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Used Games and the Xbox One

by Eric Frederiksen | May 22, 2013

The Xbox One conference, as we now know it, answered a few questions. What does the console look like? A home theater PC, I’d say. Will it do live TV? Yes. Will it require Kinect to function? Yes it will. Hopefully we can throw a blanket over it. I don’t need my Xbox watching me watch TV.

XBox Logo - Horizontal - Large

But it also raised some questions that will be core to how people use the console and how they buy, sell, and otherwise obtain games. Here are the details we have now, though some of them are a bit foggy.

Xbox One Knows Whether a Disc is New or Used

Reports as of the time of this writing say that games, once installed to the console’s 500GB drive, will be linked to a user profile and that the console will be able to tell whether the disc is new or if it’s been used. According to Microsoft, used games will require an activation fee to play.

Cue everyone freaking out.

Assuming that this is true and stays true, how will it affect used games and rented games?

The first thing to look at is downloads. Games installed will be linked to your user profile and will, we’ve heard, be re-downloadable. The likely scenario is that every game will be available for online purchase on release day.

You’ll also be able to recover a previously purchased game even if someone stole it or scratched it beyond playability, since those installed games don’t require the disc. We might also see preloads on popular games, just like we do on Steam. We haven’t heard anything along these lines yet, but it’s definitely a possibility with the massive system of 300,000 servers Microsoft is putting in place.

Steam

Along with those advantages, though, there are plenty of potential problems.

You’re Purchasing a License, Not a Disc

The idea of game ownership is out the window. You’re not purchasing the disc, but rather the license. This system isn’t that different from buying a game and then activating it through Steam. Microsoft and publishers would both benefit from cutting retail out of the equation; no limit to number shipped or locations to ship to, or physical goods to manufacture. The benefits for consumers are less obvious, and the disadvantages stick out like neon lighting.

If Microsoft can adapt to the marketplace and offer the same sorts of sales that Steam does—daily and seasonal sales that are both frequent and impressive in the degree of price cuts—the online game purchases might become an appealing alternative to store purchases. If they think they can keep four year old games at $60, they’ll find their system pretty barren.

Microsoft and Sony are both trying to move game consoles into the same space as movies, music and books, what I’d call a fan’s market rather than a collector’s market. A fan’s market is one where there’s a lot to consume, but it’s considered ephemera, while a collector’s market is one where ownership plays a major role in consumer involvement. Music and movies already have this down pretty well, but books and games are lagging behind with overly high prices and weird DRM schemes.

If we move toward something more like a Steam market, what does that mean for used games and rentals?

Credit: sxc.hu

As mentioned earlier, there will be a fee to activate a used game. There was some hope that it might be a small fee or something like half the retail price, but Microsoft did clarify that activation, in fact, will be full price. While the game is linked to your profile, allowing you to play it on other consoles, it kills word of mouth advertising and raises the barrier to entry for less-moneyed gamers.

Editor’s note: Microsoft has since clarified this fee as a “potential scenario.” From where we stand, it looks like this fee news wasn’t part of yesterday’s plan, and the company is now in damage control and backpedal mode. – Joey Davidson, Senior Gaming Editor

A huge problem with the activation fee is the speed with which used games devalue. A sliding scale on those activation fees could solve this, largely. Older games would cost less to activate while newer would cost more.

If you’re the type who only buys Steam games when they’re discounted by 75% or more, I can see your trepidation with regard to this whole idea. You’re not interested in owning those games, but rather paying a small fee to access them if you’re ever bored.

But anyone who purchases games new on Steam and takes part in the preload process shouldn’t see this as being very different. You buy a game, it’s attached to your gamertag (or Steam ID), and you can’t lend it to anyone without lending them your login along with it.

What About the Rental Business?

The only business I see as being totally cut out of this is the rental business. GameFly and RedBox are both in big trouble unless Microsoft is planning to work something out with them.

gamefly-logo

These policies don’t seem finalized, so it’ll be interesting to see where they go between now and E3 in a few weeks and release day after that. Hopefully the system will become clearer at E3, and after that, both fans and businesses like GameFly, RedBox, and Gamestop will speak up.

In just the used games department, Microsoft has a lot of PR work to do. That’s not even getting into the requirement that Kinect be always connected and watching you like a creepy Police song lyric, or the fact that your Xbox needs to connect to the internet every day or so to continue playing games.

Microsoft gave me a few things to be excited about (Forza 5, Quantum Break) and lots to be very worried about.

Final Thoughts from Joey

XBox One - Product - Front

Yesterday was a long one, and Eric elected to draft this used games story up right around the time I passed out. I found it waiting for me this morning, and it’s a great recap of what’s going on.

I wanted to put one thing out about this whole used games deal: don’t let it be a factor for you yet. Phil Harrison, the Microsoft executive who let slip the news of a big fee for used games yesterday, is either completely wrong are talking about things his company doesn’t want to talk about. Either way, Microsoft started backpedaling last night, and all of this used game news went from hard fact to “potential scenario” in about four hours.

Just wait. We’ll be following the story closely.

-Joey


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Eric Frederiksen

Eric Frederiksen has been a gamer since someone made the mistake of letting him play their Nintendo many years ago, pushing him to beg for his own,...Eric Frederiksen has been a gamer since someone made the mistake of letting him play their Nintendo many years ago, pushing him to beg for his own,...


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