Will the next Xbox destroy second-hand gaming?

by , Technology Researcher Technology 9 February 2013
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There are rumours going round that Microsoft’s next Xbox console will remove the ability for users to buy and sell their games on the second-hand market. And if that’s true, I certainly won’t be buying one.

Portal 2 Playstation 3 second-hand

The rumour is that new games for the next Xbox will be shipped with a code that you’ll need to enter to prove you bought the game. Once that’s done, the game is tied to your console and can’t be sold or lent to a friend. It’s yours and yours alone. Forever.

Further rumours state that the new Xbox will require players to be online 100% of the time. It’s plain to see that Microsoft is driving us towards a digital future. But if the second-hand games market falls apart as a result, there’ll be little incentive for publishers and retailers to lower the price of new games to make them more competitive.

Digital downloads driving up prices

If you take away the re-sale value of buying the physical product – you may as well download the game instead. And this probably suits Microsoft. It’ll have fewer concerns about manufacturing costs, distribution, or dealing with faulty goods. It’ll no longer have to deal with retailers. Digital copies of games can easily be replicated and sold online, and it’ll be easy to make sure there’s only one copy per buyer.

And I suppose that wouldn’t be so bad if digital store prices were reasonable. But if you want to download the last Call of Duty from the Xbox marketplace – that’ll set you back £49.99. A second-hand copy from CEX is only £12. Once the second-hand option has gone for good, prices for new games will no doubt stay higher for longer – bad news for game fans.

Digital stores can work for gaming. The PC leads the way here, with many excellent gaming services that compete with each other and offer great prices, like Steam, Green Man Gaming and Good Old Games. The problem with the Xbox marketplace is there is no competition. Once you buy the console, you’re locked in. There’s nowhere else to go to buy your games digitally and, all of a sudden, you find yourself paying £49.99 for a downloadable copy of Modern Warfare 3.

Don’t cut down our options

Getting rid of the second-hand market will only lead to a lack of choice for game-buyers. You can also expect to see a few more gaps in the high street too. The second-hand games market is huge, and it’s hard to say if the likes of Game and CEX would survive without it.

If the rumours are true, I won’t be buying the next Xbox, as around 70% of my game purchases are second-hand. If you’re going to force me to pay inflated prices for ‘new’ content, physical or digital, then I won’t buy it. It’s not a question of being tight with my money – it’s about being a savvy consumer and making my money stretch further.

Maybe this ‘rumour’ is simply Microsoft testing the water before it reveals its new console. If that’s the case, we can only hope it will listen to the overwhelmingly negative response. Would a ‘buy new only’ policy put you off buying the next generation of game console? Do you prefer to buy second-hand games, or do you buy ‘new’ every time?

17 comments

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banjo

“we can only hope it will listen to the overwhelmingly negative response”

Like it listened to us when it tested Windows 8?

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Em

I can’t imagine that Microsoft – or any other console manufacturer for that matter – would really care about a lost sale, if you are only interest is in playing second-hand games. The console is the loss leader – it’s the sale of new games that provides the profitable revenue stream they are after.

If you don’t recognise the fundamental economics of software vs. hardware, ask yourself why Microsoft never sold PCs, but have a dominant position in computing and electronics.

A fair point Em, but the landscape of home consoles has changed considerably in recent years. I would have agreed ten years ago that a manufacturer would have little interest in a console owner who only purchased games second hand, but today’s consoles aren’t just focused on gaming. At this point gaming is almost secondary to the other content that can be pumped into your living room via the console – music, films, TV, all available via a home console, and if you’re an Xbox 360 owner, they require a paid for Gold account.

If I don’t buy the next Xbox, Microsoft can’t sell all this content to me.

Also, think of the Xbox dashboard, and it’s glaring advertising for the latest films, dog food or whoever has paid their advertising fee that day. I won’t see that either. That’s one less potential customer for their advertisers.

Then there’s digital only games. If I want these, I can’t buy them second hand.

Physical copies of games are not the only revenue stream for console manufacturers. In they lose a customer, they lose an advertising target too.

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wavechange

Copying of music and films was encouraged by high prices set by greedy companies. Microsoft should be aware of the amount of their software that is pirated. Enthusiasts will find a way of beating any system that Microsoft introduces to restrict what users do with games.

Play fair Microsoft or you lose the game.

