Will Next-Gen Consoles Block Used Games?

Industry analysts sound off on the possibility of Microsoft, Sony, and Nintendo implementing measures with new systems to curb the secondhand market.

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Rumors of a next-generation console that blocks used games have been swirling for months now, with reports suggesting industry heavyweights Microsoft and Sony will implement such measures in their future-generation consoles. For now, these are unsubstantiated rumors. But could they become reality? Could the PlayStation 4 or the Xbox 720 boast features that will stamp out used games?

Would you support a next-gen console that blocks used games?

To answer that question, GameSpot sought the counsel of several industry analysts from a range of professional firms, whose job it is to make educated and reasoned prognostications about the future of electronic entertainment. Uniformly, these individuals said a next-gen console with such a system would be unlikely.

Now that the analysts have weighed in, what do you think? Let us know in the comments section below!

Michael Pachter - Wedbush Securities

"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."

"Yes, silly rumor that has been blown out of proportion" -- Pachter.

"There is some potential that the consoles will ALLOW PUBLISHERS to sell discs as licenses, and require a code. That would make the publisher the bad guy, and games published by whichever publisher chose to require a code would not be able to be re-sold. I think that has a meaningful chance of happening, but don't think that there is a groundswell movement to have all games converted to a license format (similar to Windows and Office software). I think that one publisher commented to a gaming website that they thought the consoles would allow this, and the uninformed game journalist ran with it as if the console manufacturers would block used games."

"Yes, silly rumor that has been blown out of proportion."

Colin Sebastian - Robert W. Baird & Co

"I think it's very unlikely since that would be a perfect opening for a competing platform to gain an edge with core gamers. In addition, the console holders need retail to sell their hardware. Much more likely is that both digital and physical copies of games will be sold and disks can be traded. By the way, these same rumors always surface before console launches, and they are always wrong."

Doug Creutz - Cowen & Company

"One rumor that has been reported in the press is that the new Xbox may not contain a disc drive. This has been interpreted as potentially suggesting that all games would be download-only; tangentially, this would appear to be a major threat against the used game market."

"However, the notion of a digital-only console seems unlikely to us, for a few reasons. First, successfully eliminating the used game market would severely impact GameStop's business model, potentially putting the company out of business altogether. We believe that, on the whole, the console manufacturers and software publishers view GameStop as a valuable and important part of the video game ecosystem, despite some of their issues with used game sales. Second, and probably more importantly, we believe it would be incredibly risky for Microsoft to take away gamers' access to the used game market given the potential for Sony not to follow suit. If Sony retained physical media while Microsoft did not, we believe Microsoft would risk giving up all of their hard-won share gains during this cycle, and then some. Given that Microsoft's overall objective is to control the distribution of content through the living room, rather than maximizing margins on the next Halo title, we doubt the company would take on this risk."

"However, we do think that there is possibility that Microsoft could be targeting a cheaper physical media solution, potentially one which includes both physical and digital distribution components. With cloud storage, we can also envision Microsoft shipping its next console with a very modest hard drive, or potentially even no hard drive at all. Given the potential to minimize or eliminate these two components, and our belief that the increase in console processing power this cycle will not be as great a leap as in previous cycles, we believe it is possible that Microsoft's strategy is to release a new console at a much lower price point than the $400-plus level that characterized initial pricing for the last console cycle (Wii excepted). This could lead to far faster consumer adoption of the new consoles; if Microsoft additionally releases its new console a year ahead of Sony, it might be able to build a formidable market share lead before Sony even gets out of the gate (and force Sony to price its hardware more cheaply as well). We think this scenario would be highly bullish for the software publishers, as more rapid new-generation console adoption would mean a shorter period of console transition disruption to software sales."

Arvind Bhatia - Sterne Agee

"We believe blocking used games would cause a consumer backlash. That is why despite the fact technology to block used game already exists, Microsoft and Sony are unlikely to take a stance that is unfriendly to consumers. Also, GameStop, which is obviously the leader in used games, remains a critical partner for the console companies. It has 25 percent to 30 percent market share in the Xbox 360 and PS3 new software markets and often in the initial weeks of a new game launch garners 50 percent type market share. This is another reason the console companies' actions are unlikely to be harsh. Ultimately, the console companies will continue to aggressively push DLC as a way to prolong the life of their games and slow down sales of used. Interestingly, Nintendo has not complained much about used games being a factor. Do you know why? We think it's because customers who buy Nintendo games often play them for years i.e., they don't sell them used for quite a long time."

The next PlayStation isn't likely to block used games, say analysts.

