Rumours Of PS4 Restricting Used Games Sends GameStop Stock Tumbling

GameStop's stock price closed lower by $US1.30 — a 5 per cent loss overall — after word this morning that Sony had applied for a patent on technology that could restrict how used games are played on its next console.

Used games are, of course, a cornerstone of the GameStop customer experience, whether trading them in for store credit toward other purchases or buying older releases for less than full price. The news was enough for the gaming industry analyst Michael Pachter of Wedbush Securities to send a note to investors that, while acknowledging the patent filing, downplayed the idea Sony's next console would outright prohibit used or previously played games.

"Sony benefits little from a unilateral decision to block games," he wrote. "The company's first party software sales represent less than 10 per cent of overall sales on its consoles, and it is unlikely that blocking used games would result in a lift of more than 10 per cent in new game sales. That means that Sony's sales would rise only marginally if the PS4 blocked used games."

Moreover, "Sony would be materially hurt if its console blocked used games and competitor consoles from Microsoft and Nintendo did not," Pachter said. He maintained confidence in GameStop, rating it at "outperform" and setting a 12-month share price target of $US33 for it.

Pachter says a "more rational view" is that the technology Sony has is meant to provide individual publishers with the means of blocking used games from the console, if they so choose. "Should a publisher be reckless enough to risk the wrath of its customers, Sony's ID matching technology would allow that publisher to create terms of use that are similar to a software licence, rather than to a disc sale," he said. "We do not believe that either Sony or any publishers are currently foolhardy enough to take such a risk.

"The news has negatively impacted GameStop shares, and we think the reaction is overblown," he added.

Kotaku reached out to GameStop for a comment on the news but did not receive one as of publication time.

Almost a year ago, Microsoft was rumoured to be considering similar anti-used game measures in its next console, codenamed Durango. Those whispers were enough to send GameStop's share price on a similar, if more gradual slide, losing $US1.73 from its $US25 price in a week. The stock did rebound, but didn't surpass a $US25 share price again until November.

GameStop shares fall on Sony patent application [Yahoo! Finance]


Comments

    Patcher don't know what he be talking about yo. That fool never even ate dat hat.

    So the same for EB Games, then (since EB Games = Gamestop)?

    Same, No sharing friends games? no ps4 for me either. might compel me to try MS

    I don't have a problem with not being able to play used games but I always borrow games off mates this would really annoy me if I share games

    No used games?

    No Ps4..

    Actually i'm already leaning away from Sony, They have lost the plot these days.. Vita is such a disappointment.

    Sony is busy digging themselves a deeper hole.

    Michael Pachter said something that makes sense? It must be Opposite Day. (Why does ios capitalise that? I'm pretty sure it's not actually a real day!)

    The online keys that come with brand new games have stopped me from buying second hand lately, if I expect to go online anyway (fps and fighters)
    I don't have any friends so I can't borrow from them... so this doesn't effect me a whole lot.
    PS4 is still looking all right from here.

    Excellent news about Gamestop/EB. Hope they go bust, those thieves.

      Please go back and read the article. Also its a luxury they are giving you by getting credit from used games. Because really they don't have to, product isn't faulty and has been used = don't have to give a $%#@ about it. But they offer the credit because they want to for their customers.

        They buy used games for $20 to $30 and sell them for $80 to $90 usually a mere $10 less than a new copy it's about making money not giving a great deal to the customer.

        Edit: added the word used to make it clearer

        Last edited 04/01/13 3:30 pm

          where the hell do they buy it for $20 and $30? They normally buy it for $5 or $10

          Pretty sure u have no clue,
          Sure tey trade some games for as little as $10, however they don't sell for for 90, not in my experience, I'm sure it's happened a few times but it's not common.
          The pre owned games I have seen that are around the $90 mark are usually games that have only just released and still trade in for $50 (give or take based on the promotions and lvl of membership)
          And the games that trade in for $10 -$20 u see on the shelf for $40-$50.
          I spose the only time I traded in a new release for so little was wen I got it for free with the console, but it was a free game so I didn't care what I got for it, it still made the console cheaper.

          On a more related note, I don't like this idea of sonys, I have friends, siblings who we often buy a game each (2 different ones) play them then swap with each other and play those

          Last edited 04/01/13 5:14 pm

    I don't get Pachters reasoning.

    Sony do receive funds from every game sold for a Sony machine - wether or not it's a first party title.

    And why would game sales only increase by 10%. Isn't Gamestops percentage of used game sales far higher than 10%?

    If people can't buy used games will they stop buying games altogether? I wouldn't have thought so.

    I agree that Sony, or any individual publisher, would suffer if they were to be the only ones to implement a ban on used games, but I could easily see that Sony and Microsoft and all the publishers could agree to implement the technology on a wide scale. I personally see it as inevitable.

      You must be using something resembling rational thought then, pachter doesn't subscribe to that school. we're talking about a man who believes the only reason somebody would try to cure cancer is to make money from the cure, his head isn't full of much but dollar signs.

        Well he is a financial analyst. Kind of normal to focus on the dollars that being the case.

    While I dislike the thought that we may be restricted from buying second hand games and instead forced to buy new, I wouldn't be all that surprised if it's implemented one day. Sure, it'll be an unpopular move, and there will be a lot of backlash, but Sony, etc won't care. Every secondhand game sold is a missed purchase for developers, etc. They're already missing money on that, so why not risk losing possibly the same amount simply buy implementing this sort of thing? I don't think it's a matter of "if" it'll happen, but "when". I don't think that'll be enough to stop me from gaming though, even if all consoles have this feature. :( It'll just mean that I'll buy fewer games at a time, and probably play older consoles more.

    That means we will have to pay top buck for those shit games that are over priced when they are new :(

      Actually, if anything it might encourage developers to try harder to make a decent game because fewer people would be willing to take the chance on potentially crappy games. Either that or it would cause smaller developers to go under and for bigger developers to just focus on "safe" games. O_O

    Welcome to the a brave new world PC gamers have been living in for the last 10 years.

    I can see this being used in ways that might be a little outside of the square of totally denying users the ability to play used or borrowed games.

    What if it's just to lock the buyer out of the multiplayer capability on a used title but it can be unlocked for an additional fee?

    What possibilities does it have in deterring theft? i.e. your PS gets stolen along with the games you owned. Your PS account has a list of software ID's against the stolen systems hardware ID. You log on and remove the ability of those software ID's being run against that hardware ID.

    I think a lot of this is a beat up because it would take a very brave (and crazy) system developer or software publisher to want to implement such a system.

Join the discussion!

Trending Stories Right Now