GameStop CEO Says Next Xbox Won't Block Used Games

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GameStop CEO Says Next Xbox Won't Block Used Games

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The CEO of GameStop predicts that Microsoft's next console won't block used game sales because the preowned market is too important to the health of the industry.

The rumor went up in January that Microsoft's next game console will feature some sort of "anti-used game" technology to help combat the grievous losses suffered by the videogame industry at the hands of people who like to help finance the purchase of new games by trading in their old ones. It struck me as kind of a crazy idea and it turns out that I'm not alone in that feeling, although GameStop CEO Paul Raines phrased it a little more gently, telling investors that it's "unlikely" to happen.

Implying that he's already spoken to Microsoft on the matter, he said that Microsoft and Sony both "have great relationships with us" and noted that used games sales "have a residual value."

"Remember that GameStop generates $1.2 billion of trade credits around the world with our used game model," he said. "So, consider taking used games out of that, you'd have to find new ways to sell the games."

Cowan & Company analyst Doug Creutz echoed Raines' position, dismissing suggestions that the new Xbox could be a disc-free console. "We believe a digital-only next-gen Xbox is unlikely given risks to both Microsoft's market share and the gaming ecosystem as a whole from any attempt to kill used games," he wrote in a research note. "However, we do believe that Microsoft may be targeting a cheaper physical solution in an effort to get the initial price of the box down and speed up new console adoption, which would be bullish for software publishers."

Source: Develop

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To be fair, Gamestop telling investors not to worry is pretty much required. Would you tell your company anything to the contrary, even if you believed it?

"The new XBox will include anti-used game protection, and we're all screwed, so sell your stock now."

Anyway, I thought this was crap, as it was when the PS3 was going to do it, and all the other nonsense rumours. Just saying, in context, this was what they had to say one way or the other.

You're the CEO of GameStop.

You're not the one actually MAKING it!

Why the fuck should we care what you have to say about it?

Andy Chalk:
The rumor went up in January that Microsoft's next game console will feature some sort of "anti-used game" technology to help combat the grievous losses suffered by the videogame industry at the hands of people who like to help finance the purchase of new games by trading in their old ones. It struck me as kind of a crazy idea and it turns out that I'm not alone in that feeling

A corporation using underhanded methods to obstruct a perceived threat to their profit margin sounds crazy to you?image
Prime Minister Mohammad Mosaddegh and Central America would like a word with you.

DVS BSTrD:
You're the CEO of GameStop.

You're not the one actually MAKING it!

Why the fuck should we care what you say about it?

Yes, a whole hell of a lot of ^this^

Seriously? why even bother saying it if its nothing more than a perdiction based on speculation.

In other completely unrelated news, the CEO of GameStop was seen shitting his pants and sweating profusely.

As much as I do love my digital games. Trying to kill the used market with a 'no-used game' console would be a bad idea in my opinion. The courts (in the US and many others) have upheld the consumers right to do with their product what they please, including selling the used copies and transferring their license along with it. Project 10 dollar and the like is a terrible system and I hope it dies off. You don't see the same complaining from the book sellers, music stores, and car dealerships. They know it's an important function in their business and it needs to stay around. Those industries have been around for much longer and they haven't died off because of used sales. The video game industry needs to adapt, not try to crush consumer rights.

I too think that Microsoft won't have an anti-used game system in its next console, do I get an article written about me, since both me and Mr.Gamestop CEO don't have a fucking clue what Microsoft will actually do since...ye know, we don't work in their development department?

DVS BSTrD:
You're the CEO of GameStop.

You're not the one actually MAKING it!

Why the fuck should we care what you have to say about it?

Cause Gamestop can refuse to stock it and the games for it. That'd put a huge dent in Microsofts sales.

RaikuFA:

DVS BSTrD:
You're the CEO of GameStop.

You're not the one actually MAKING it!

Why the fuck should we care what you have to say about it?

Cause Gamestop can refuse to stock it and the games for it. That'd put a huge dent in Microsofts sales.

So of course, IF the new X-box actually DID include "anti-used game" tech, they'd be SURE to tell GameStop wouldn't they?

Mouse_Crouse:
As much as I do love my digital games. Trying to kill the used market with a 'no-used game' console would be a bad idea in my opinion. The courts (in the US and many others) have upheld the consumers right to do with their product what they please, including selling the used copies and transferring their license along with it. Project 10 dollar and the like is a terrible system and I hope it dies off. You don't see the same complaining from the book sellers, music stores, and car dealerships. They know it's an important function in their business and it needs to stay around. Those industries have been around for much longer and they haven't died off because of used sales. The video game industry needs to adapt, not try to crush consumer rights.

