GameStop Says New Console DRM Will Significantly Reduce Console Appeal
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The rumored DRM policies from Sony and Microsoft that would prevent the sale and use of used games, have been making headlines recently. Let’s face it, the economy isn’t getting any better, and gamers are already stretching their wallets just to keep up with their favorite hobby. Restricting video game retailers to sell new copies only will seriously reduce sales in a market that has already begun to buckle under its own weight. Not only that, but it encourages piracy because more people will attempt to circumvent the DRM. We have precedent for this. Countries like Brazil have a humongous piracy market. Well-known retailers often sell pre-modded consoles and copied games specifically because games are too expensive for the common gamer to buy.

Well, it looks as if GameStop agrees, at least in a small way. They believe that integrating strict DRM into next generation consoles will force people away from the console market. “We know the desire to purchase a next-generation console would be significantly diminished if new consoles were to prohibit playing pre-owned games, limit portability or not play new physical games,” said Matt Hodges, a GameStop representative. This data was apparently based on surveys that GameStop conducted, though specific details of the survey were not shared.

 

It makes sense that GameStop wouldn’t be in favor of the restrictions. Nearly half of its profits are made from used games sales. Not only that, but GameStop stock fell six percent after first reports of next generation DRM came in. GameStop has been sharing the results of its survey with Sony and Microsoft, letting the companies know that their customers want nothing to do with these new DRM policies.

Bear in mind that these new policies are still just rumors. In fact, some analysts think that they don’t even exist. Michael Olson, an analyst with Piper Jaffray, said that he is “confident that both the new PlayStation and the new Xbox will support used games.” He also said that now is the time to buy GameStop stock, as it will rise once again when the next generation is revealed.

Many people think that instituting new strict DRM policies like this will significantly harm the gaming industry, and Sony and Microsoft know that too. So, there’s a good chance that the whole thing will blow over.

Is it kind of crappy for used game profits to go completely to GameStop and not to publishers? Yes, but I bought my couch used and the manufacturer didn’t try to sell me a sitting pass.

Source: Bloomberg

by Angelo D'Argenio
02/11/2013 11:40AM

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