updated 08:05 pm EST, Mon February 11, 2013
New technology in next-gen consoles may prohibit used game sale
On the heels of a Sony patent with the potential to block used games, and a report about the next generation Xbox having similar abilities, GameStop claims that such moves would alienate consumers towards the new devices. Citing surveys of its most active customers, the company believes that members of its PowerUp Rewards loyalty program would be less likely to purchase a console that limits trading in of games.
"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," GameStop Matt Hodges said in an email to Bloomberg. Hodges declined to provide specifics from the survey.
Over 75 percent of the company's 2012 sales were made by PowerUp members, with members spending five times as much as non-members. Gamestop relies on used sales for nearly half its profit. The company earned 27 percent of its revenue and 46 percent of its profit from used video game sales. The news of the potential block caused a six percent drop in GameStop's stock price, erasing its entire 2012 gain.
"We do not comment on rumors or speculation," Microsoft spokesman David Dennis said in response to a report disclosing the potential for a hardware block on used games. "We are always thinking about what is next for our platform, but we don't have anything further to share at this time."
Piper Jaffray analysts Michael Olson disputes the reports of the Sony patent and the "Durango" Microsoft Xbox iteration prohibiting use of used games. "We are confident that both the new PlayStation and the new Xbox will support used games," Olson wrote.