How Microsoft’s “No Second-Hand Games” System Gives Sony The Upper Hand

If Microsoft are to lock games down to a single user and require an always-on internet connection, then Sony have everything to gain from what has to be a considerable misstep from Redmond that’s likely to cost them a good share of the next-gen pie. It sounds almost ridiculous – copy protection gone too far – but that’s what rumours are suggesting today.

But first, some balance. Whilst the sources are apparently solid (“we’re confident they are,” Edge tell us) I’m still struggling to consider that the two main factors – tying a game to one individual and needed a constant green light from your router – aren’t just options available to the publisher or developer. Like region locking, for example.

Surely Microsoft isn’t crazy enough to enforce such systematic restrictions on every Xbox 720 game they rubber stamp. I can’t see that happening.

Yes, the mechanics are simplistic enough – the game box will come with a redemption code that’ll be typed into Xbox LIVE and then the game will be locked to that user – and I can see how this is a natural (unnatural?) extension of the Online Pass system that permeated this current gen, but surely they’re not expecting consumers to just roll over and accept this?

And whilst I appreciate that publishers and developers may well have been requesting such a feature since games were first sold, these aren’t 69p iPhone games (which at least fulfill one of the two protection measures, although apps can be shared between five devices) and they’re not Steam games, titles that are regularly subjected to almost laughably irresistible sale discounts. We’re talking £50 full-priced games, games that you won’t be able to trade in once you’re done.

Microsoft’s last E3 press conference lacked a little of the wow factor. Hopes are high that this year both Sony and Microsoft will step it up a notch.

Think of the recently recovering GAME (and its US counterpart, GameStop, which sees pre-owned games making up nearly 28% of all sales and 48% of profit) – pre-owned sales are vital to the infrastructure of the high street chain and this won’t be good news for them. Indeed, GameStop saw its shares drop dramatically today following the news – if this is true this’ll hit hard, and not just with the retailer, the end user will simply not be able to buy games if they’re not brand new.

At least, not Xbox 720 games.

Of course, we don’t know the technicalities of a system that is still yet to be proven to be true, or at least as comprehensively widespread as Edge seem to think. There’s enough conjecture to warrant caution, but there’s also unanswered questions: could another user simply ‘buy’ another license (like you can with an Online Pass) from Live for a reduced fee, for example. Even with that in mind, though, the second hand market will suffer greatly.

And that’s without mentioning game rental companies, who’ll be hit harder than anyone else if this comes to fruition. Nobody is going to splash out on a user account license for a game they’ll only have for three days.

Then there’s the other angle – the requirement of an internet connection at all times. That’s fine for the majority of Xbox 360 users – figures point to approximately 80% of console users having an internet connection – but what happens when that connection goes down, either by the end user or the service itself? Look at Ubisoft’s similar attempts: they scrapped their always on DRM last September. Presumably this DRM is to ensure that the game isn’t being used by a third party, but it does seem like it’s not going to be met with much enthusiasm.

Sony is expected to reveal its next gen console on the 20th of this month, just two weeks away.

And Sony? For all Sony’s faltering over the years with the PS3, the company has stayed true to providing free online play for the system (and, of course, for the PSP and PS Vita) and their recent push towards PlayStation Plus indicates that they’re really trying to ensure their customers have plenty to play. Doing everything right? Perhaps not. But in the face of these rumours, Sony – unless they follow the same path – will look nothing less than saintly.

And let’s be honest – if Microsoft’s hand has been forced by publishers, surely those same publishers will want the PS4 to do the same job.

Sony aren’t alien to the idea of locking out second hand games, too. Their system doesn’t require an internet connection, but they do have something – even if it’s just in patent form at the moment. And without being flippant, I’d place doubts over the PlayStation Network being consistent enough just now to have to rely on it being available 24/7/365 to ensure that my game licenses are validated.

There will, naturally, be many other factors that will ultimately all tally up. The relative power of the two systems; the exclusive games available; the price; the controller. But being able to sell on your games is surely right up there.

In some ways, Sony now have this to lose. If they launch the PS4 around about the same time as the Xbox 720, the latter surrounded by what appears to be highly anti-consumer measures, they have to be onto a winner. This single news story will contribute to who comes out on top next gen. That might sound like hyperbole but – if Edge’s sources check out – Microsoft might have played a card they probably wanted to keep up their sleeves a little longer, but it’s still a rotten card.



  1. I doubt, if Microsoft do it, Sony would have a choice. EA etc would just say “Microsoft are offering it, if you don’t, we’ll just keep our games there”. Sony would probably keep it optional then, avoiding it for their own games, but the damage is done really.

    • Possibly, but then if Microsoft do it that would make their console less popular and so it may be a case of EA needing Sony to successfully distribute games rather than Sony needing EA. Undoubtedly Sony will have the upper hand with the market shares if Microsoft go DRM, and the consumers that make that market share are literally the life support of the company.

      • The upper hand will belong to which group can boycott the other the longest. With Sonys financial woes, I think companies like EA have the upper hand since if they boycott the PS4 they also don’t have to spend resources developing for it. Sony on the other hand will lose money with every PS4 sale.
        If both systems say no to DRM the publishers will be forced to give in as the PC market cant sustain these mega-publishers, but without their games, console manufacturers can’t stay alive either when they live from licensing fees. Its a catch 22, but if just one console manufacturer sides with the publishers and DRM, together they just need to buy their time before the othe goes bankrupt.