How many highstreet book stores or music retailers buy back the products they sell? The car market is different in so far as the biggest deprecation in value of a car comes from when you buy it, you are literally losing 1000s in value when you drive it off the forecourt. The residual value in books is very low the only way to make a profit out of the average used book is to buy at round 98% less of the original price. Used CDs and DVDs have less deprecation but its still huge, making the buy back from the vendor uneconomic. Only used games have minimal deprecation over the first 6 months ie the used game is worth 95% of its retail price. So the other retail models have been around longer but have much higher deprecation than the games and thus cannot be used as model.

As to you statement about legal rights, I will direct you attention at steam. If the rights are as you stated, how come steam is a massive multi billion dollar retail system then? If its legal on PC why is going to be illegal on a console?

It is sensible.

Either Microsoft lets the online market diversify, or permits resale of physical media, or their sales are going to fall. Their current pricing monopoly for digital sales is ridiculous.

DVS BSTrD:

RaikuFA:

DVS BSTrD:
You're the CEO of GameStop.

You're not the one actually MAKING it!

Why the fuck should we care what you have to say about it?

Cause Gamestop can refuse to stock it and the games for it. That'd put a huge dent in Microsofts sales.

So of course, IF the new X-box actually DID include "anti-used game" tech, they'd be SURE to tell GameStop wouldn't they?

They'd find out sooner or later, but you are right about that last part.

VonKlaw:
Do I get an article written about me, since both me and Mr.Gamestop CEO don't have a fucking clue what Microsoft will actually do since...ye know, we don't work in their development department?

Depends. Are you the CEO of a multi-billion-dollar international corporation that specializes in selling videogame consoles and support hardware and thus have a well-established working relationship with Microsoft, Sony and Nintendo?

Because if not, the answer is no. Sorry.

This just in:

Your the CEO of gamestop. Not the designer or developer of the next Xbox. Stop talking.

Plus I remember seeing an article saying used games are what actually ruin single player games...I likes those asshole. I HATE YOU!!!

Duh. I will eat my own face if they actually (completely) block used games being playable. And then you'll have seen everything.

DVS BSTrD:

RaikuFA:

DVS BSTrD:
You're the CEO of GameStop.

You're not the one actually MAKING it!

Why the fuck should we care what you have to say about it?

Cause Gamestop can refuse to stock it and the games for it. That'd put a huge dent in Microsofts sales.

So of course, IF the new X-box actually DID include "anti-used game" tech, they'd be SURE to tell GameStop wouldn't they?

You're absolutely right: GameStop would sell the consoles for years, completely oblivious to it's limiting functionality. There is absolutely no way they'd be able to find out about it blocking used games from being played unless MS told them.

If consoles became digital download only then i just won't bother buying it. I buy few new games as most games are not worth buying new. The rest of this year the only games im looking forward to is AC3 and Prototype 2. A lot of games only last 8 hours....not worth 40 and i have zero interest in online gaming. Some of those are worth renting for 5 from Blockbusters.

I think digital download only will destroy the games business more than used gaming because alot of people buy new knowing they can resell it to buy there next game. If they cant resell it then it will make them more choosy about which games they buy full price.

Woodsey:
Duh. I will eat my own face if they actually (completely) block used games being playable. And then you'll have seen everything.

DVS BSTrD:

RaikuFA:

Cause Gamestop can refuse to stock it and the games for it. That'd put a huge dent in Microsofts sales.

So of course, IF the new X-box actually DID include "anti-used game" tech, they'd be SURE to tell GameStop wouldn't they?

You're absolutely right: GameStop would sell the consoles for years, completely oblivious to it's limiting functionality. There is absolutely no way they'd be able to find out about it blocking used games from being played unless MS told them.

They'll keep selling the consoles for years because people will still be BUYING them for years, weather they play used games or not.
Never underestimate the power of commercialism:

albino boo:

Only used games have minimal deprecation over the first 6 months ie the used game is worth 95% of its retail price. So the other retail models have been around longer but have much higher deprecation than the games and thus cannot be used as model.

Where are you getting this data from?

Maybe some of the AAA titles aren't depreciating all that much but the rest are. Fallout: New Vegas was 50% less than launch at 6 months, and that was arguably one of the better titles. Mass Effect 2 dropped like a rock in a similar time frame. And I've seen games that lose 70% in two weeks because no one buys it. And this is the new game's price.

We're talking about the amount you get for a game when you trade it in used because that is where the depreciation lies. Yes, a car loses thousands in value when you drive it off the lot but games lose a lot too. I have seen at most $40 dollars being paid (as trade-in never as cash) for a $60 game. Most of the time I see a new-release game within a week only getting $30 to $35 in trade-in because the early adopters got bored and decided not to keep the game around. Nowhere do I see $57 dollars being paid for a game that is $60 brand new.

