Retail: ‘Xbox 720 always-on connection must not happen’

Reports claim the Xbox 720 may use an ‘always-on’ connection to prevent players from using second-hand games – and it’s not sitting well with the High Street.

We spoke to several retailers – both national and independent – to find out what impact the rumoured technology would have on their business and sales of the console itself.

Christopher Rogers
Category Manager – Games, Dixons Retail

A console that blocks pre-owned titles would have no impact on our business as we do not sell trade in games.

Having said that, I do not think the UK broadband infrastructure is robust/fast enough for this to be a prerequisite.

Surely last month’s teething troubles with SimCity are a warning for this?

Don McCabe

It would seem Microsoft is building in elements that could be used positively: games updated automatically, reduced load times, reduced piracy.

On the plus side, optical discs will be used for distribution so retail will still have a part to play. However, if elements are used to block second-hand and force gamers to pay more overall to play then this is a negative. ‘Always-on’ can work well for those who have that facility but even in the UK we still have a lot of customers who don’t have a broadband connection.

It could be that Microsoft has decided that customers who buy second-hand and are not connected are not profitable customers, and it would be more profitable to have a much smaller market with users who are willing to pay for entertainment and who spend constantly online.

Block second-hand and force a constant connection and the market will shrink rapidly, but Microsoft will still make a profit. As for the rest of us, tough titty.

Robert Lindsay,
Managing Director, Games Centre

If Microsoft incorporates the tech to lock out pre-owned games and Sony doesn’t then there is going to be only one winner in the next generation of consoles – and it won’t be Microsoft.

The publishers are completely out of touch with their consumers if they don’t understand how important pre-owned is in helping them fund new releases. It’s not rocket science to see that a 39.99 new release with no sell-on value will put a massive hole in consumers’ spending budgets.

Retail is struggling. This will create an even quicker decline.

As with all games retailers, this would have an impact on our business, new margins are too small to rely on exclusively, hence the reason why we have steadily diversified our product range.

I remain optimistic that the rumours will remain just that, and Microsoft and Sony will make the right decision for the industry.

Steven Doyle,
Manager, Games Dojo

It all depends on what the PS4 does. If Xbox doesn’t allow pre-owned and the PS4 does – it will kill the Xbox. Customers have been unhappy with rumours about blocking pre-owned games and publishers using online codes.

If the Xbox 720 is locking out pre-owned games, we wouldn’t be happy about that at all and it certainly wouldn’t help us. Not all of our customers are online and not everyone is on the internet so that could damage it. In the UK, our internet infrastucture is way behind the rest of the world and if a game cuts out, that will upset people.

Paul Whitfield,
Owner, Excite Games

Blocking pre-owned would be a bad thing. It would have a detrimental effect on both the consumer and us. The PS4 doesn’t appear to be stopping it, so I think people will be more likely to buy that than the Xbox.

We don’t make that much on new games, as the supermarkets have devalued new titles. We make most of our money through pre-owned.

I put a post on our Facebook page a while back about this and most of the feedback from consumers said that if that’s the case, they wouldn’t buy the next Xbox.

Chris Muckell,
Managing Director, Xpress Games

Preventing second-hand sales would be a big dent for Microsoft and will push people to the PS4. Pre-owned is, like many stores, our biggest seller, and whilst we would evolve and adapt to the changes in the market, it would be a big dent to Microsoft’s sales.

Most of it was all expected, but if it does mean an end to the second-hand trade on Xbox, and assuming PS4 still has a second-hand market, I can see a massive migration from format to format.

I think the effect on retailers like ourselves is overstated, though. There’s still a good market in the PS2 after all these years, so PS3 and Xbox 360 still have several years of life left in them, as will the new formats.

We – and other indies – will find the best way to profit from the new methods. Things will change with the product and the distribution, but we’ll change with it.

However, I do think – assuming everything we’ve read is true – that this could be a big failure from Microsoft if they exclusively adapt that route of distribution and online activation.

Pre-owned games fuel the entire new market. GAME’s entire new business plan is based around the pre-owned market with their ‘trade in a selected title and get a new release for pennies’ offers. Microsoft needs retail.

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