GameStop shares tumble following Sony patent application

Specialty retailer per-share value dives 5 percent today after technology from Sony that could block used games emerges in filing.

GameStop shares dipped Thursday by more than 5 percent following the publication of Sony's patent application for technology that could block used games for a future system. The company closed trading today at $24.36, down $1.30 (or 5.07 percent) from the day's start.

The technology would make it so only the original purchasers of a game could play the title. Thus, retailers that buy and sell second-hand games like GameStop would be negatively impacted.

A GameStop representative was not immediately available to comment.

Analysts--speaking to Bloomberg Businessweek--said blocking used games, previously rumored to be a feature of the PlayStation 4, would be detrimental to Sony's overall business. It would put the platform at a competitive disadvantage, nullify revenue from game rentals, and elicit consumer backlash, these analysts said.

Janney Capital analyst Tony Wible told Bloomberg news of a similar technology surfaced in 2005 prior to the arrival of the PlayStation 3 and sent GameStop shares into a downward spiral. This technology, of course, never came to be.

In after-hours trading, GameStop shares have rebounded slightly, up $0.04 to $24.40.

Written By

Eddie Makuch is a news editor at GameSpot, and would like to see the Whalers return to Hartford.

Discussion

541 comments
Pyrosa
Pyrosa

It's simple:  If the games are fun and you enjoy them, buy them.  If not, play/buy something else.   The market will decide the final outcome -- as it always does.

 

That said, I've been advising folks to dump Gamestop shares for a year now; I'm glad to see the market finally catch up.

tgwolf
tgwolf

So doesn't this mean that Sony will see the light and take this as the writing on the wall...? No, of course not, people can forgive and forget (in the misdirected fashion this generation has come to be known for...) by the time the PS4 comes out, and if not US mentality will have rotted under the Ministry of Truth in power right now such that who knows what they can get away with in the end...If they elected Obama and for the reasons they did, yeah, this society can get duped, AND HOW!

sk8oridie44
sk8oridie44

As a long time Sony fan, and loyal to them, this makes me much more excited for the release of a Valve Console.

 

TL:DR - Valve console :)

Morde10668
Morde10668

But they have free online multiplayer atleast!

FlashCharge
FlashCharge

Both Sony and MS are employing the same techology on their new consoles. I hope a gamer boycott on these new consoles or a heavy write in campaign would have them think twice about doing it. Gamer reactions do make difference. Remember are their economic sources!

shiss27
shiss27

A better idea would be Sony adopting the first week low price model that the recording industry does with CDs. $45 the first week $60 there afterwards?

shiss27
shiss27

So I take it this automatically cuts out backwards compatibility. 

SecularSage
SecularSage

Everyone is assuming the worst about this situation, but all we're talking about is a patent that gives Sony a competitive advantage if this sort of technology becomes the norm. No one knows why the patent has been filed, and it might be as simple as Sony attempting to get in front of a trend and be in control of licensing fees should other platforms consider going to a more restrictive optical disc.

 

I think what it's going to do is allow for the retail release of games that are essentially downloadable titles (think games like Journey, Fez or Bastion) and the discs are just going to allow users to do a one-account install rather than running off the discs themselves. The reason for this is because gamers don't like buying game boxes with download codes on the inside, so this allows publishers to sell their smaller games at retail for an additional bump in revenue.

 

Something else that gamers need to consider is that retail is part of the reason games are $60. The margins on most games are fairly generous, and the publisher only gets 50-66% of the cover price (with the developer getting more like a sixth). Retail adds a lot of cost to the equation. So shifting to a single-use model that cuts out the need for retail and which emphasizes adding games to your account (like XBLA, PSN and Steam do so well already!) is the future of gaming. Perhaps there will be two levels - single and multi-user copies, with the multi-user level costing more to purchase.

