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Will Next-Gen Consoles Block Used Games?

Rumors of a next-generation console that blocks used games have been swirling for months now, with reports suggesting industry heavyweights Microsoft and Sony will implement such measures in their future-generation consoles. For now, these are unsubstantiated rumors. But could they become reality? Could the PlayStation 4 or the Xbox 720 boast features that will stamp out used games?
Would you support a next-gen console that blocks used games?
To answer that question, GameSpot sought the counsel of several industry analysts from a range of professional firms, whose job it is to make educated and reasoned prognostications about the future of electronic entertainment. Uniformly, these individuals said a next-gen console with such a system would be unlikely.
Now that the analysts have weighed in, what do you think? Let us know in the comments section below!

Michael Pachter - Wedbush Securities

"There is a ZERO chance that the console manufacturers will MANDATE that used games cannot be played. That means there is a zero chance of no disc drive, and a zero chance that they will require games to be registered to specific consoles, eliminating the possibility of used games being played. It doesn't make economic sense for either of them (I'm leaving Nintendo out of the discussion) to do so by themselves, as it would concede a pretty significant marketing advantage to the other: If Sony did this unilaterally, Microsoft would exploit that fact and advertise their console as the consumer friendly alternative, and vice versa."
"Yes, silly rumor that has been blown out of proportion" -- Pachter.
"There is some potential that the consoles will ALLOW PUBLISHERS to sell discs as licenses, and require a code. That would make the publisher the bad guy, and games published by whichever publisher chose to require a code would not be able to be re-sold. I think that has a meaningful chance of happening, but don't think that there is a groundswell movement to have all games converted to a license format (similar to Windows and Office software). I think that one publisher commented to a gaming website that they thought the consoles would allow this, and the uninformed game journalist ran with it as if the console manufacturers would block used games."
"Yes, silly rumor that has been blown out of proportion."

Colin Sebastian - Robert W. Baird & Co

"I think it's very unlikely since that would be a perfect opening for a competing platform to gain an edge with core gamers. In addition, the console holders need retail to sell their hardware. Much more likely is that both digital and physical copies of games will be sold and disks can be traded. By the way, these same rumors always surface before console launches, and they are always wrong."

Doug Creutz - Cowen & Company

"One rumor that has been reported in the press is that the new Xbox may not contain a disc drive. This has been interpreted as potentially suggesting that all games would be download-only; tangentially, this would appear to be a major threat against the used game market."
"However, the notion of a digital-only console seems unlikely to us, for a few reasons. First, successfully eliminating the used game market would severely impact GameStop's business model, potentially putting the company out of business altogether. We believe that, on the whole, the console manufacturers and software publishers view GameStop as a valuable and important part of the video game ecosystem, despite some of their issues with used game sales. Second, and probably more importantly, we believe it would be incredibly risky for Microsoft to take away gamers' access to the used game market given the potential for Sony not to follow suit. If Sony retained physical media while Microsoft did not, we believe Microsoft would risk giving up all of their hard-won share gains during this cycle, and then some. Given that Microsoft's overall objective is to control the distribution of content through the living room, rather than maximizing margins on the next Halo title, we doubt the company would take on this risk." 

"However, we do think that there is possibility that Microsoft could be targeting a cheaper physical media solution, potentially one which includes both physical and digital distribution components. With cloud storage, we can also envision Microsoft shipping its next console with a very modest hard drive, or potentially even no hard drive at all. Given the potential to minimize or eliminate these two components, and our belief that the increase in console processing power this cycle will not be as great a leap as in previous cycles, we believe it is possible that Microsoft's strategy is to release a new console at a much lower price point than the $400-plus level that characterized initial pricing for the last console cycle (Wii excepted). This could lead to far faster consumer adoption of the new consoles; if Microsoft additionally releases its new console a year ahead of Sony, it might be able to build a formidable market share lead before Sony even gets out of the gate (and force Sony to price its hardware more cheaply as well). We think this scenario would be highly bullish for the software publishers, as more rapid new-generation console adoption would mean a shorter period of console transition disruption to software sales."
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