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PS4 pre-owned block backlash - GameStop stock falls but analysts cast doubt

Ben Parfitt
PS4 pre-owned block backlash - GameStop stock falls but analysts cast doubt

Shares in global video games retailer GameStop fell seven per cent on news that Sony may be moving to block pre-owned games on the PS4.

A patent was unearthed yesterday showing freshly filed tech that would see Sony consoles tagging game discs as used. Thus when they are put into another system Sony is then artificially able to limit what content gamers can and cannot access.

While Sony believes this would lead to long-term gain for both itself and publishers, the move will likely leave both consumers and retailers very nervous.

Cutting pre-owned software out of the equation would result in increased expense for consumers and a potentially fatal decline in revenue for retail. Used games, for instance, accounted for 46 per cent of GameStop’s profits in its last fiscal year.

GameStop and GAME execs are likely on the blower to Sony right now seeking reassurance and attempting to stop any such move. Sony’s decision is this – will the perceived increase in profits (as a result of not losing revenue to pre-owned) offset the damage caused by a significant dip in retail support?

And none of this takes into account any possible backlash from consumers, and that’s something which is concerning US analyst Michael Pachter.

“This patent reminds me of SOPA,” Pachter stated, according to Eurogamer. “And if Sony puts the technology into the next PlayStation and any publishers attempt to limit the playing of used games, I expect the consumer backlash to be similar.

“Sony would be materially hurt if its console blocked used games and competitor consoles from Microsoft and Nintendo did not. The Wii U is already on the market with no used game prohibition, and we believe that Microsoft would take advantage of Sony's prospective decision to block used games by marketing that its own next generation did not block used games.

“If we are right, consumers would favour the console that provided more choice, leading to loss of market share for Sony's console and a benefit to Microsoft's.”

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Tags: pre-owned , block , shares , playstation 4 , PS4 , gamestop , Market Data , backloash

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