Jesse Divnich - Electronic Entertainment Design and Research (EEDAR)

"EEDAR has analyzed numerous studies on the impact of used game sales on the overall physical ecosystem. All the results to date have been inconclusive."

"I certainly understand the frustrations of console manufacturers, publishers, and developers that are not able to benefit from the used business model. On the same hand, I understand the benefit used games brings to retailers and consumers."

"EEDAR has analyzed numerous studies on the impact of used game sales on the overall physical ecosystem. All the results to date have been inconclusive" -- Divnich

"The next generation of consoles are likely to be more capable of combating used sales than the current hardware; however, it will come down to the publishers on whether they want to utilize the new technology to either block or monetize used game sales. Of course, publishers are far more likely to monetize the used consumer rather than blocking them altogether."

"EEDAR takes this subject very seriously and we have dedicated a lot of resources in attempt to conclude, one way or the other, the overall impact of the used business model."

"There is one conclusion our studies have indicated. Overall engagement and awareness levels of home console games are directly linked to the total amount of time spent playing video games. When fewer home console games are played, the market, as a whole, becomes more lethargic. When a consumer becomes inactive, it requires more energy (better games, new technologies, marketing, etc.) to reengage that consumer."

"In the case of used games, it can be argued that a consumer who may not be contributing to new game sales, but is still playing through used purchases, is still contributing to higher engagement and awareness levels of the home console market."

"The best example is a consumer who buys Borderlands used. Even though they are not contributing to the publisher or the developer, their engagement of the game is advertised to all their friends (whether through friends list or word of mouth), which increases overall awareness and could encourage a friend to purchase a new copy of Borderlands in order to play co-op online."

Discussion

467 comments
pwc2
pwc2

Even if I could buy new games all the time, they will end up collecting dust after a while, due to various reasons  How many people have bought a game, and found out that they didn't like it, because demos do not always give a game justice. I'm not a tree hugger, but it's wasteful of money and eventually space if you can't plat used games, much less backwards compatible games. BTW, I really feel ripped off when I download a game, and the game looses it's touch.

BARRICADE_28
BARRICADE_28

If MS and Sony ban used games, I will hack/mod my console, and if I'm unable to do that I will simply not buy any of the new consoles and switch to PC gaming.  I don't have the money to a) buy games at $50-$60 a pop & b) not get any money back by selling those games used on eBay/Kijiji. 

joujou264
joujou264

Developers, producers and publishers, should realize that consumers aren't ATM's. If they are going to ban used games (Which I highly doubt.), they have to expect a huge decrease in gamers. That would hurt MS in particular, since they still get money from used games, by the person using the used game online, for which they have to pay. And there would be no reason to pay for online, if you can't afford games to play online.

joujou264
joujou264

Well, Nintendo definitely won't do that. So if MS/Sony would that (Which they would be INCREDIBLY stupid to do.), then Nintendo could get a hold on the next gen with their Wii U console. I'm just sayin', MS/Sony, don't do it, it will do more bad, than good to you.

o0MaSTa0o
o0MaSTa0o

Why stop with used games? I say we should put a stop to the used car industry as well!

elchiquilin
elchiquilin

I would support this only if games took a considerable price drop, say 40 per game, and if they eliminated on disc dlc.

I love dlc that's way big like gear's single player campaign expansions, not with dlc like horse armor, those imo should be unlockables a la ps2/gc/xbox era.

 

I remember being able to afford 3 great games (grant you, not the newest ones) last gen for $60. Games seem to only grow way more expensive. And if they do also go all digital, steam is a way too awesome model to follow

thrasher1991
thrasher1991

they can´t ban used games! otherwise how will they get their 10 euros/dollars for online gaming on used games??? outrageous!... cough battlefield 3 cough u cost me 5 bucks less and i had to pay for u more cough cough... bastards...

quinnray19
quinnray19

If publishers understand the gaming market, they would know that such a move would be detrimental to gaming. The main reason would be the fact that most gamers borrow and trade old games/new-games with a friend or the stores that offer such deals to get newer games at a bargain prices. Publishers stopping this would mean games staying on shelves longer, hence removing their quick profits over a short period......just my opinion.

 

FirePhantom97
FirePhantom97

I don't like buying used games anyway, I feel cheap.

Uchiha_Sasuke1
Uchiha_Sasuke1

So all these talk about banning used games are false.  That would be good news for us who buy used games just to get  some percent off.

GrgSpunk
GrgSpunk

Looking at all these user-created comments, it's clearly obvious that most people who came to this page haven't even bothered to read the article itself.

jonzilla_basic
jonzilla_basic

Here is the problem. If they take out the Used game market will the price of Games which are already WAAAY Over priced come down? I doubt it. So it will be a lose lose situation for us gamers. 

