GameStop Boss Thinks The Next Xbox Will Play Used Games

The head of America's biggest chain of game shops said he thinks it is "unlikely" that the next Xbox will block the playing of used games.

"We think it's unlikely that there would be that next-gen console [that blocks used games] because the model simply hasn't been proven that works," Paul Raines, CEO of GameStop, told investors today during an earnings call.

In February, I reported that (quoting my own article), "Microsoft intends to incorporate some sort of anti-used game system as part of their so-called Xbox 720." I got that information from a reliable industry source who was in a position to know but not in a position to reveal their identity.

I remain confident that Microsoft has pitched its next console as one that would include an anti-used game system. But I was never able to clarify whether that meant the machine would block used games entirely, maybe only allow online play with originally-bought games or some other system.

Microsoft has repeatedly declined to comment on this or any other specifics related to its future hardware.

"Remember that used video games have a residual value," Raines continued. "Remember that GameStop generates $US1.2 billion of trade credits around the world with our used game model. So, consider taking used games out of that, you'd have to find new ways to sell the games. And, our partners are good partners. The console companies have great relationships with us."

And then he raved about the PlayStation Vita and its new hybrid business model (digital downloads and store-bought game cards).

It's no surprise that GameStop would be against any console restrictions on used games, just as it's no surprise that publishers and developers, who make no direct money from the sale of used games, would cheer such a move. It's also clear that Apple has had no trouble selling its hardware — and the games for it — digitally, which prevents retailers from trading in any sort of "used app" business.

Things change while hardware is being developed and our own report that the next Xbox, code-named Durango, would support Blu-Ray has been complicated by the respected MCVUK reporting that the next Xbox will have no disc drive at all (presumably a model Raines also might have a comment about).

Have things changed? Or are we still just not seeing this elephant in full view?

Or is GameStop just giving their best guess? Earlier in the call Raines said that his team hears the same hardware rumours everyone hears, adding "We don't really have a lot more information than that."

I stand by my original reporting. We'll see what happens.

Q4 2011 GameStop Corp. Earnings Conference Call [Hear it at the 58-minute mark]


Comments

    I don't think the worldwide internet is where it needs to be to support a download only Console that can achieve mass market sales. Consoles have always been sold across all regions in the world many of which do not have widespread 'high speed' broadband internet to support the market. But if they made it so each copy of a game has a serial that is registered with a required account. Then the disc distribution could continue but the disc itself can only be used once. This would be interesting but is really no different to buying a game on Steam for example. So long as they allow your account to re-download the game again in the future I personally wouldn't have a problem with that. I rarely buy used games so not being able too isn't something I really care about but I can appreciate many other people/kids with lower incomes thriving on used games. My biggest gripe with used games is when they are sold at $5 less than a full priced 'new' copy. This price is still in the markup range which means it is %100 profit for the retailer and %0 for the Publisher/Developer.

    I buy used games sometimes and do not have Xbox live. If they require some blizzard style sign up that will suck big time.

    I think EB Games / GameStop are little more than Cash Converters for games. The rise of digital distribution is going to end their business model eventually, and I'm not sure I care.

      To be fair Cash Converters at least sells used games at a reasonable price, compared to EB's "only $5 cheaper than a brand new copy" business model.

        Good point. That was totally unfair to Cash Converters. :)

    They extract value and provide little in return with used games. good riddance

    Sure the services provided by game re sellers may seem unnecessary but think about all of the people employed by these chains. Now is not really the best time to put a couple of thousand people out of a job.

    Personally i can understand why people want used games. The issue i think is that the way they are currently handled is wrong.

    I'd like to see the separated make it so that you have your new games shop and your trade in game shop. At least that way when someone fully intends on buying a new copy of the game you aren't being hounded by the clerk saying but look $5 dollars less. Which is partly about the fact that they make a higher margin on the used copy. And partly the fact that if you buy a used copy your going to be less inclined to keep it anyways

    A console that doesn't play used game will automatically turn all the fans away, so it is only natural to presume next gen xbox will play used games.

    I really REALLY don't get all the hate with the obviously knowledgable business aficionados on EB/Gamespot's "business model". A good business model is one that makes money, not one that panders to the endlessly cynical message board posters. People buy their stuff, they make money. I'm sure that if any of you were in any significant position of power you wouldn't try and make as much money from your business as possible while the demand is there. It's their job to make money with their products, it's your job as a consumer to make informed choices, not wish the death upon a completely legitimate business.

    "GameStop Boss Thinks The Next Xbox Will Play Used Games" I'll just leave this here
    http://www.youtube.com/watch?v=A4VbOHvaPRc

    Can't say I'd shed a tear if EB were to go under.

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