Pachter: Publishers won't block Xbox One used games

Wedbush Securities analyst Michael Pachter believes any publisher that disables used gaming runs risk of significant backlash or boycotts.

Microsoft yesterday clarified the Xbox One's stance on used games, saying decisions will be left up to publishers concerning whether such games will be allowed and if a fee is to be required.

In a note to investors today, Wedbush Securities analyst Michael Pachter said the majority of publishers will not block used games, at least in the system's first few yeas.

"In our view, any publisher that disables used gaming risks a backlash or boycott of its titles by gamers, negatively impacting sales," he said.

Pachter told GameSpot that activation fees are similarly unlikely.

"They would face a huge backlash. They wanted manufacturers to do the dirty work, and both refused," he said.

GameSpot has contacted major publishers including Activision Blizzard, Electronic Arts, Capcom, Bethesda, Warner Bros., Take-Two, Ubisoft, and Konami about their stance on Xbox One used games. Thus far, only Bethesda has responded.

"We haven't had time to fully understand and evaluate their policy," a company representative said.

Pachter also commented on how Microsoft's Xbox One secondhand policy may affect leading industry retailer GameStop. He said publishers understand that currency generated from game trade-ins is beneficial to them and the secondhand market will remain viable overall.

However, Pachter also said that publishers may block the trade-in of games for a certain period of time following a game's launch to avoid the cannibalization of new game sales.

"However, many believe that used games sold in proximity to a new game’s release cannibalizes sales of the new title (we believe this is probably true), so we think that some publishers may limit used game trade-ins for a specified period of time following the game’s launch," he said.

Grand Theft Auto parent publisher Take-Two Interactive CEO Strauss Zelnick said last month that publishers are only concerned about used games for eight weeks after launch.

"If you can keep the game in consumer's hands for 8 weeks, you almost don't care anymore about used game sales because it's the first 8 weeks that really nail you," he said at the time.

According to Pachter, GameStop stands to be hurt the most from Microsoft's recent announcement that all Xbox One games will be available digitally and physically on day-one.

"We believe that this disclosure has the greatest potential to negatively impact GameStop’s business, as GameStop is unlikely to participate directly in these digital sales," he said.

At the same time, though, Pachter said it is in the best interests of Microsoft and publishers to integrate GameStop's PowerUp Rewards currency into digital transactions in some manner. How such a setup would work, according to Pachter, is laid out below.

"We think it is possible that either gamers will be allowed to purchase digital content key codes from GameStop’s DLC kiosks, or that Microsoft will somehow allow the company to integrate its PowerUp Rewards program directly through Xbox Live," Pachter said.

"In the first scenario, GameStop’s DLC kiosks could be used by Microsoft and the publishers to garner significant interest in upcoming and already available titles, maximizing pre-orders and in-store sales," he added. "In the second scenario, the amount of currency available to make purchases on Xbox Live would increase dramatically, and all parties would benefit from increased online spending."

The Xbox One launches later this year. GameSpot will have more on the platform next week during the 2013 Electronic Entertainment Expo.

Written By

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

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419 comments
Sn0wGl0be
Sn0wGl0be

The fact that they can block games at all is disturbing enough, I dont care what "promises" they might keep. I'm not putting my faith in someone else in the hopes that I'll be given the "privilege" to use something I payed for. 

MrTechnoide
MrTechnoide

Well Eddie, Microsoft Lied! Major Nelson confirms on twitter "NO USED GAME or RENTAL MARKET for XB1"  I was a fan of Xbox until 6/10/13 when they officially FUCKED US! BTW if you had done a little research you would have found that EA is the one behind the DRM push on XB1  ATGS was ahead of the curve http://www.allthatgamingstuff.com/ea-and-digital-rights-managment/

Nintyfan95
Nintyfan95

Pachter is a Xbox fanboy so what does it matter. 

cuk2uk
cuk2uk

well by not blocking used games publishers also run a risk of not earning any money and going bankrupt >.>

buffaloblitz85
buffaloblitz85

No 15-25 year old kid is going to boycott these publishers. These are the same dummies that buy rehashed game after rehashed game....besides what gamer is just all of a sudden going to stop gaming, maybe for a month or two tops.

Richardthe3rd
Richardthe3rd

Honestly, now that we know a bit more about XBone's policy on this, it's an interesting way of passing the buck onto Publishers.

Previously, publishers could lobby Microsoft to add DRM measures, and in doing so, M$ would take ALL of the negative PR.

With this method, it's shared, with a majority of the blame actually getting passed through M$ and potentially onto the publisher.

Well played M$; I think the XBone has a lot of very serious issues and we have yet to see how they go over with customers, but this actually gives pubs what they want and makes them responsible for the decision.  I actually really, really like that.