Assassin0515
Assassin0515

they will not implement this in gaming I can see it being done for movies. Sony and developers would make more money by sell games stripped down and having DLC codes for most of the content. That way if a game is resold the DLC content will have to be bought for that game. In a way that is being done already with the online access codes.  Here is an example. You buy COD the disc will just have single player campaign then DLC for all the MP content and online access. Developers would jump on that in a second because they would get paid again on all used games.

neroist
neroist

This is a push to get rented and used games off the market. EA ceo has already stated that the future model for sales is free to try then mirco transactions to piece meal the game to you. This might sound good to some console gamers but it isn't. Any MMO vet can tell you when a game goes FTP with buying  content it costs more to play than a sub gets you.

M8ingSeezun
M8ingSeezun

I really don't like this from Sony. I've a long supporter of PS consoles, and the inability to play used games on a PS4/Orbis can actually deter me from buying one. Granted I don't usually by used games and prefer new games at retail, but their are many times that I missed out on few gems that the only way to buy them without paying high mark up prices is to get them used from other retailers, Gamestop being one of them.

This doesn't sound to good, Sony.

Kiaininja
Kiaininja

This DRM won't go a economically smooth as Sony would hope. They might think by attempting this stunt it will net them more easy money but it would also most likely cost them more money too. Like the cost of enforcing the DRM, more costumer services(fixing costumers' DRM problems), and more advertisement. And either the developers have to waist more funds to tighten the quality and bugs of games to convince players that buying full price their game won't end up in a lemon or shrink content off the game so it can cost less to develop in order to sell it cheap enough to get us to buy. Practically turning the console experience into a cheap casual bite sized game shovelware that Android and I-Phone/Pad are known for. The only thing that forces companies to try to sustain the quality of their games is them trying to stop us from selling it to the used retailers too early and hold off lowering the prices too soon. And some of Sony's so called smart decisions in technology didn't help them be more successful or benefited much the consumers like 3D-glasses gimmick, priority Vita memory cards, and cutting features off PS3.

FolkIore
FolkIore

Wasn't there a rumor that the 720 might be doing this as well?

unreal_master
unreal_master

PC has been doing this for years so it'll be nothing different.

jenovaschilld
jenovaschilld

I rarely buy used games from gamestop unless they have a golden gem i have never seen before because of the high mark up on used games. Also I give away any old games i have to my large family or ebay it because i get more value back out of something I bought new. 

 

Do not hate gamestop. 

 

They are following the same rule as any used book store, used funiture store, used car lot, used music store - which have all died, and of course my favorite store a comic book shop. 

 

Their prices have to reflect what will allow them to make a profit to stay in business even if that Astonishing Xmen  01-26 is 7yrs old box set is seven years old and used, which i could probably get on ebay over a few months but hard to tell what kinda quality it will be... ..  ummmmmm.

 

How would you all feel if marvel put in a tech to only allow the original purchaser to be able to read through a comic book,

a textbook,

a medical book,

music cd

automobile, 

a bible. 

Birth_By_Sorrow
Birth_By_Sorrow

I find it hard to believe Sony is that illogical. They should know what kind of backlash would come to be if they did implement this technology. It's common sense: gamers will not take kindly to it, and in a market where Sony is already lagging behind, they will only push themselves further back. Sales of the PS4 will be abysmal, and everyone will suffer including stores that sell used games as well as gamers (who cannot now trade in their games to use in purchasing new copies of games, which does provide Sony with revenue). 

