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Microsoft Takes High Road on Used Games

7 Jun, 2013 By: Erik Gruenwedel

Software giant will leave third-party used game access on new Xbox One console to publishers; disc-based games can only be shared once

Microsoft will allow owners of the new Xbox One video game console to play used content with third-party publishers’ consent.

The policy addresses concerns by some that Microsoft would curtail access to used games on the Xbox One. The buying and trading of used games is a mainstay within the gaming industry, including at GameStop — the nation’s largest game retailer.

“We designed Xbox One so game publishers can enable you to trade in your games at participating retailers,” the company disclosed in a June 6 blog post. “Microsoft does not charge a platform fee to retailers, publishers or consumers for enabling transfer of these games,”

However, Xbox One users will only be able to share disc-based games once with people identified on their “friends list” for at least 30 days. Microsoft also revealed that Xbox One owners will be able to buy disc-based games at retail or online through Xbox Live, on the day of release.

“Discs will continue to be a great way to install your games quickly,” the company said.

Michael Pachter, analyst with Wedbush Securities in Los Angeles, doubts many game publishers will not allow consumers to sell or trade their titles to third parties or retailers.

“We expect the majority of the large publishers to enable used gaming, at least in the early years of the Xbox One launch,” Pachter wrote in a June 7 note. “In our view, any publisher that disables used gaming risks a backlash or boycott of its titles by gamers, negatively impacting sales.”

The analyst added that Microsoft’s new policy offering digital access to new games the same day as physical could negatively impact GameStop.

“We believe that this disclosure has the greatest potential to negatively impact GameStop’s business, as GameStop is unlikely to participate directly in these digital sales; however, we believe it is in the best interests of Microsoft and the publishers to integrate GameStop’s PowerUp Rewards [membership loyalty program] currency into digital transactions in some manner,” Pachter wrote.

With GameStop’s significant retail footprint, Pachter believes Microsoft will allow gamers to purchase digital content from GameStop’s DLC kiosks, or that Microsoft will allow the company to integrate its PowerUp Rewards program directly through Xbox Live.

Pachter said that by incorporating GameStop’s loyalty membership program and points (or currency), Microsoft would entice members to purchase content via Xbox Live.

“GameStop’s kiosks could be used by Microsoft and the publishers to garner significant interest in upcoming and already available titles, maximizing pre-orders and in-store sales,” he wrote.

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