Gamestop, Xbox One and the Used Games Debacle

Does the Xbox One support used games? It’s been three days since the Microsoft press conference where they unveiled the Xbox One. Microsoft put on an impressive presentation showing off the console’s specifications, hardware and graphical capabilities. What they didn’t explain was whether the Xbox One played used games or not. Journalists at the press conference asked about that very subject following the end of the presentation. Microsoft gave vague answers until today, when they claimed that the Xbox One will indeed support used games. Microsoft isn’t the only one to chime in on this important issue, as Gamestop has made the same claim.

“I figured that question would come up,” Gamestop President Tony Bartel said during a financial call’s Q&A segment. “Definitely Xbox has said that they do support the trade-in/resale games at retail and that they want to handle communication from this point forward on that. I think what is important to note is that all three of the consoles that have launched have now come back and they say, ‘I realize the value of the buy-sell-trade model,’ and they have built that into their new consoles moving forward. We anticipate that we are going to be able to leverage that, like we leverage it on the consoles today.”

Gamestop believes they will be able to negotiate a favorable deal for themselves when it comes to the used games market and the Xbox One. Negotiating unfortunately means giving up part of the profits of used game sales which is what Microsoft and developers want. All retailers who participate will have to agree to Microsoft’s terms and conditions and then integrate Microsoft’s cloud based Azure system into their retail system. Once a consumer trades in their Xbox One game, the game is then registered as having been traded in on Microsoft’s system and the game is wiped from the consumers XBLA account. The retail store is then allowed to sell the game at whatever price they see fit provided Microsoft and the publisher receive their cut. There are unconfirmed reports that once Microsoft and the publisher take their cut, the retail store is left with only 10%. That doesn’t sound like much, but that’s similar to what retail stores get from new game sales. On the other hand, it’s a much smaller profit margin than what retailers are enjoying when selling used games for current platforms. This is a deal that greatly benefits Microsoft and publishers and leaves retail stores like Gamestop out in the cold. A three way split on the sale of used games is inevitable; we will just have to wait and see how the negotiations go.

Here’s one final quote from Microsoft on used games and playing games at a friend’s house:

“While there have been many potential scenarios discussed, we have only confirmed that we designed Xbox One to enable our customers to trade in and resell games at retail. Beyond that, we have not confirmed any specific scenarios. Another piece of clarification around playing games at a friend’s house – should you choose to play your game at your friend’s house, there is no fee to play that game while you are signed in to your profile.”

Stay tuned to Gamer Horizon as we will bring you all the latest news on the Xbox One along with any new information we receive about the used games market at E3.

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