Sony Patent Hammers GameStop Share Price

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Sony Patent Hammers GameStop Share Price

image

Speculation about Sony's effort to put the kibosh on the used games market has taken a toll on GameStop.

The internet worked itself up into a pretty good lather yesterday in the wake of news that Sony had filed a patent on technology that would prevent games from working in any console but the original buyer's. The obvious use of such technology would be to close the door on the pre-owned market, but while Sony hasn't indicated whether it will actually use the tech in the next PlayStation, the widely held assumption seems to be that it wouldn't clear leather if it wasn't going to pull the trigger.

Either way, speculation about the potential impact on the used game market caused GameStop's share price to tumble by $1.67 over a single day, from a high of $25.67 to a low of $24.00 on January 3. The share price has since climbed back to over the $25.00 mark, but the sharp drop illustrates GameStop's heavy dependence on the pre-owned market. The retail videogame industry may be a dying beast anyway but the elimination of used games would sound an almost immediate death knell for the company.

Not that it's very likely to happen, according to analysts including Michael Pachter. "Sony is on record as saying that it has no desire to limit consumer choice," he said in an investors note. "Our more rational view is that Sony intends to put the ID matching technology into its consoles to provide individual publishers with the ability to block the playing of used games. The news has negatively impacted GameStop shares, and we think the reaction is overblown."

Source: GamesIndustry

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Oh, well as long as it's the publishers who decide whether or not used game sales are possible. Since publishers are generally known for their benevolent approach towards their customers and purchasers of used games specifically, I can take heart in knowing that this power is in the hands of people who will make nothing but good choices.

Sony's shares dropped a bit too.
What I'm still not sure about is if it would completely halt anything but a demo play on the disc or is this their way of making the online pass thing a standard "feature?"
Either way, it seems that Sony's R&D would better use their resources to make a console that works well and is supported well rather than to squeeze a few more pennies out of a consumer base that can't/wont spend a lot.

Why give this power to publishers at all? mean if Microsoft goes through with their "pay-per-viewer" patent then I will never stream video on the XBox720, but if Sony goes through with this then I am never buying a PS4 (maybe if they drop the price of games from $60 to like $40, but even then it would only give me pause for subtle thought)

With all the talk you hear from companies like EA, Activision, and Ubisoft over how much used game sales hurt their business you really can't blame anyone for feeling like they may use this patent. Of course you're going to get some PR reps that will claim "We don't want to hurt consumers or consumer choice" when they could really just be saying that to cover up their real intentions. The video game industry is not a friend to the consumer and in my eyes hardly ever has been. They only give people what they want if they feel they can profit from it.

Just you watch, the only reason that you'll hear any video game publisher defend used sales is to look good in the eyes of consumers. If the technology falls through and companies like Sony don't employ it in their consoles it's because they may realize it would do more harm than good to their profits. To those morons who said that "Project 10 dollar wasn't enough" they can go eat pig excrement.

GonzoGamer:
Sony's shares dropped a bit too.
What I'm still not sure about is if it would completely halt anything but a demo play on the disc or is this their way of making the online pass thing a standard "feature?"
Either way, it seems that Sony's R&D would better use their resources to make a console that works well and is supported well rather than to squeeze a few more pennies out of a consumer base that can't/wont spend a lot.

in comparison between this and the online pass: the online pass is an additional $10 whenever you buy a used game that requires one, this is saying that you essentially only buy the game used "as a demo" otherwise it will lock the game out.

we are also not talking about squeezing pennies we are talking about squeezing the full retail price. technically with this system in place the depreciation rate of video games would diminish to non-existent, or extremely lower. because by having a used version of the same thing next to/near the new thing actually causes the value of that new thing to depreciate instantly (why should I pay $60 for something when I can pay $55 for the same thing just used). with this in place that used copy does not exist so game prices need not go down as much over the lifetime that the game is on the market. not to mention when a store needs more copies they "must" purchase them from the distributor.

then on top of all that those people who depend on trade-in value to purchase new games will basically be unable to purchase them.

Didn't we have the same thing right before the release of the PS3?

Andy Chalk:

Not that it's very likely to happen, according to analysts including Michael Pachter-

stopped reading there.

Anyway. All this makes me wonder just what exactly Sony is going to do with that patent. Now I'm with the many others that say Sony can't possibly be stupid enough to use this tech on their new PS4 (even as an exaggerated statement meant to passive-aggressively convey how much I hate Sony as a company). But what'll they do with it then? Nothing? Is this just patent-whoring?