      • But the amount of people that would want to avoid DRM could be the deciding factor. Many of us seem OK with Steam but even the Big Picture doesn’t offer the least intrusive offline mode. When people sit down to a TV for some gaming they don’t want to be permanently hooked up online.

        EA may seem like a DRM whore but with what they like to charge for games on PSN, they will kill themselves on the consoles with DRM. People are further used to selling their games on with consoles too. Also Sony have showed that they are not willing to sit back and say ‘fine, hack the console’.

      • Sony could have taken on any game company and easily won before 2003, but I don’t believe they have either the resources or market share to go against the grain. Activision and EA aren’t afraid to issue an ultimatum to a console manufacturer. Activision threatened to pull support for the PS3, a move that failed in part because Sony was able to ally itself with EA for exclusives. Activision/MS vrs. EA/Sony is a risky, long, and costly battle, but Activision/EA/SquareE/Capcom…/MS vrs. Sony is an inevitable win.
        Its all about the games and if the PS4 is DRM free it’ll still need lots of games. Theres no point in buying a DRM free console if you cant find any games for it. And theres no point in making a DRM free game if you developing for a console with a low user base. Its a dangerous cycle, one that Sonys already in with the vita. Even if the PS4 is DRM free Sony has to make it profitable to develope for.

    • I kind of agree with you, but the other side of that coin is that if everyone decides to buy PS4 instead of Xbox 720 because of this, will publishers have a choice but to make games for PS4?

      • I see what your saying
        The knowledgeable gamer hates DRM, but what about the people that don’t know what DRM is, the parents, or the people that don’t care. People hate DRM , but they still buy the games. Develpers will side wherever theres money to be made, if they choose DRM and end up losing money I’m sure they’ll change back. But if they choose DRM and make the same amount I can’t see them supporting what they consider piracy. The question at hand though do enough gamers understand DRM and hate it enough to outright boycott a system, can DRM be boycotted to 100%.

  2. I can’t see them doing this, it’ll put them at too much of a disadvantage (providing Sony doesn’t do the same).

  3. Interestingly I just saw on that in their recent poll of ‘worst things publishers do’, 48% said always-on DRM was their most disliked.

  4. It has been rumoured for PS4 too for a long time too hasn’t it?

    I can see it being anti-piracy mechanism rather than anti-preowned, unless Xbox 3 games are going to plummet in price to PC levels & Microsoft adopt an App Store/Steam business model.

  5. I very rarely buy second hand games but rely on this market to buy new ones. If there’s no second hand market the number of new games I would buy would go down at least 30%. Not much for the developers to worry about unless, as I suspect, there’ll be a fair few folk in the same boat.

    At the moment I will buy a PS4 on release day but if Sony do similar I may stick with my PS3 for quite a while.

    • Precisely, I always buy new games and trade some of them when completed. An overriding factor for a lot of purchases (AAA anticipates aside) for me is the few weeks/month bargain bin department which is driven simply by the used games market.
      Some of the games that I buy would never have been given the time of day at full RRP release price so I would imagine that my spends on games would be halved if this madcap idea does come to fruition literally nuking the bargain bin department!

      Barmy I tells yer! :O

  6. Maybe it’s because the 360 suffered from piracy

  7. I think the back of the box for next gen games will be taken up with all the terms of use & rules on using the bloody thing!

  8. If they were actually to do this, universally or otherwise, I’d fully expect them to do so in a much more seamless fashion.

    There are methods to write a barcode in a central strip of a disc called the burst cutting area. It’s something which Nintendo uses to prevent piracy, but could easily be done so that each disc’s barcode is unique and can be logged against someone’s online account and console to make it unusable by anyone else.

    I’d expect them to use that rather than the tedium of typing in codes, especially as it’s something which would effectively hide away the copy protection from ordinary customers.

  9. I used to get excited about console launches…

    Have you seen the graphics!!! OH MY GOD! Virtua Fighter, Sega Rally and Daytona in the living room!!! Can’t Wait

    Tekken Looks MINT! Can’t wait for Resident Evil either! check out those lighting effects!!!

    OH MY GOD have you seen the controller, and MARIO 64! It’s got a 90 megahertz CPU and a silicon graphics chip! AMAZING!!!

    Online Gaming!! Crazy awesome graphics! Look at the funky pad!!! It’s got a built in LCD SCREEN!!! It’s actually better than SEX!!!!

    Playstation 2
    Oh my god! The buttons are pressure sensitive, and it’s got the emotion engine!!!! This bad boy can do graphics like Toy Story!!!! I AM EXCITE!!!
    The PS2 is in fact so powerful that terrorists want to purchase them to reprogram them to guide missiles!!!!!! (Pretty sure i read that somewhere)
    I WANT ONE!!!

    Now it’s…

    Oh the Playstation 4/Xbox 360…
    I heard you can’t play pre-owned games…
    I hope they don’t crap out on me like my launch 360/PS3…
    I might have to wait for the redesign. it will probably break less.
    I hope you don’t have to buy that crappy move/kinect controller with the console…
    I heard they want to make is so you control the games with a sheet of glass as a controller like the iPAD…

    I’m getting a new hobby.

    Cross Stitching?

    • It’s sad. What makes me sadder though is that I’ve only been a part of it since PS2. Feel like I’ve missed out on too much. :(

    • haha well these are rumours. Wait til the 20th to get your next generation fun.

  10. I can’t see it happening, they’d lose too many customers, especially if Sony didn’t enforce the DRM rules. While it may please publishers, it would drive away so many fans that the console wouldn’t sell anywhere near what it would do without the DRM.

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