SonOfVoorhees:

I think digital download only will destroy the games business more than used gaming because alot of people buy new knowing they can resell it to buy there next game. If they cant resell it then it will make them more choosy about which games they buy full price.

Finally. Someone else who gets this. All I would do is be sure I want a game forever before buying. And I would wait for a year and then look for bargains. And I would have had to play at a friend's house first (I don't trust demos since they themselves say its not representative of the final product).

Eh, I don't think MS really cares all that too much to be fairly honest. What's next? piracy related programs block on the next windows OS?

DVS BSTrD:
You're the CEO of GameStop.

You're not the one actually MAKING it!

Why the fuck should we care what you have to say about it?

Because he's the CEO of the single largest (by a wide margin) distributor of videogames?

DVS BSTrD:

Woodsey:
Duh. I will eat my own face if they actually (completely) block used games being playable. And then you'll have seen everything.

DVS BSTrD:
So of course, IF the new X-box actually DID include "anti-used game" tech, they'd be SURE to tell GameStop wouldn't they?

You're absolutely right: GameStop would sell the consoles for years, completely oblivious to it's limiting functionality. There is absolutely no way they'd be able to find out about it blocking used games from being played unless MS told them.

They'll keep selling the consoles for years because people will still be BUYING them for years, weather they play used games or not.
Never underestimate the power of commercialism:

You're not listening. If Gamestop can't sell used games for this thing, they won't make enough of a profit to be worth carrying it. So why would they keep selling it if they don't make any money on it?

I think it would be too harmful to console sales to block used sales considering how rampant they are. Theres also the complications of replacing a broken console invalidating your entire library. We have a right, upon buying a physical product, to said product and if we decide to re-sell it that is our decision. Anyone who thinks they have a right to come between that be they publisher, dev or manufacturer has another thing coming.

Foolproof:

DVS BSTrD:

Woodsey:
Duh. I will eat my own face if they actually (completely) block used games being playable. And then you'll have seen everything.

You're absolutely right: GameStop would sell the consoles for years, completely oblivious to it's limiting functionality. There is absolutely no way they'd be able to find out about it blocking used games from being played unless MS told them.

They'll keep selling the consoles for years because people will still be BUYING them for years, weather they play used games or not.
Never underestimate the power of commercialism:

You're not listening. If Gamestop can't sell used games for this thing, they won't make enough of a profit to be worth carrying it. So why would they keep selling it if they don't make any money on it?

Because then they have nothing to sell and stand to go out of business while the console is bought and sold at other retailers. It would be more harmful to gamestop but they do have power and I doubt microsoft want to see them go.

FoolKiller:

SonOfVoorhees:

I think digital download only will destroy the games business more than used gaming because alot of people buy new knowing they can resell it to buy there next game. If they cant resell it then it will make them more choosy about which games they buy full price.

Finally. Someone else who gets this. All I would do is be sure I want a game forever before buying. And I would wait for a year and then look for bargains. And I would have had to play at a friend's house first (I don't trust demos since they themselves say its not representative of the final product).

Game prices would fall and the market would become more competetive. Hell maybe streaming maybe the answer in which case consoles are meaningless. However with the savings in costs and ability to have definitive stats I think publishers will be pushing for this shift in the near future even without the elimination of used games.

Actually, as a selfish bastard I am, I hope new consoles won't have any sort of used-game protection or 100% digital model.
Why you ask? Well, publishers of course, who are more and more annoyed by the used market every year. Maybe it would lure them back to making decent PC games for a change, and we could live happily ever after.

One can dream...

VonKlaw:
I too think that Microsoft won't have an anti-used game system in its next console, do I get an article written about me, since both me and Mr.Gamestop CEO don't have a fucking clue what Microsoft will actually do since...ye know, we don't work in their development department?

Your article is on the Daily Mail and they're doing a one hour special on Fox News about you.

OT: I can't really see why GameStop thinks Microsoft values them. It's not like they are the only place where we can get games from. I don't buy used games, but I do not want see this anti used game system any more than those who do.

Frostbite3789:
In other completely unrelated news, the CEO of GameStop was seen shitting his pants and sweating profusely.

We all should be "shitting" our "pants and sweating profusely" at the possibility of the next generation of consoles blocking used games from being played on them.
Even more so at the possibility of the next generation of consoles being digital-download only.

Not everyone can afford to buy games new all the time.
Not everyone has high-speed internet.
Not everyone has their consoles connected to the internet.