Angelsoft717
Angelsoft717

I hate that they say "For the first few years atleast" So I'm going to buy probably a 500$ piece of hardware, that gets an essentiall function cut off of it 2 years down the line? No. There's no grey here, only black and white. Either you go the whole way and leave me out of it, or you don't and I buy your stuff.

buffaloblitz85
buffaloblitz85

But if all major publishers stand together they will be able to enforce a bane on used games.  Mark my words this will happen

berzerk0912
berzerk0912

Wow!! There is a lot of serious damage control going around, but too late the cat is already out the bag.

bunchanumbers
bunchanumbers

Its not even a gaming console. Its a gaming service. Its actually a bad gaming service since they decided to underpower the device the service will work on. 

If they were really going to make a gaming service they should have had no hardware restrictions and skipped the box altogether. This would have made the service better because developers could make games and not be held back by the weak hardware. 

kcender08
kcender08

Yeah, you bet your asses they will get boycotted. You don't treat gamers with respect, then you don't get any either.

kackarat24
kackarat24

Micorsoft has done nothing but crap on gamers at the beginning of the most important time in gaming, a new generation. MS has pushed me further and further away with the crap they have been doing as of late. I heard the rumors about 12-18 mos ago that MS may do something like this. I did not want to believe it thinking MS would not risk pissing on the group that has put them at the forefront of gaming. But, here we are, they did it, they chose to totally screw gamers, ruin the Xbox experience and loose the next Gen Wars all before the next Gen even began.

I have been a gamer for years, going back to when the NES came out intially. I have followed gaming ever since. I have most all of the consoles that have come out, I keep all of my games, I buy the occasional used game to keep up and find hard to find games etc. Yes, I have in recent times increased my purchasing of used games only because of crappy economy. But, I will buy a brand new game if I feel that the game is entirely worth a $60+ price tag. Or, I will wait for said game to drop in price and then buy it new on Amazon or something. 

I don't care what MS reveals at E3. I will not waste my money on MS products from here on out. I will pick up a PS3, a grip of games for it, flesh out my Wii library, the rest of my 360 library and pick up a Wii U for the 1st party titles of course.

Gonna sit the next Gen out on this one. 

Georgemen
Georgemen

In other news, Pachter says he is an analyst of Wedbush Securities called Michael Pachter.

pwc2
pwc2

MS, You have screwed up the Xbox 1 enough, don't dig a deeper well.

Shantmaster_K
Shantmaster_K

It wouldn't be a good idea for any developer to do so. Don't make the costumers angry. 

rulo90
rulo90

MS is just shitting on itself and making me laugh by every day that passes by. 

Thank god i dont even own any xbox related crap. Have fun xboxfanboys, watching your favorite shows on the new crapbox done. LMFAO!!  XD

Shango4
Shango4

Microsoft: how do you want the xbox one?

everyone: awesome games!

Microsoft: you want T.V.?

everyone: .....we said games

Microsoft: did you say you want always on DRM and blocked used games?

everyone: WE JUST WANT SOME DAMN GAMES!!

Microsoft: T.V. it is

everyone: *facepalm* when's the ps4 coming out?

Senor_Kami
Senor_Kami

I don't think they care about backlash and we've seen the complete joke that video game boycotts are.  I'm surprised that MS didn't basically open up their own virtual "used" games marketplace that was competitive with Gamestop prices so that everyone involved got the same percentages from new game sales as they did from used games.  Their real issue isn't with used games, it's the money they bring in.  It baffles me a bit that all of the affected parties seem unwilling to try and cash in on it.

Dangerous231
Dangerous231

Xbox one day one buy for me great features and games well be out of this world like on any gaming console or pc... ppl this is a product nothing more  nothing less if don’t agree with this products restrictions and they are an inconvenience for you then like any other product don't buy it ..But to sit here wasting your time trying to make everybody believe what you want them to, is just silly and won’t work...just like it doesn't work with the COD games but all site have nothing to say  about cod but bad things when it comes to the views  comments.. so I’m not shocked at all the hate for the Xbox one all around the internet ppl be smart and make up your own mind about Xbox one and think do these restrictions inconvenience you if not watch E3 and see if the games are to your licking but if they aren’t, don’t buy it but why wine about it on sites it’s your choice nobody else..

macrules_640
macrules_640

I can already see those Xbox Ones becoming water coolers within the first weeks of sale.

stev69
stev69

I would say I stopped listening to analysts years ago because they are full of shit. but I never listened to them in the first place because they are full of shit.

DaddeyG
DaddeyG

The future of consoles is looking very dark, if things like this are allowed to happen what's next? 

TriggerManX97
TriggerManX97

@cuk2uk you do realize that for a game to become used it has to be bought brand new first, right?

