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Old 03-23-2013, 05:59 AM   #26
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thought this article raised some good points about the used games issue -

Would Microsoft Spring a Trap Card on Sony by Blocking Used Game Sales?

Your assertion is that “If Microsoft blocks used games, then people who buy used games won’t buy a Microsoft console, and Microsoft will lose”. Which sounds true on the surface, but if you actually break down the issue, you’ll find that in such a scenario Microsoft wins. Big.

First, remember that the sale of a console costs the manufacturer money. Second, recall that the manufacturer and Publisher does not profit from the sale of a used game. Basically, a person who only plays used games costs the manufacturer money for the console, and it’s never recovered, that person is not only not a revenue generator, he’s literally an expense.

So what happens if Microsoft blocks used games?

First, Microsoft doesn’t actually lose money. If the person who only or mostly plays used games doesn’t buy MS’s console, MS doesn’t take a loss on the sale. That event alone improves the profitability of the console.

Second, those people go over to Sony. So instead of both MS and Sony taking a share of a population that causes them to lose money, Sony shoulders the entire burden alone. Sony is left trying to recover the losses from only a portion of their customers, while the other portion never ends up being a revenue generator. The more consoles Sony sells, the more money it loses. Selling 20 million consoles isn’t all that great when only 5 million of them are ever going to generate revenue for you. In contrast, if MS sells 5 million consoles, all 5 million of them will generate revenue and recover the loss of the sale.

Third, Publishers will do to Sony what they do to the PC. Staggered releases and/or barebones releases. If the Publisher sees it can get revenue from 100% of the sales on the 720, and only a percentage on the PS4, they’ll very quickly make sure that the PS4 release is weeks behind the 720′s in order to “Encourage” people to buy it on the 720.

Over a period of a few years, Sony will have massive problems as it shoulders the entire burden of used gamers who never generate revenue, and Publishers who see it as a “Freeloader” platform.

People keep making the mistake of thinking that Microsoft’s making a mistake, when in truth, they’d be making a brilliant move that would end up killing Sony.”

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