 

Just this week I decided that I would give Borderlands a go. I went to Gamestop and Purchased a new copy of Borderlands GOTY edition I also purchased a new copy of the Ultimate Edition of Fall Out Vegas. I liked Borderlands allot that I went back to Gamestop and got a used copy for my son. 

 

I have no problems with New or Used games ONLY if the game is properly priced. How about New games have a price of 39.99? Game Devs Screw us with DLC anyways????

EmericaCky2K
EmericaCky2K

@ BlackBaldwin

 

 You are a poor speller.

BlackBaldwin
BlackBaldwin

I don't care if they decide to develop a console that cancels out used games in all honestly Ill just either move to use my funds for pc gaming or just quit the gaming sceen completely and most likely I won't be the only gamer to do so.  The end product is pretty simple the only people they are gonna hurt is themselfs..

Trickymaster
Trickymaster

All this will do is cause a boom in console modding. Everybody will pick up a console from the store just to send it straight to the modders so that it can run used games which have been legally bought. Sony and Microsoft are shooting themselves in the foot if they plan to ban used games.

Petnos
Petnos

I swear to god, the more they try to put limitations like this on their product the more reason people have to hack their consoles.

Like geojf3 said; we never had this problem with pong. Where is the game industry going? The games get better and better, but at what cost?

Making games should be left to those who want to make games, not make money.

otanikun
otanikun

If they do they'd better prepare for a huge backlash, but who's to say people won't find ways to circumvent such unwanted features in the first place?

 

Besides with video games like Modern Warfare raking in millions upon millions of dollars, I only see the developers laughing all the way to the bank, not weeping into their morning coffee because used game sales aren't giving them more money.

voldalin
voldalin

@pallyallydin do you honestly think a developer is going to ask gamestop for a lowsy percentage?

pallyallydin
pallyallydin

Used game are vital for the gamer economy. With out used games many retailers like gamestop would take a major cut. There would be downsizing and less jobs out there, as well as less consumer capitol for buying games. Not to mention many gamers would not be able to afford to buy the games they want. This would further drop sales. If anything thing, the developers should seek a solution with the retailers. Perhaps a small percentage of the used game sales should be passed on to the hard working developers. Adding a separate licensing purchase would further complicate things for the consumer. Always make it easy for the consumer to buy!

geojf3
geojf3

Case in point:  I have never played the Max Payne series.  Recently, I was looking to get the first game for my xBox 360.  I saw online that Gamestop has it listed for $4.99 and Amazon has it available for $9.99.  Should the publishers get a piece of this in some way?  Either by charging the reseller or by making the purchaser pay a licensing fee?  Since they could not realistically keep track of what store has what used game, the fee would make more sense.

 

A few times buying a car has been compared to this item.  If you buy a car you can do what you want with it.  But we really do not buy the game as in the case of the car, just the license to use the software.  The same way we buy the license when we purchase an operating system.  Legally, we cannot use the operating system and then sell the media (Windows anyway, I do not know about the others).  We also buy the license for movies on DVD's and music CD's and MP3's.  I do not see the movie industry saying I cannot sell my store purchased DVD of Gone With The Wind for $0.50 at my garage sale or on eBay.  But the music industry sure does have a problem if I allow someone to copy my CD's or MP3's.

 

If they go the fee amount and we have to pay the reseller for the media and then pay the publisher a fee (probably when we first load the game and go online) what is stop me from borrowing my friends disc, load it on my machine, pay the fee and use it?  If my friend wants it back, they just take it and play on their machine until I want to borrow it again.

 

There will never be a right or wrong way for this.  Every way has its drawbacks.  The sober fact will probably be the publishers making sure they scrounge up what ever they can, then the reseller scheming to make sure they still get their revenue with the result in us paying probably a little to much for a used game and jumping through hoops in the process.

 

Never had this problem with Pong.

dogpigfish
dogpigfish

I think places like Gamestop increases sales by advertising and collecting unsure gamers, while giving new life to older games that otherwise would be forgotten.  I also think preowned sales builds hype and increases the release sales, regardless of where people buy the game.  I have a feeling if this goes away it may detract the casual gamer.  As a casual gamer I would have never pre-ordered any games if it weren't for promotional trade in.  I think it pays for itself and developers are dipping their hand in a cookie jar that they will find sorely empty.  

voldalin
voldalin

Regardless of consoles doing this and it effecting their sales, I think the sales will still be effected anyway. It takes years for developers to wrap their heads around a new piece of gaming hardware. The games we see on the next-gen consoles aren't going to be a huge leap from what we are seeing now. It might take a while for people to justify spending more money on a new console. Maybe years.