TriggerManX97
TriggerManX97

@buffaloblitz85 I am 15 and I don't just buy the same rehashed game year after year, I have never bought a CoD game or assassin's creed game in my life and I think that annual releases of one game is bad for the game and the games industry, it kills innovation, anyway I won't outright boycott a publisher but if  I don't like a publisher (EA for example) I will go out of my way to buy the game used, even if it is a better deal to buy it new.

Ju-noh
Ju-noh

Microsoft still is to blame for their 24-hour time limit though.

Busta
Busta

@buffaloblitz85  Thare are plenty of worthwhile games out there that aren't put out by the major publishers.  

kane6911
kane6911

@berzerk0912 microsoft will still out sell sony because of age group that they are targeting. microsoft is not aiming at the juveniles who just want games they are after the grown adults with children who are looking for a system that can do an arraignment of things that they care about.    

buffaloblitz85
buffaloblitz85

@kcender08 LOL you really think a bunch of 15-25 year olds will boycott certain publishers because of blocking used games... These are the same people that buy constant rehashes of games. LOL

Gatman32
Gatman32

@rulo90 ....its up to the publishers, just like what Sony said.

stev69
stev69

@Shango4 Smart people: Screw you guys im off to play on my PC.

tmorri603
tmorri603

People do need to wait until MS's E3 press release. That is when they said that they will have some new IP's coming out. This talk about them not going to have games is childish because they didn't talk about much in terms of games at their press conference but Sony didn't either but you don't see nobody talking about them. Double standard anybody.

Gatman32
Gatman32

@macrules_640 ....Or people will be playing it because thats the system they wanted to buy since they can form their own opinion?

Nintyfan95
Nintyfan95

@DaddeyG They start randomly taking money from your account for no reason, saying they need it to improve Xbox Live or something. 

skittzo_s
skittzo_s

@DaddeyG Unfortunately (If we allow it) it will become the norm, and our kids and their kids will just take it without knowing better. While we sit them on our laps and tell them off a time when Consoles were great.

kane6911
kane6911

@Ju-noh  no their are not it makes since if you understood how this works. the system doesn't not have to online while playing the games to check the connection. you can still play offline all day everyday. it just needs to see if the internet via wifi or either net available.

jts1891
jts1891

@Busta @buffaloblitz85 This is silly, regardless. Publishers aren't some sort of Illuminati-esque cabal that sit around plotting and conspiring how to ruin gaming.

It's far more likely that they are waiting to watch and see. One publisher might try to move against used games, and the rest will watch and see how the average consumer reacts. If there is severe backlash, the remaining publishers won't touch it with a ten foot pole less they risk their profits. 

 And of course, all of them likely understand this, so I don't see -any- of them actually doing anything at all simply because of the risk involved. 

berzerk0912
berzerk0912

@kane6911 Also, how much did Microsoft paid you to say that bullsh!t since this is a brand new account (member since 6/11/13) the day after E3. With that poor grammar I betcha you're one of those hard to understand customer service reps from across the sea getting a little overtime. You can't fool anybody "we" gamers are NOT stupid. Nice try though.

berzerk0912
berzerk0912

@kane6911 Yeah right, in this economy with "grown adults" getting laid off left & right with "children". The first thing that always gets cut off is the internet to pay bills, and that Xbone will automatically turn into an Xbrick. Microsoft never thought about that one, huh? Now please keep it moving, I love my freedom.

buffaloblitz85
buffaloblitz85

@stev69 Sorry the National Spelling Bee was last week... We can do anagrams though here is one for you STFU

bunchanumbers
bunchanumbers

@stev69 @Shantmaster_K didn't you know? you misspell your words then you can get on feedbackula where you get mocked for misspelling and grammar in general.

Busta
Busta

@mjswooosh @Dangerous231  me either.  Then nothing of interest for the rest of the consoles life.

freedom01
freedom01 moderator

@skittzo_s @DaddeyG man I can just imagine it 60 years from now

Me: Back in my days games were in cartridges and disc, and we were able to lend it to people without having to pay a fee. 

Grandson: Really grandpa? but then why do we have to pay now? 

Me: Well, it all started when a company called Microsoft decided to charge people to pay on games that were not new and theirs. 

buffaloblitz85
buffaloblitz85

@jts1891 @Busta @buffaloblitz85 Actually they do talk to each other when ever money is at hand and when neither can hurt the other... like in this situation. All I'm saying is expect big publishers like EA and Activision to charge a fee for used games.

buffaloblitz85
buffaloblitz85

@stev69 Nice retort...LOL...this nasty 'sauce' could of been put on hold if you didn't criticize what was most likely a typo. And heaven forbid someone misspells a word, because I know you never have.   Defending My Compatriots Since 2009

mattress805
mattress805

Exactly. Just look at how many non-Kinect games Microsoft have actually published in the last two years...not many. .