Still, the share prices dropping for Gamestop is surprising. It seems like pretty much an immediate panic reaction to tthis nebulous announcement.

Get me a Seam-style digital storefront, continue to provide the capacity/capability to store games on my hard drive, and offer reasonable sale prices (again, ala Steam) and I wouldn't lose any sleep over my inability to sell/buy used games.

'Course, at the rate Steam seems to be moving towards a living room approach I may not need to worry about what Microsoft or Sony decide to do.

Not that it's very likely to happen, according to analysts including Michael Pachter. "Sony is on record as saying that it has no desire to limit consumer choice," he said in an investors note. "Our more rational view is that Sony intends to put the ID matching technology into its consoles to provide individual publishers with the ability to block the playing of used games. The news has negatively impacted GameStop shares, and we think the reaction is overblown."

So sony doesn't want to "limit the customer choice", it only wants to give individual publishers means to limit it?
This either makes 0 sense or has been quote-butchered to oblivion.

Sony what means more to you?
The millions in sales you WON'T lose because people who buy used would most likely never purchase the game at all?
OR the millions you WILL lose by alienating your customers?

If only customers could buy games in some form that can't be resold possibly some sort of "download" formate. And they use the money they save cutting out retailers and the cost of packaging to make the games cheaper so more people would buy their games and not have a reason to buy used games altogether. Too bad technology like this must be decades away before it could be put onto a console

PoolCleaningRobot:
If only customers could buy games in some form that can't be resold possibly some sort of "download" formate. And they use the money they save cutting out retailers and the cost of packaging to make the games cheaper so more people would buy their games and not have a reason to buy used games altogether.

Except when the price of those download games doesn't actually go down, because game companies complain that the price of games is too high, but think the games their company in particular makes/ publishes are the only games to justify the high price tag. Download games on consoles very rarely drop in price, if at all.

Eclipse Dragon:

PoolCleaningRobot:
If only customers could buy games in some form that can't be resold possibly some sort of "download" formate. And they use the money they save cutting out retailers and the cost of packaging to make the games cheaper so more people would buy their games and not have a reason to buy used games altogether.

Except when the price of those download games doesn't actually go down, because game companies complain that the price of games is too high, but think the games their company in particular makes/ publishes are the only games to justify the high price tag. Download games on consoles very rarely drop in price, if at all.

Yup EA origin taught me that once publishers get their digital dream the prices wont change and all they succeeded to do is get less people playing games. Yay for them!

All sarcasm aside if sony impliments this system in any way I will save money....by not buying a Ps4

GAunderrated:

Eclipse Dragon:

PoolCleaningRobot:
If only customers could buy games in some form that can't be resold possibly some sort of "download" formate. And they use the money they save cutting out retailers and the cost of packaging to make the games cheaper so more people would buy their games and not have a reason to buy used games altogether.

Except when the price of those download games doesn't actually go down, because game companies complain that the price of games is too high, but think the games their company in particular makes/ publishes are the only games to justify the high price tag. Download games on consoles very rarely drop in price, if at all.

Yup EA origin taught me that once publishers get their digital dream the prices wont change and all they succeeded to do is get less people playing games. Yay for them!

All sarcasm aside if sony impliments this system in any way I will save money....by not buying a Ps4

Yeah, that was my point. Logically, download games should cost $40 or something maybe $50 which would easily make them compete with the price of used games but publishers are too afraid that will cause video games to drop in value

GAunderrated:

Eclipse Dragon:

PoolCleaningRobot:
If only customers could buy games in some form that can't be resold possibly some sort of "download" formate. And they use the money they save cutting out retailers and the cost of packaging to make the games cheaper so more people would buy their games and not have a reason to buy used games altogether.

Except when the price of those download games doesn't actually go down, because game companies complain that the price of games is too high, but think the games their company in particular makes/ publishes are the only games to justify the high price tag. Download games on consoles very rarely drop in price, if at all.

Yup EA origin taught me that once publishers get their digital dream the prices wont change and all they succeeded to do is get less people playing games. Yay for them!

All sarcasm aside if sony impliments this system in any way I will save money....by not buying a Ps4

I love Sony consoles, I loved my PS1 and the PS2 is my all time favorite console ever. I even bought the PS3 at the high price point (because I knew the backwards compatibility was going out the window), but if things get much worse, even I might just skip out on the PS4 (and Xbox 720) in favor of a solid PC and Steam.