ClaudiusCaesar
ClaudiusCaesar

The console will not block used games. They will allow publishers/developers to do so. Some games will allow be played used, others will block completely. But I bet most will allow a trial (like the 1 hour PSN+ Trials) with purchase for the whole game.

BIOJECT
BIOJECT

If they block used game sales they will only fuel the piracy industry even more.  If they want to capture the used sales market, provide reasonable insentives like game discounts.  Steam already does it.  In fact I grabbed Batman Arkham City because it was on sale for $15 bucks over steam.  Aside from steam, I don't really see many other companies offer similar sales.

jimmymoo
jimmymoo

 @voldalin  it has nothing to do with being blind! The fact of the matter is people on here cant belive the lengths they will go to to stop piracy.even if it affects the honest buyer/trader. also alot of sellers such as game depend on trading games for cash or credit to survive in todays economic climate. i also understand the companies point of view it would also stop game studios from going out of business.

jimmymoo
jimmymoo

 @kinetyqq i agree, if this rumor turns out to be true i`d not bother with a console ever again! Sony and microsoft are becoming too greedy in this line of business trying to control everything.do they really think this type of strategy  will stop piracy? There will always be hackers who dont intend to copy games for mass production to make money but just to hack the system to prove they can do it! Nowadays its all about online gaming, so why dont microsoft continue with the banning of online players who have flashed drives or are using copied games and why doesnt sony follow suit?  

spgice
spgice

they might lose money 

kinetyqq
kinetyqq

if so..i'd switch to pc platform.

voldalin
voldalin

I honestly think they really want to and would be suprised if they didn't. I think they have the ability to do so and if passed on it now would possibly be a long time before they get a golden opportunity like this. If you can't see this change coming then your blind.

Scholar_Of_Time
Scholar_Of_Time

Well; I respect the whole intent but even if this is does take effect; sooner or later the hackers' intentions widen as they WILL attempt or succeed at hacking the new console...

 

I could really care less about the people disagreeing to this soon-to-be statement, but the big game industries should stop pretending that the hackers aren't going to do anything about it...and in the end, they still (kind of) win...Pyrrhic or not, it still succeeds.

 

The BEST hypothetical solution  to this problem is to reward the legitimate buyer something for staying in the right side of the track (Just small and cute freebies like extra DLC points for entering a legit CD-key) ; not saying if its going to work but it sure has potential. Besides, what will they get for flipping the bird at the usual customer or punishing them with cold-hearted hardware?? The conversation rages on...so until there's an outcome or any form of news...I shall wait silently..

remrem4
remrem4

$60 for game that is resalable or $30 for non-resale game version download only.

zenstrata
zenstrata

The used game market is a GOOD thing for game developers.  What do you think happens to the money a gamer recieves from selling their new game on the used market?  They use that money to buy another new game.

 

Also having older used games for reduced prices helps improve developer and franchise recognition.  It basically gives developers a free form of advertising which can help them sell their New games.  For example, if a gamer purchases a game used and enjoys it, then they are more likely to search out more games by that particular developer or franchise in the future.

 

On top of that there is a very large segment of the population who simply can not pay full price for games.  When these people go out and purchase a game from the used market, they are injecting money which would otherwise not exist into the New game market.

 

By taking these asanine steps to eliminate the used game market, developers are shooting themselves in the foot.  They are also alienating their customers through increasingly restrictive requirements and in some cases driving them away entirely.  I have practically given up buying games due to measures like this.  Years ago I used to stop by the store once a week and purchase one or two new games.  These days I mostly just read books on my offtime.  I refuse to pay money to a system which abuses its customers like so many developers are starting to do.

megakick
megakick

If used games are blocked publisher's will be happy making money and having time to make better games. Lamestop would be sad, OUT OF BUSINESS.

 

LOL at huge amounts of money? Lamestop is making a huge amount of money not the publishers.

ecurl143
ecurl143

Pretty sure these rumours have a kernel of truth to them initially.

Throw the idea out there for the hell of it and let the info propagate out and get some indirect feedback about the idea without any official source - it's a great idea because the companies can do a massive U-Turn and say it was all rubbish right from the start.

Gotta love free market research.