The-Neon-Seal
The-Neon-Seal

I really do doubt that sony will impliment this tec. Sack what the greedy devs who have no right to whing say, it would be economic suiside. If they did however, all used game emporiums could just not stock that platform for super-evil-genious-overkill-revenge.

hardeddie
hardeddie

Isnt this what ios has done for their app store? And android for theirs? Theres no reason to panick. But correct me if im wrong.

jmartin1016
jmartin1016

I bought Dues Ex and Bulletstorm last night at Gamestop for a total price of $26. That's a great value. It would be awesome if I could buy those games for a similar price directly from the publishers, but for some reason they can't understand that even great games sometimes aren't worth the risk of losing $60. I'd never drop $60 on either, but they are worth $20 each. They only games I buy new are from developers that I want to support, which turns out to be like three a year. So good work High Moon, Gear Box, and Ninja Theory!

jmartin1016
jmartin1016

Obviously, the way video games are sold and resold needs to change. I'm all for publishers protecting their works. It costs a lot of money to develop games. That being said, whatever tactic they go with, be it some new tag system, or drm or keys, They need to understand that the market is flooded with excellent content. There is more supply than demand. I love video games, but im just not willing to pay $60 for one very often. If they are going to take away our ability to resell, that game better be $40 or less new.

flyersfan87
flyersfan87

Bad move by Sony. I can virtually guarantee that if they follow through on this, the other consoles will choke them to death this gen. They'll probably go to the lengths of making their UIs replete with ads for used game outlets like GameStop and Amazon...lol. I don't what Sony is thinking with this, they better really make sure their other division can carry them through all customers they are going to lose to other platforms.

jenovaschilld
jenovaschilld

 @shiss27 no I am sure they will be glad to let you play that single owner protected game on their next new system. 

 

of course for a small fee.

megamanfan
megamanfan

 @SecularSage This is an excellent point.  I would think that MS and Nintendo would come up with their own options to avoid paying fees to Sony.

SecularSage
SecularSage

 @M8ingSeezun Yeah, but that's going to end in the next generation as digital downloads become more and more prominent. On the PS3, you can already buy games that were getting quite expensive to purchase physically (Final Fantasy VII, Suikoden, Castlevania SOTN) for a relatively low price and have that game forever tied to your PSN account.

 

The days of needing to go to game stores to find rare or out-of-print titles are drawing to a close, and digital downloads really are the future. Physical copies are really going to be restricted to AAA releases (because of the marketing impact) and collector's editions in about 10 years.

jenovaschilld
jenovaschilld

 @M8ingSeezun I will not buy a console, platform, or product with technology to keep me from giving it away, reselling it, or trading it for dirty used underwear.... anyway.  I love the playstation and what they have done for gaming but have no problem voiceing my opinion through my dollars.  By not spending it on them and giving it to their competitors. 

The-Neon-Seal
The-Neon-Seal

 @jenovaschilld This is the thing. I'm a writter, an unpublished writter, but a writter non-the-less. If I someday (hopefully) get my books published and I see them on a market would I be bothered? Not one bit. Somebody bought it, was done with it and managed to get some of the funds back; where I live a lot of people don't have a lot of money so I'd say good for them. I already got my money when that first person bought it from waterstones and we live in an INTERACTIVE society, who am I to say that somebody can't borrow one of my books from a friend? It may get them into my series. Who am I to say what they do with it when they're finished with it? The money they recoup will in the long run filter back to the industry. I don't trade my novels (because I like books and want a library) but if I did the money would eventually go to a shiny new book so what the problem? People arn't as rich as the people who make media and the people who make media need to realise such.

shiss27
shiss27

 @Birth_By_Sorrow True. I wonder if the 'numbers guys' factored into their equations the missing revenue from not being able to trade in the old for their new titles. Looks like Infamous 3 will have to wait...

PayneKiller
PayneKiller

 @Birth_By_Sorrow thing is, sony doesn't have to be patenting it for themselves, but I bet there's someone out there that might want it. They patent it now and everyone that has use for it pays them.

Dalexith78
Dalexith78

 @jmartin1016 Then u over paid at Gamestop lol. Best Buy has both brand new for $9.99 each.

Dantes0007
Dantes0007

@jenovaschilld @shiss27 That violate the first sale doctrine, the game has been payoff allready.

