OPINION: The end of pre-owned would be a disaster for games

Reports this morning – which it must be said remain totally unsubstantiated – claim that the Next Xbox could incorporate a new technology that blocks the use of pre-owned games on the console.

The gravity of this news, if true, would have industry-wide ramifications. The fallout for retail would be obvious, cutting off a major revenue stream.

But aside from my obvious retail-leaning tendencies, I for one believe that such a development would have disastrous consequences for the games market. Or at least for the Next Xbox.

We all know the arguments against pre-owned. The sale of a pre-owned game sees all profit land with the retailer, cutting publishers and developers out of the loop. For the content creators it is unfair, it is argued. And of course that point has credence.

But what I sometimes struggle to understand is how content makers remain blind to the effect that an end to pre-owned would have on their business.

Let’s look at 2011. Starting with the release of Deus Ex: Human Revolution on August 26th, a run of successive triple-A releases ran all the way through to November 18th. It went something like this:

Deus Ex: Human Revolution, Driver: San Francisco, Dead Island, Gears Of War 3, F1 2011, FIFA 12, Batman: Arkham City, Need for Speed: The Run, Battlefield 3, Uncharted 3: Drake’s Deception, Modern Warfare 3, The Elder Scrolls V: Skyrim, Assassin’s Creed: Revelations and Saints Row 3.

For a punter paying an average of 40 per title that represents an outlay of 560 over the course of a little under three months. That’s 187 per pay cheque. And that’s omitting a shed load of other releases that hit in the period.

Now, when mine and Mrs Ben’s wages are combined we represent something like the UK national average earning family. And I can tell you that there’s absolutely no way I could afford that outlay on games were I not able to offset the cost against trading-in my older titles. No way.

So I’m faced with the very real possibility that I could be priced out of my main habit and interest in the next generation.

So what can platform holders do to offset what I would see as the inevitable collapse of the software market whilst still maintaining a freeze on pre-owned? Well, lower game prices would seem the only option. That string of releases would be far more affordable at 25. Or even 30. But the chances of that happening? Zero.

And what of retail, which is struggling to survive in this current pre-owned rich environment? Lower public outlay can only ever mean one thing – higher prices to try and preserve margins. It becomes a self-perpetuating cycle that spells very bad news for the industry.

Of course, it could mean even worse news for Microsoft. Should Sony decide to not follow suit with anti pre-owned tech then that affords PS4 one hell of a USP over its rival. Although it would be one shared by Wii U, of course (we can safely say that Nintendo would not have the foresight to include such tech in its machine).

As I sit here I’m simply hoping that the reports aren’t true. I was interested to hear Microsoft’s response, which although not commenting on rumour and speculation” was anything but a simply we don’t comment on rumour and speculation”.

"As an innovator we’re always thinking about what is next and how we can push the boundaries of technology like we did with Kinect,” a spokesperson told Kotaku.

We believe the key to extending the lifespan of a console is not just about the console hardware, but about the games and entertainment experiences being delivered to consumers. Beyond that we don’t comment on rumours or speculation."

These are dangerous times. The games industry is approaching a new generation of machines and the decision made by platform holders now will dictate how the sector fares in today’s connected, smartphone obsessed and cloud-hungry society. I just hope those decisions prove to be the right ones.