Feb 9th, 2013

There has been a lot of talk, rumors and fuss about the upcoming consoles from Microsoft and Sony. These “rumors” from “trusted sources” claim all sorts of things. The latest ones comes from Edge Online, which cite sources with “first hand experience” that the upcoming Xbox 720 will require an always-on connection and more shockingly, will ban used games. Which is complete and utter nonsense.

Used games won’t be banned on the Xbox 720, nor the PlayStation 4 for that matter. Here’s three reasons why:

Used game business is huge

Used games on Xbox 720Used game sales generate billions of revenue for retailers such as GameStop. Used games have become such a lucrative business for GameStop that it now accounts for nearly 40% of their revenue, and the profit margins on used games are over double that on new games.

There is no way Microsoft and Sony will go to war with GameStop over used games. GameStop is still the biggest games retailer in the world and without them, Microsoft and Sony wouldn’t nearly sell as many consoles as they do. Nor would they sell as many games as they do.

Used game sales fund sales of new games

Used games on PlayStation 4People who buy and sell used games are hardcore gamers who usually sell their old games to fund their new game purchases. The billions that used games generate for those who sell them are usually re-invested into the games business with the purchase of new games.

While console makers don’t get a cut from used games sales (and neither do the publishers), they do benefit from increased sales of new games. And to cope with the used game sales, many publishers have blocked online multiplayer for used games, which usually require a $10 “online pass”. It’s likely that this tactic will be expanded into the new generation of consoles. It’s common even today that games ship with content on the disc, only later to be offered via a “DLC”.

Gamers won’t accept it

Used game salesThis is perhaps the biggest reason why used games won’t be banned on the new consoles. The people running the console divisions at Microsoft and Sony aren’t stupid. They know how unpopular it would be if they blocked used games on their consoles.

Banning used games on the Xbox 720 will almost guarantee that the PlayStation 4 would win. And vice versa. Unless of course, the people running the console business at Sony and Microsoft actually are stupid.