PoolCleaningRobot:

Yeah, that was my point. Logically, download games should cost $40 or something maybe $50 which would easily make them compete with the price of used games but publishers are too afraid that will cause video games to drop in value

I don't think that's what publishers are afraid of, I think they're just greedy honestly. Publishers won't lower the price of games when they know they can get a minimum of $60, make those $60 games, download only and they don't even need to pay for packaging. It's only when people refuse to buy games at those price tags that game companies rethink the price.

Tohuvabohu:

Andy Chalk:

Not that it's very likely to happen, according to analysts including Michael Pachter-

stopped reading there.

Still, the share prices dropping for Gamestop is surprising. It seems like pretty much an immediate panic reaction to tthis nebulous announcement.

Indeed, any news article fleshed out with the views of Michael Pachter can be skipped over safe in the knowledge that his info can be gained from the news itself as its bleedin obvious.

I foresee Pachter predicting that Take Twos share price will rise upon the release of GTA5 and the next COD will sell a large amount of copies

This also quite nicely outlines that the entire monetary system hangs on the balance of people freaking the fuck out, very solid system that.

Eclipse Dragon:

GAunderrated:

Eclipse Dragon:

Except when the price of those download games doesn't actually go down, because game companies complain that the price of games is too high, but think the games their company in particular makes/ publishes are the only games to justify the high price tag. Download games on consoles very rarely drop in price, if at all.

Yup EA origin taught me that once publishers get their digital dream the prices wont change and all they succeeded to do is get less people playing games. Yay for them!

All sarcasm aside if sony impliments this system in any way I will save money....by not buying a Ps4

I love Sony consoles, I loved my PS1 and the PS2 is my all time favorite console ever. I even bought the PS3 at the high price point (because I knew the backwards compatibility was going out the window), but if things get much worse, even I might just skip out on the PS4 (and Xbox 720) in favor of a solid PC and Steam.

You and me are in the same boat in that respect. I got the last ps3 model for backwards compatibility and I never regretted it since new Ps3 models only remove features. However I don't put enough time in my ps3 or xbox 360 anymore to warrent getting a new console system for them when steam gets most of the games they do and for a lot cheaper. Honestly I have become more of a patient buyer thanks to steam. Even their worst sales are 10x better than sales for the consoles.

I was hoping they would catch up this generation in the pricing model but all they have focused on is DLC, season passes, online passes, and microtransactions.

Well I guess they couldn't just rip off Steam's version of DRM... though it is superior since its tied to customers and not machines...

Ah well, we all know the real reason they are doing this, to watch the tin-foil hat crew act like screaming Lemurs. Yes, dance, dance monkeys, dance and announce your unfounded fear and anxiety and denouncing of companies as evil.

Andy Chalk:
Sony Patent Hammers GameStop Share Price

image

Speculation about Sony's effort to put the kibosh on the used games market has taken a toll on GameStop.

The internet worked itself up into a pretty good lather yesterday in the wake of news that Sony had filed a patent on technology that would prevent games from working in any console but the original buyer's. The obvious use of such technology would be to close the door on the pre-owned market, but while Sony hasn't indicated whether it will actually use the tech in the next PlayStation, the widely held assumption seems to be that it wouldn't clear leather if it wasn't going to pull the trigger.

Either way, speculation about the potential impact on the used game market caused GameStop's share price to tumble by $1.67 over a single day, from a high of $25.67 to a low of $24.00 on January 3. The share price has since climbed back to over the $25.00 mark, but the sharp drop illustrates GameStop's heavy dependence on the pre-owned market. The retail videogame industry may be a dying beast anyway but the elimination of used games would sound an almost immediate death knell for the company.

Not that it's very likely to happen, according to analysts including Michael Pachter. "Sony is on record as saying that it has no desire to limit consumer choice," he said in an investors note. "Our more rational view is that Sony intends to put the ID matching technology into its consoles to provide individual publishers with the ability to block the playing of used games. The news has negatively impacted GameStop shares, and we think the reaction is overblown."

Source: GamesIndustry

Permalink

Ah, so believing Sony would block used or rented games from playing on a new console is "overblown" because Sony merely intends to enable others to do that same thing.

What.

Eclipse Dragon:

PoolCleaningRobot:
If only customers could buy games in some form that can't be resold possibly some sort of "download" formate. And they use the money they save cutting out retailers and the cost of packaging to make the games cheaper so more people would buy their games and not have a reason to buy used games altogether.

