In another article posted on this site about the Xbox One, the blogger pointed out one of the most important changes that Microsoft is implementing with the new console. From that article:

“Once it (a game) has been installed once, a unique identifier on the disk is flagged on Microsoft’s servers which marks the disk as used. Other people using the disk will need to pay a fee to Microsoft in order to play the game, though just how much this will cost is unknown.”

So let’s think about this. If a game is installed on the console, that means that it’s bound to that console. Granted, many online PC games have done something similar for years – if you buy a game, like World of Warcraft, the key from your game is automatically attached to your account, and no one else can use that key.  That’s why there hasn’t really ever been many used PC games or PC game rentals. But this could totally change the face of console gaming.

In this article, let’s look at this from two different angles: that of game rentals, and that of used game purchases.

Game rentals

Game rentals have definitely decreased in recent years. This decrease is mainly due to the implementation of markets like the Wii Points store, the XBox Live Marketplace, and the PS3 network. These markets provide gamers with fairly inexpensive games and trials of newer games, which lessens the need for game rentals.

Do people still rent games? Absolutely, but being able to rent games is going to become a thing of the past, at least for games for the Xbox one. That means that a third of the game rental market is not going to exist in the next generation of gaming consoles, and if Sony decides to follow suit, it could spell bad news for companies that do rentals such as GameFly.

Used game purchases

This is where there needs to be even more concern for the gaming market. The used game industry makes up a nice little percentage of the games sold every year. That means all that money is not going to the developers… or is it?

GameStop, in particular, offers a program where you can trade in your old consoles and/or video games for store credit. That store credit can go toward other purchases, and those purchases may be for games that are new or for consoles. That money is still getting to the developers, it’s just not in the way of the original game that was developed.

This is where the Xbox’s One model may be going wrong. Microsoft looks like they are going to be making more money because of restricting the purchase of used games, but in the end, they may be hurting themselves. Lots of people use money from their used games to buy new games, and without having this option, they may not buy as many games as they would have.

So what is the solution?

Currently, there really isn’t one. Microsoft seems set on following the PC model and not allowing people to buy used games, to rent games, or even to borrow games to try from their buddies. Is it a bad idea? Maybe, that is yet to be seen. How could Microsoft remedy this potential dilemma?

  • Make the activation fee much less. Bought a new game? Pay $5 or $10 to activate it on your console. Granted, we do not know how much the price is to do that, but I doubt it will be that low.
  • Just throw out the idea. They probably can’t do that in this stage of the game, because of where they are in development and the development of games, but it is a potential solution.
  • Work with used game and game rental companies. These companies have some very intelligent people who may have some really good ideas on how to reconcile this change with the used game and game rental markets.

What do you think of this new change that the XBox One is bringing to the table? Do you think that Nintendo and Sony will eventually follow suit? Is it going to hurt these industries as much as much as this article seems to imply that it will?

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