact and advertise their console as the consumer friendly alternative, and vice versa.

He did reiterate that there is a possibility for publishers to require a purchase code to play.

An announcement will be coming from Sony on February 20th, so gamers concerned with this issue might have some answers coming very soon.

Sources: Bloomberg via Gamespot, Edge

  • RestlessPoon

    Regardless of popularity, banning used games is good for the industry. It gets developers/publishers etc. more revenue if they make money off of every game they’ve produced. However, I still doubt Sony and Microsoft will employ this, seeing as how unpopular it is. At most, they’ll ship each game with an activation code, and you’d have to buy a new one if you bought the game used. But that’s a hassle, so I don’t expect anything to come of these “banning used games” rumors. Well, I hope not, anyway. Even though I rarely buy used, there are always games I’d rather not shell out $60 for.

  • http://www.facebook.com/Kakeru Gilbert Warner

    The biggest reason I don’t think we’ll ever see MS, Sony, or Nintendo lock out used games is simply because they have no incentive to. It would only hurt them because it would anger consumers. Maybe it’s something publishers want, but it’s truly foolish of them to wish for such a thing because it only makes them look greedy and anti-consumer. Regardless of how good the games are that they might release, certain people will refuse to buy them on principle, and then discourage others from buying them as well.

    • the_mags

      I think Project 10 Dollar has proven that used games sales don’t always have to hurt the publisher. If a system like this were to go into place, games would have to be available both physically and digitally, and once activated, they are forever available as a download–something I think a certain company will be doing when they finally launch their box.

  • http://www.facebook.com/blake.wigert Blake Wigert

    Blocking Used Game Market Would Cause “Significant Diminish” In Sales of Next Generation Consoles

    Ha, try destroy the video game industry.

  • ……….

    This is why Nintendo wins all.