It doesn't matter how much we may dislike GameStop, if this guy can use his influence to prevent a bad decision, that could result in damaging our already battered economy even more, from happening then we have to swallow our pride and support him.
Wither we like it, or not.

Sometimes a deal with the devil is the only deal that can be made.
It sucks, but it's the truth.

I still can't muster any enthusiasm or argument about the used market, seeing how I haven't had access to this mythical thing... ever.

Ok stop, everyone here raise their hand if you think Gamestop ends up making a net profit for Xbox? Factor in the loss of profit due to used sales, Microsoft aren't idiots so you know they've calculated this. Now factor in the amount of products Gamestop moves for Microsoft, which I'm sure Microsoft has calculated as well.

...No, Microsoft is not losing money from Gamestop, they are raking in huge amounts of cash. Now picture this partnership, Microsoft doesn't want Gamestop stop stocking their games and game system, Microsoft wants Gamestop to love them and continue in their profitable business venture, of course there won't be a block on used games and of course the heads at Microsoft has told this to the CEO/board of Gamestop.

FoolKiller:

albino boo:

Only used games have minimal deprecation over the first 6 months ie the used game is worth 95% of its retail price. So the other retail models have been around longer but have much higher deprecation than the games and thus cannot be used as model.

Where are you getting this data from?

Maybe some of the AAA titles aren't depreciating all that much but the rest are. Fallout: New Vegas was 50% less than launch at 6 months, and that was arguably one of the better titles. Mass Effect 2 dropped like a rock in a similar time frame. And I've seen games that lose 70% in two weeks because no one buys it. And this is the new game's price.

We're talking about the amount you get for a game when you trade it in used because that is where the depreciation lies. Yes, a car loses thousands in value when you drive it off the lot but games lose a lot too. I have seen at most $40 dollars being paid (as trade-in never as cash) for a $60 game. Most of the time I see a new-release game within a week only getting $30 to $35 in trade-in because the early adopters got bored and decided not to keep the game around. Nowhere do I see $57 dollars being paid for a game that is $60 brand new.

http://www.amazon.com/Fouls-Chronicles-Thomas-Covenant-Unbeliever/dp/0345348656/ref=sr_1_4?s=books&ie=UTF8&qid=1332537466&sr=1-4

Look at the price change 7.99 to 1 cent used, is the deprecation on games as extreme as that? Obviously not. So in the real world, guess what, used book are worth less than used games. How many books at 1 cent would you have to sell to make the same amount of money that they make at 7.99 price? 1000s at least. It costs more to have the book delivered than it does to buy.

SonOfVoorhees:
I think digital download only will destroy the games business more than used gaming because alot of people buy new knowing they can resell it to buy there next game. If they cant resell it then it will make them more choosy about which games they buy full price.

I fail to see the problem with this.

ablac:

Foolproof:

DVS BSTrD:
They'll keep selling the consoles for years because people will still be BUYING them for years, weather they play used games or not.
Never underestimate the power of commercialism:

You're not listening. If Gamestop can't sell used games for this thing, they won't make enough of a profit to be worth carrying it. So why would they keep selling it if they don't make any money on it?

Because then they have nothing to sell and stand to go out of business while the console is bought and sold at other retailers. It would be more harmful to gamestop but they do have power and I doubt microsoft want to see them go.

Because as we all know, Sony and Nintendo don't exist.

I like how the general consensus is "herp derp he doesn't know wtf he's talkin about!" All he's done is state the obvious. The same thing anyone with a brain could conclude the last time these threads popped up.

Attempting to destroy the used games market when you have competitors (and not just console competitors, digital distribution like Steam, who sell new games at discounted prices) who will use that against you is suicide. Microsoft is NOT that dumb, despite any personal opinion of them/their hardware/their fanbase.

You don't have to be actively working on the console to see that.

Mouse_Crouse:
As much as I do love my digital games. Trying to kill the used market with a 'no-used game' console would be a bad idea in my opinion. The courts (in the US and many others) have upheld the consumers right to do with their product what they please, including selling the used copies and transferring their license along with it. Project 10 dollar and the like is a terrible system and I hope it dies off. You don't see the same complaining from the book sellers, music stores, and car dealerships. They know it's an important function in their business and it needs to stay around. Those industries have been around for much longer and they haven't died off because of used sales. The video game industry needs to adapt, not try to crush consumer rights.

Most definitely. I'm so tired of the high-ups in the video game industry being so freaking entitled. No one else whines and throws a hissy-fit when someone sells their product after they used it. You don't see Ford/Chevrolet/Toyota bitching about used car sales.

Off-Topic, I totally forgot that this wasn't reddit and tried to give you an upvote.

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