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Vickseek

I remembered ranting about when the sega-cd and psone came out, paying full price for a cd-rom the same price as Ninty cartridges (a piece of hardware!!!), now the same thing is happening with digital downloads, at least we have the freaking cd, dvd or bluray, but now those ambitious b******* want to get us rid of the good stuff, they need to understand that they need to deliver what the costumer wants like: full price for the game and the media, half price for downloads (the same game of course) and reward the people that purchase the physical media with dlc and other stuff, and reward people that purchases digital with a low price for the same stuff, and everyone wins, this is not a poker game between gamers and game enterprises this should be a win-win situation. I agree I would not buy another console if they can´t compete with steam price-wize and if they block used games that we buy because they are CHEAPER. Sorry for my english Im from Portugal, peace and keep the good articles coming :) .

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Dirk

It is highly unlikely Microsoft would do more than they already are doing to stop used game playing. What they might do is solidify the process with various uses of Seasonal and Online passes. To actually prevent you from playing a video game designed to work on a specific game console simply because Microsoft didn’t get a royalty payment? That smacks of protectionism from a dominant company in a specific market trying to protect there revenue stream at the expense of someone else. That might be considered an anti-trust violation. If you don’t agree look how Microsoft tried to do that with Internet Explorer in the United States and Media Player in Europe. They lost.

Yes, can’t see how this could be allowed. The same has not happened for DVDs, Blu-rays etc. I would like to see more money going to the developers and publishers, rather than it all going to the retailer – perhaps some rules should be in place for them to get a cut?

I’m really disappointed to hear these rumours. My brother-in-law and I regularly lend each other games that we’re not 100% sure on buying, and this will mean it’s no longer possible. At a potential price of £50 a game, you can be sure I’ll only be forking out for the crème de la crème, which will ultimately lead to a lot less spending on games.

I really hope this is just a rumour and Microsoft don’t follow through on this. ‘Buy new’ only would certainly have an impact – buying second-hand from stores and lending between friends is a great way to boost your game collection economically. Admittedly I own a playstation and not an Xbox, but if the same rule was applied to the PS4 it would potentially put me off buying it.

I’m really disappointed to hear about this. As with most people, I tend to lend games to friends or vice versa to see if the game is worth forking out for the full price. This has definitely made me reconsider purchasing the new Xbox when it is released.

I wonder if the games rental market will also be affected by this?

I hope the rental market survives – I saved myself buying some underwhelming games by renting them first. For people like me who only buy a few games a year being able to rent really helped me to choose what to buy.

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lombear

Won’t this fall foul of the ‘must be able to resell software licenses’ decree from Europe last year?

Unless MS go as far as all software being leased for a specified period of time?

I wouldn’t be surprised, with the Xbox 360 I thought Microsoft displayed astonishing avarice. Microsoft made otherwise common hardware incompatible unless you used their pricey versions. USB wifi adaptor? Microsoft’s was £55. Want to upgrade your hard drive? You need a single-use Microsoft transfer cable. Plan to use your wireless controller with your PC through the USB cable? You need another adaptor. The list goes on.

By contrast Nintendo and Sony used industry standards, such as SD cards and standard USB connectors.

Let’s also hope the red ring of death never appears on the new version. I’ve had two Xbox 360s die on me (the latter out of warranty), no other console I have had (and still have) was as noisy or as prone to hardware hissy fits as the Xbox 360.

Due to these issues, plus the potential problems Jack mentions, I won’t be buying another Xbox.

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Roland

The problem is not re-salability itself, it is again, corporate greed.

No one will complain if publisher offer digital games at cost of retail games minus distribution, physical and inventory costs. But they don’t, they give you less, especially re-salability, while charging the same price.

While some people still resent Steam platform on PC as a giant DRM ridden platform, it is a success story on how taking away resalability does not mean damage to customer satisfaction. Why? Price.
Prices on steam is not only very flexible, but also competitive. Sales events are frequent, and prices of games tend to drop quicker than retail channels for older games.

Ars has a nice opinion on pricing here:
http://arstechnica.com/gaming/2013/02/going-to-block-used-games-on-your-console-heres-some-pr-advice/

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gem 761

I really feel sorry for the parents of kids who have an xbox360,note to Microsoft ,these parents don’t have a wage like MR bill gates, these kids don’t even get freebies with their games. I also support the hard working people who play these games for leisure/pleasure , I being one who has to pay ridiculous prices for new games I thought I was doing society a favour by not pi**ing money up a close. To Microsoft, I will be going for a ps3 the minute I hear the truth about the new xbox THANKS FOR NOTHING.

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Howard

If microsoft go through with this idea I can see it being a massive own goal that will have sony rubbing their hands with glee. I understand it might be a way of controlling piracy but I’m sure that the hackers will find some way round it. If it turns out to be true then I’ll be sticking with my 360 and will seriously consider switching to the PS4 if I want to upgrade. I enjoy shopping around for bargains whether they be new or second hand, I never pay £50 for a game no matter how good it looks.

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johnpotter1965

I get all my games through a Lovefilm subscription…… how will that work?

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