CaesarIIII
CaesarIIII

 @jenovaschilld  @FolkIore 

Well, if the worst happens.... just think about that thousands of Xbox 360 and PS3 games, that you will be available to get very cheap. I can't wait. :D

platinumking320
platinumking320

@The-Neon-Seal @jenovaschilld Good post, but I think you meant the people who 'distribute' media. BIG diff. If it were up to more 'makers' The marketplace'd be much more liberal and competitive. Our prob is we've got too many 'cartel' heads in entertainment distribution, and they piecemeal and ruin our games because they just want our hard earned money.

Thieves...We're surrounded by petty thieves!!  Arrgh this economy!

jenovaschilld
jenovaschilld

 @The-Neon-Seal Well I am a nursser, and a good Er nursser at that, and hope people enjoy my nurssing. 

joking that was pretty funny above.

Anyway agree with your post whole heartedly. 

 

Digital entertainment like cars lose their value very quickly. 

Why movies, cars, books, etc cost so much new. 

Skyrim Amazing game worth every penny first day. 

5 yrs later - still an amazing game but lets face by then time has moved on, technology has moved on, etc. 

You cannot expect people to pay original prices. Nor allow a publisher to dictate what that value is. 

 

When an item is bought by you it has a value - but that value is owned by you and not dictated by someone else. If you want to resell that item - it is your choice. 

 

The-Neon-Seal
The-Neon-Seal

 @CaesarIIII  @Birth_By_Sorrow I wouldn't want to buy new games if I knew I couldn't trade them back in if they were disapointing. For me to buy new, untradable games they'd have to be as cheep as DVD's and theres no good reason why they can't be anyway, they'd make so much more money if their products were cheeper. Just another example of how a big company can't have their cake and eat it, or that they could make so much more money if they could only see past their personal greed.

PayneKiller
PayneKiller

 @Dalexith78  @jmartin1016 LOL It's still so funny that people believe they're getting some deal on used games at gamestop, when new games can be found elsewhere for less.

jenovaschilld
jenovaschilld

 @Dalexith78  @jmartin1016 I could spend days online trying to finish my Astonishing X-men 01-26 with questions as to quality and waiting weeks to get it. 

Like a used book store, car lot, used furniture store, you pay more for the convenience and immediate gratification of not waiting. 

shiss27
shiss27

 @jmartin1016 Especially Platinum. They made Bayonetta, Vanquish, and Revengeance.

Dantes0007
Dantes0007

@jenovaschilld @shiss27 That is why Wii u have sales problems, PS3 is different if you buy a game online you don't have to repurchase that game again for a new system i purchase several games of PS1 for my two PS3 and when i purchase the new PSvita i download all games for that system a not cost , if they charge you again for download a game for a new system what you already pay for it will damage the sale of the system, how bad it will be nobody knows but it will inflict pain in sales of the system that is a fact, this is a business that relay on costumers purchases if you hurt costumer wallet you goin to hurt yourself.

jenovaschilld
jenovaschilld

 @Dantes0007  @jenovaschilld  @shiss27 You are right game has been paid off already and they cannot charge you twice. 

BUT, like the OP said what if you bought a game for one system (ps3) but then the ps4 came out (again not picking on a system just an example).

They could not void your previous purchase of say FF9, but they sure could easily charge a fee for bringing it to the new system. 

Goto 1up.com there is a podcast reviewing the WiiU after it has been out a few weeks and they talk about how it was really hard to bring over wii dlc purchases to new wii u and that most probably the future will include Fee's to port over content from one machine to the next thereby making money twice. - legally. Also a really good interview. warning almost 1 1/4 hrs long. 

jenovaschilld
jenovaschilld

 @The-Neon-Seal I believe they already have employed mind control the only way I can think of as to why people bought the WII.

I mean i did and after a few months wondered "How did i get here, why am I waiving this remote around playing these ugly stupid games, and have i pissed on myself too."

The-Neon-Seal
The-Neon-Seal

 @jenovaschilld Oh, I'm pretty sure the big three console manufacturers and a lot of games companys would employ mind control if they could (and get away with it).