THFCspurs1
THFCspurs1

I don't think they would do this, they would lose out big time. Besides game developers/publishers and console creators are making huge ammounts of money already. The video game indusstry is one of the biggest in the world, they get plenty of revenue as it is. If this ban came into effect they would see their revenue fall, guaranteed!

bob_loblaw81
bob_loblaw81

first console to do this will have a flood of developers, at first, but the drop in sales of the console to the hardcore gamers will catch up and this idea will die a slow and agonising death. Resulting in another games confidence crash and a hugh switch to pc gaming form the hardcore gamers (who are the only ppl buying games witht their wages and not their pocket money)

 

Time to buy shares in Valve :)

 

Hardstyler2012
Hardstyler2012

well if they do, i won't buy, simple as that really!

kex72
kex72

Damn, Love hurts.

nathaliek
nathaliek

I hope not. I think it would be incredibly stupid if they were to not allow used games/make consoles download only. Many times when I am new to a series, I buy an old cheap used copy of the first game in the series at gamestop or on amazon, just to see if I would like the series. I don't want to blow $60 to try a game and not like it. But once I am hooked on the series (like with the Mass Effect games), I buy the new releases at full price. Getting rid of used games would stop me from doing so, and in the end they are loosing a potential customer. 

CaoSong
CaoSong

Lol they think barring consoles from playing used games would get rid of used games being sold... when in reality it would just push more people into modding their consoles to play pirated games, or push them into PC gaming... they'll end up losing far more money by doing this then just asking people not to play used games.... not to mention, just like with PC games, a keygen will be made for Console games eventually anyway... sure they wont be able to play online, but as PC game developers know, that limit doesn't stop everybody.

Johnny-n-Roger
Johnny-n-Roger

@Voldalin  

 

Actually it would be nothing like cars because of the concept of intellectual property.  A dispute between a publisher and a retailer is not the same as a dispute between a retailer and another retailer.  The last one doesn't sound practical in any scenario.

 

@JoJoStarFire  

 

Most games are lucky to sell a million, including every region.  In any case, the argument isn't that used games are putting them out of business.  They are implying that they aren't making as much money as they should be.  This is subjective, but it only serves to make them look greedy in an industry that brings in billions of dollars every year. 

 

 

I honestly don't think publisher's would have the nerve to implement such a system.  Instead they'll continue to nickel and dime us for online passes and scheduled DLC.  Gamers lose in either case, given a situation where you have to pay $10 to access the full game you've already paid more than you would have buying it new.

voldalin
voldalin

It would be like toyota banning every used car dealer for selling used cars. Or wal-mart taking out a law suit against kmart for selling the crap. Or every major bank going out of business because the government actually shut down all drug trafficing  But really, who cares.

JoJoStarFire
JoJoStarFire

Really! used games ruining revenue... not likely. There are Billions of people buy their games at $60 a pop, and they are whining about loosing revenue. Multiply 60 times a million or a billion, and that's not counting the united states. Losing revenue over used games, people must be stupid to believe that crap. As much as I love gaming, I won't be getting them. 360 and PS3 will be my last consoles. Let them kill the industry, that will be their downfall. Just let them try it. Go ahead, be that stupid.

steve216
steve216

I'm all for it, lets get rid of the peasants in our gaming communities.

fightingfish18
fightingfish18

 @jonzilla_basic I've believed that most games are only worth $40 for a long time now.  I felt that ps2 games at $50 were fair priced, but most ps3/360 games aren't worth a cent over $40

Zignoff
Zignoff

@ClaudiusCaesar  The problem is 1 hour trails, really don't give a good idea o the game, for some games one hour barely scratches the surface of some games... though in most games now a days  that's HALF the game, I think a more rental service similar to that of red box. I'd say maybe 2 bucks for a 24 hour rental of when you first play the game. Im sure some would say,  Well that's enough time to beat the game and not get it.

My point exactly it would mean that companies would have to actually make a game with freaking CONTENT and DEPTH, and make them longer then 4 hours if they want to see a damn profit they deserve.

izy521
izy521

 @BIOJECT My sentiments exactly, blocking used games will only hurt the people who actually pay for games, and may even cause them to resort to piracy or just stumble upon it. Pirates will develop an ISO loader, and then what? Start pirating games, using HDDs/Flash drives or any other storage medium.Kid A will want to play his game at Kid B's house, unfortunately he cannot use his game on any other console.Kid C is able to mod and install an ISO loader on Kid B's and Kid A's system. After the bypass of the block, Kid A and Kid B will then realize they have the ability to get any game free of charge, piracy grows. 

Zignoff
Zignoff

@voldalin  Whose the more blind one here though?  The person who doesn't supposedly see this "golden opportunity" or the company who doesn't see the obvious train wreck coming from this choice?

ClaudiusCaesar
ClaudiusCaesar

@Zignoff Who would be crazy enough to risk his/her money with "would have to actually make a game with freaking CONTENT and DEPTH, and make them longer then 4 hours if they want to see a damn profit they deserve." Would you risk millions on that?