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HomeNews GameStop: Consoles Banning Used Games Is Unlikely
In an investor call with Eurogamer, GameStop has flicked away the rumor that any next-generation console will disallow used games. GameStop CEO Paul Raines doesn't see why they would hurt the video game economy with this kind of ballsy move:
This is the kind of news that gets out in the industry and gets people worked up and hyper-ventilating and excited.
We think it's unlikely that there would be that next-gen console because the model simply hasn't been proven to work. Remember, used video games have a residual value. Remember GameStop generates $1.2 billion of trade credits around the world with our used game model. So, consider taking used games out of that, you'd have to find new ways to sell the games.
And, our partners are good partners. The console companies have great relationships with us.
Of course, since GameStop gets money hand over fist with used games, they believe the market for used games don't take away from new game sales at all:
The pre-owned business is not a cannibalistic business. If you follow the popular conventional wisdom, you would think pre-owned is replacing new. The truth is, pre-owned is an opening price-point category. The average price is $18. A lot of it is old generation. What is is is a category for the customer who's maybe not ready to invest in a new game, but wants to get into the console business and console entertainment.
What we've done is create a way for that new leading edge consumer to dispose of their old games, and that's what creates this great circle of life we talk about that so many try to imitate. That's how we see it.
What GameStop excludes is that many people spend used game credit on, well, more used games...
However, I don't see a console that bans used game sales as a smart idea. How would you ever gift someone a game you've played? And what would happen to GameFly? It's just too invasive for everyone, the video game industry included.