GameStop's shares fell six percent on rumours from EDGE that the Xbox 720 (or whatever it's ultimately called) will block used games. This isn't the first time this has happened, a similar rumour surfaced sometime ago about the PlayStation 4 which is likely to be revealed later this month.
As I argued in relation to that round of speculation - and at this point everything you read about next generation consoles remains purely that - there is little reason to suspect that this feature exist in on either Sony or Microsoft's next system.
History plays a role here, all the way back in 2005 it was suspected that the PlayStation 3 would not allow users to play second hand games. We all know that didn't happen. Sony went so far as to patent a block on used games but they never implemented it and there's reason to Microsoft would either. The market would destroy either company that did.
The only likely scenario in which a block on used games comes into effect on next generation consoles is if it happens on both of them. If either Sony or Microsoft are naive enough to implement such a feature on their own they will simply drive customers into the arms of their competitors. If they are 'evil'enough to do it together then they risk players turning (most likely) to PC.
Of course PC and Steam gaming have had their own mechanisms for preventing the playing of used games for many years yet piracy remains a viable (if questionable) proposition. The extent to which piracy is an issue can be highlighted by the fact that sales of The Witcher series would stand at 9.5 million units rather than 5 million were it not for illegal downloads or least somewhere in between.
There is also the law to consider. Last year the Court of Justice of the European Union (Europe's highest judicial body) ruled that consumers cannot be prevented from selling their used media, including digital media. In fact Valve are being sued in Germany right now for preventing people from reselling their games.
The ruling, and its impact, will take many years to be implemented and realised yet it is hard to imagine a situation in which console owners are banned from reselling their content in North America (or elsewhere) but permitted to do so in Europe.
The practicalities of such a dual system would be difficult to implement, not to mention deeply unfair.
There's also the very obvious fact that it would be terrible PR for whichever company (or both of them) that decides to implement such a block. This may seem obvious yet the potential ramifications could be massive, it would be difficult to convince gamers to come back your system after denying them the right to play secondhand titles.
Would this be enough to force one (or both) firms out of the console race? It's impossible to say, yet the potential damage to their balance sheet would be severe. Keep in mind that consoles are incredibly expensive to develop and usually sell for a loss, at least initially.
Console manufacturers want to get people to buy their systems and purchase software to make a good enough turnover until economies of scale and more efficient designs are achieved allowing for a lower console entry fee. It's notable that the bulk of the PlayStation 2's sales came after that system dropped below $200, a ban on used games in the PlayStation 4 could do a great deal to extend the life of the PS3 (similarly with the Xbox 720 and the 360).
So it seems for now at least that we shouldn't expect either the PS4 or the Xbox 720 to carry a block on used games. That doesn't mean such a feature is beyond the realms of possibility but it is unlikely. We should know more come February 20th when Sony are (likely) to give the world a glimpse of next gen however.
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