By: Eddie Makuch
If Microsoft or Sony–or both–decide to block used games with their next-generation platforms, the majority of consumers would not buy them. That’s according to GameStop Chief Financial Officer Rob Lloyd, who defended used games today during a presentation at the Goldman Sachs Technology and Internet Conference this afternoon.
“It’s really only about 4 percent of our used game sales are games that were games released in the last 60 days,” Lloyd said. “So it does not have a big impact on the sale of new product. So that’s why publishers understand how important the preowned business is to them. Sony has said publicly that they don’t intend to block used games in their its next console. Microsoft has refused to or has not commented on the rumors that have hit the marketplace.”
Lloyd further noted that GameStop has conducted internal research on anticipated consumer buying behavior and shared this information with platform holders. This research has shown consumers want control over the games they purchase, he said.
“Consumers want the ability to play preowned games; they want portability in their games; they want to play physical games,” he said. “And to not have those things would be a substantial reason for them to not purchase a new console.”
Asked for a specific percentage, Lloyd said, “I think it’s approximately 60 percent of the customers who have said they wouldn’t buy a new console if it didn’t play preowned games.”
Even if next-gen platforms from Microsoft and Sony do block used games, Lloyd said GameStop will still be able to sell these consoles and adapt appropriately.
“We’ll be able to sell the new consoles that come from Microsoft and Sony regardless of what features they have or what they do or don’t allow,” he said. “We’ll have leading marketshare on the sale of those consoles. We’ll adapt to what it does to the preowned business. And one of the ways we’ll do that is through a continued healthy preowned business for today’s generation of consoles.”
If the majority of gamers would not be interested in a next-gen console that blocks used games, why has the rumor floated around for so long? Lloyd said the preowned business is a tough one to crack; both sides have compelling arguments, he argued.
“There’s two constituencies that the publishers and the console-makers…have to consider. One is the retailer like GameStop that is moving their product through the chain. The second are the development firms that actually develop the games. Developers have historically not liked the preowned game business because they don’t participate in the revenue streams.”
“The publishers really get caught in the middle,” he added. “[The publisher] understands that, but also understands the importance of the preowned game business to the overcall ecosystem of the video game business. And so, I think that as the console makers balance those needs, they consider ‘Is this an appropriate thing to do?’ ‘Would we make more money by doing this in the future?’ I think what customers have told them at this point is they view it as a very unfriendly thing to do.”