Except when the price of those download games doesn't actually go down, because game companies complain that the price of games is too high, but think the games their company in particular makes/ publishes are the only games to justify the high price tag. Download games on consoles very rarely drop in price, if at all.

Well, the reason for high price points on digital retail is actually because of stores like Gamestop.

They refuse to be undersold on any platform or store, so if they get wind that a title is going to be sold for like 40 dollars while they would sell it for 60 dollars, they will refuse to stock said title.

Most publishers will not take this risk because they rely on gamestops clientele more than they rely on digital customers for the moment.

Now, if they wanted to make this system really good they would also release a digital store front that sells games 10-20 dollars cheeper, then gamestop will get screwed on both ends, they cant resell the games, and the publishers and such wouldnt even need gamestop.

FelixG:

Eclipse Dragon:
snip

Well, the reason for high price points on digital retail is actually because of stores like Gamestop.

They refuse to be undersold on any platform or store, so if they get wind that a title is going to be sold for like 40 dollars while they would sell it for 60 dollars, they will refuse to stock said title.

Most publishers will not take this risk because they rely on gamestops clientele more than they rely on digital customers for the moment.

Now, if they wanted to make this system really good they would also release a digital store front that sells games 10-20 dollars cheeper, then gamestop will get screwed on both ends, they cant resell the games, and the publishers and such wouldnt even need gamestop.

That makes sense, so why don't they?
I'm just curious to hear what you think.

loa:

So sony doesn't want to "limit the customer choice", it only wants to give individual publishers means to limit it?
This either makes 0 sense or has been quote-butchered to oblivion.

Third Stratagem: "Kill with a borrowed knife."

The number of Sony patents that are never used is staggering. Sony mainly wants all these patents just so they can sue if someone else uses them.

Zachary Amaranth:
Didn't we have the same thing right before the release of the PS3?

Yes, yes we did.

I can only imagine how publishers will exploit this if its implemented. No reason to even drop the price of games and they can jack the price up as high as they want since there is no competition from used games. Wouldn't surprise me at all if some of the bigger AAA titles started carrying a $100+ price tag on launch.

FelixG:

Eclipse Dragon:

PoolCleaningRobot:
If only customers could buy games in some form that can't be resold possibly some sort of "download" formate. And they use the money they save cutting out retailers and the cost of packaging to make the games cheaper so more people would buy their games and not have a reason to buy used games altogether.

Except when the price of those download games doesn't actually go down, because game companies complain that the price of games is too high, but think the games their company in particular makes/ publishes are the only games to justify the high price tag. Download games on consoles very rarely drop in price, if at all.

Well, the reason for high price points on digital retail is actually because of stores like Gamestop.

They refuse to be undersold on any platform or store, so if they get wind that a title is going to be sold for like 40 dollars while they would sell it for 60 dollars, they will refuse to stock said title.

Most publishers will not take this risk because they rely on gamestops clientele more than they rely on digital customers for the moment.

Now, if they wanted to make this system really good they would also release a digital store front that sells games 10-20 dollars cheeper, then gamestop will get screwed on both ends, they cant resell the games, and the publishers and such wouldnt even need gamestop.

I find Gamestop to be ridiculously over-priced in almost every situation. I can count on one hand that I've been able to find a game in what I consider acceptable condition at Gamestop cheaper than Amazon, Ebay, or digitally. In these cases, its only because its some relatively obscure game and Gamestop likely wasn't aware of the actual value of what they were holding.

Maybe I'm in the minority, but I do about 95% of my game purchasing from Amazon since it is almost always far cheaper than Gamestop, especially when I'm buying used. Heck, often I can find a brand new copy of a game for maybe only a dollar or two more than Gamestop wants for it used. Only in the rare occasions that the Gamestop exclusive pre-order bonus is something I want do I go through them or when I'm wandering around the mall and get something on impulse and the later is extremely rare because of the piss-poor condition most used content out of Gamestop is sold.

I'm rather staunchly opposed to the idea of digital game distribution.

I fully expect a system to BOMB if this happened.

Sylveria:

I find Gamestop to be ridiculously over-priced in almost every situation. I can count on one hand that I've been able to find a game in what I consider acceptable condition at Gamestop cheaper than Amazon, Ebay, or digitally. In these cases, its only because its some relatively obscure game and Gamestop likely wasn't aware of the actual value of what they were holding.

