Analyst: Blocking Used Games Will Mean Retailer Backlash

We already know that publishers and developers despise the second-hand market. They claim they're losing money because these consumers aren't purchasing the pricy, mint copies. Only the retailers are generating revenue from these used games and thus are driving prices of the retail versions upwards.

But some of us on the consumer side say we flock to used versions because new copies are just too damn expensive. We bought the hardware, and we should have the right to play second-hand copies.

But recent reports have indicated that the next-generation Xbox 720 and PlayStation 4 "Orbis" consoles will either block or severely limit the play of second-hand games. Full-priced retail versions will be locked to a specific user, and those who pick up those titles at GameStop or GameGiant will be forced extra to unlock the full game for a price. Wedbush Securities analyst Michael Pachter believes that if Microsoft and Sony do implement some kind of blocking feature, retailers who thrive on second-hand sales will revolt, if not ban the new hardware altogether.

"It isn't really in Sony's or Microsoft's best interests to block used games. It would benefit Activision and EA slightly, and would hurt GameStop a great deal. If Sony unilaterally did this, I could see GameStop refusing to carry their console, and sales of the PS4 would therefore suffer," he told GamesIndustry.biz.

He also added that if one console maker blocked used games, and the others didn't, the one who does will see a loss of market share. None of the Big Three would be foolish enough to do this unilaterally, and none of them are evil enough to do it together as a group.

David Cole of DFC Intelligence agrees. "A system that tried to stop used game sales would probably turn off the core consumers that rush to trade in their old product to buy new product. In other words, I don't think it would do so well in the core market," he said.

Lewis Ward, IDC's research manager, says customers would rebel. "I can certainly see Sony stepping up the idea of $10 online passes for connected multiplayer and so on, but especially for families of limited means or that have a narrowband connection at home, the ability to buy/trade use discs is an important reason why they buy game consoles in the first place," he said.

It was also pointed out that any kind of DRM/security to block or limit used games would eventually be thwarted by hackers anyway, so implementing such measures would really be a waste of time.

About the author
This thread is closed for comments
40 comments
    Top Comments
  • You know, if game and console makers stopped being dicks, did away with excessive DRM and dropped prices to reasonable levels they would probably realize more profits by drawing the pirating community back into purchasing.

    Lowering prices would also give a long term net gain by reducing the amount of times a game would be resold.
    That is to say, if the games where affordable, many more people would buy them new, with profits going to the 'right' corporations.

    A little common sense in the board room would go a long way....
    36
  • Great...if they really implement this and sales dwindling, i bet the number one scapegoat will be "piracy is killing us".
    24
  • I doont understand how it cam be even legal to stop the used game buying. Also when I buy a Used car GM get no money from it. Why is sony and microsoft should make $ with used product ?
    22
  • Other Comments
  • You know, if game and console makers stopped being dicks, did away with excessive DRM and dropped prices to reasonable levels they would probably realize more profits by drawing the pirating community back into purchasing.

    Lowering prices would also give a long term net gain by reducing the amount of times a game would be resold.
    That is to say, if the games where affordable, many more people would buy them new, with profits going to the 'right' corporations.

    A little common sense in the board room would go a long way....
    36
  • Great...if they really implement this and sales dwindling, i bet the number one scapegoat will be "piracy is killing us".
    24
  • So I guess the labels of "M$" and "$ony" prove themselves true again.

    Because that's all it is.
    But for some reason I don't see this "make more money" scheme working the way everyone thinks it will.

    I'm calling it now:

    Game consoles will have very large hard drives (since they are extremely cheap).
    Digital distribution will appear, and will exist alongside DVD/Blu-Ray/whatever physical distribution.
    Digital distribution will be priced more aggressively than physical DVDs are. It's more convenient, too- we'll say about 10 bucks cheaper than the physical media (though still what would be normal retail price).

    So the physical media (whatever it turns out to be) is still going to be re-sellable; and there will be no locks on it. But many more people will turn around and buy from the digital, locked distribution channels because it's cheaper in the short-term. So the producers ALREADY have all the money they're going to get from the people who WILL NOT sell.

    But for the people who WILL sell, they've already got their price hike out of it. So GameStop will likely still stock the console because they still have a reason to exist: or not, if this scheme actually works.
    7