Maybe I'm in the minority, but I do about 95% of my game purchasing from Amazon since it is almost always far cheaper than Gamestop, especially when I'm buying used. Heck, often I can find a brand new copy of a game for maybe only a dollar or two more than Gamestop wants for it used. Only in the rare occasions that the Gamestop exclusive pre-order bonus is something I want do I go through them or when I'm wandering around the mall and get something on impulse and the later is extremely rare because of the piss-poor condition most used content out of Gamestop is sold.

I'm rather staunchly opposed to the idea of digital game distribution.

I to buy most of my games on Amazon, but sometimes (very rarely) Gamestop can provide a good deal. Fire Emblem Shadow Dragon for example is running on Amazon for $38.96 used (the lowest price), that is in "acceptable condition game only", The used price at Gamestop is $19.99 (also game only), That's a pretty hefty price difference. If I wanted to purchase Shadow Dragon and there was no way I could possibly get the full package (game, manual and box) for a decent price, Gamestop would get my money in this case.

I was fortunate enough to buy Shadow Dragon before the price skyrocketed too high, I went to Gamestop to buy it at the $19.99 price tag and asked them why they didn't keep boxes for DS games, since I prefer to have the box. The employee told me "If I wanted the box, I could look online, but I'd most likely pay twice as much for the game." To that response, I left the store, looked online and found the game, manual and box for only slightly higher than the Gamestop asking price for the game only.

gardian06:

GonzoGamer:
Sony's shares dropped a bit too.
What I'm still not sure about is if it would completely halt anything but a demo play on the disc or is this their way of making the online pass thing a standard "feature?"
Either way, it seems that Sony's R&D would better use their resources to make a console that works well and is supported well rather than to squeeze a few more pennies out of a consumer base that can't/wont spend a lot.

in comparison between this and the online pass: the online pass is an additional $10 whenever you buy a used game that requires one, this is saying that you essentially only buy the game used "as a demo" otherwise it will lock the game out.

we are also not talking about squeezing pennies we are talking about squeezing the full retail price. technically with this system in place the depreciation rate of video games would diminish to non-existent, or extremely lower. because by having a used version of the same thing next to/near the new thing actually causes the value of that new thing to depreciate instantly (why should I pay $60 for something when I can pay $55 for the same thing just used). with this in place that used copy does not exist so game prices need not go down as much over the lifetime that the game is on the market. not to mention when a store needs more copies they "must" purchase them from the distributor.

then on top of all that those people who depend on trade-in value to purchase new games will basically be unable to purchase them.

Also, I feel like they're under the impression that if they were able to stop used games completely, that the people who bought used would all of a sudden buy the same amount of games, but just new copies. I think there would just be fewer games sold overall and/or more pirating going on. I used to buy used games because I didn't have much money (you saved more than $5 back before Gamestop gouged the market) and if I for some reason wasn't able to buy used, there are a good many new games I wouldn't have bought either. At that time all of the new games I bought on day 1 were follow ups to great games I bought used.

I love how gaming 'journalists' keep claiming the death of physical games.

Like EVERYONE has access to downloading a GB/second.

When I can no longer OWN a game, I'm out.

I see NO REASON to continue spending money on a HOBBY where I don't actually OWN the property.

Sony screwing over their consumers..? That's nothing new ..

but if some one was to screwing over sony Lawyer's so they can't work in law
that will stop them from trying

I'll say what I said before, the optimist in me would like to think that this system could be used to streamline the distribution of DLC does and the like. The console would be able to tell if the game is brand new or if has been used before, and through that it can generate a code for the extra DLC that new games come with (pre-order bonuses and such), or the online pass that some companies do if the game is used.

Of course, that's being extremely optimistic.

DVS BSTrD:
Sony what means more to you?
The millions in sales you WON'T lose because people who buy used would most likely never purchase the game at all?
OR the millions you WILL lose by alienating your customers?

EDIT: wrong quote. Apologies.

loa:

Not that it's very likely to happen, according to analysts including Michael Pachter. "Sony is on record as saying that it has no desire to limit consumer choice," he said in an investors note. "Our more rational view is that Sony intends to put the ID matching technology into its consoles to provide individual publishers with the ability to block the playing of used games. The news has negatively impacted GameStop shares, and we think the reaction is overblown."

So sony doesn't want to "limit the customer choice", it only wants to give individual publishers means to limit it?
This either makes 0 sense or has been quote-butchered to oblivion.

Maybe it means used games published by Sony won't be affected while games published by EA will be?
--
Still too early to panic. Just going to wait and see what happens.

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