Sony Patent Hammers GameStop Share Price

[Damien Granz]

Sony Patent Hammers GameStop Share Price

Speculation about Sony's effort to put the kibosh on the used games market has taken a toll on GameStop.

The internet worked itself up into a pretty good lather yesterday in the wake of news that Sony had filed a patent [http://www.escapistmagazine.com/news/view/121331-Sony-Patents-a-Way-to-Sabotage-Used-Game-Market] on technology that would prevent games from working in any console but the original buyer's. The obvious use of such technology would be to close the door on the pre-owned market, but while Sony hasn't indicated whether it will actually use the tech in the next PlayStation, the widely held assumption seems to be that it wouldn't clear leather if it wasn't going to pull the trigger.

Either way, speculation about the potential impact on the used game market caused GameStop's share price to tumble by $1.67 over a single day, from a high of $25.67 to a low of $24.00 on January 3. The share price has since climbed back to over the $25.00 mark, but the sharp drop illustrates GameStop's heavy dependence on the pre-owned market. The retail videogame industry may be a dying beast anyway but the elimination of used games would sound an almost immediate death knell for the company.

Not that it's very likely to happen, according to analysts including Michael Pachter. "Sony is on record as saying that it has no desire to limit consumer choice," he said in an investors note. "Our more rational view is that Sony intends to put the ID matching technology into its consoles to provide individual publishers with the ability to block the playing of used games. The news has negatively impacted GameStop shares, and we think the reaction is overblown."

Source: GamesIndustry [http://www.gamesindustry.biz/articles/2013-01-04-sony-patent-speculation-leads-to-gamestop-share-drop]


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Ah, so believing Sony would block used or rented games from playing on a new console is "overblown" because Sony merely intends to enable others to do that same thing.

What.

 

[Eclipse Dragon]

snip

Well, the reason for high price points on digital retail is actually because of stores like Gamestop.

They refuse to be undersold on any platform or store, so if they get wind that a title is going to be sold for like 40 dollars while they would sell it for 60 dollars, they will refuse to stock said title.

Most publishers will not take this risk because they rely on gamestops clientele more than they rely on digital customers for the moment.

Now, if they wanted to make this system really good they would also release a digital store front that sells games 10-20 dollars cheeper, then gamestop will get screwed on both ends, they cant resell the games, and the publishers and such wouldnt even need gamestop.

That makes sense, so why don't they?
I'm just curious to hear what you think.

 

[Falseprophet]

So sony doesn't want to "limit the customer choice", it only wants to give individual publishers means to limit it?
This either makes 0 sense or has been quote-butchered to oblivion.

Third Stratagem [http://en.wikipedia.org/wiki/Thirty-Six_Stratagems]: "Kill with a borrowed knife."

 

[Zer0Saber]

The number of Sony patents that are never used is staggering. Sony mainly wants all these patents just so they can sue if someone else uses them.

 

[Sylveria]

Didn't we have the same thing right before the release of the PS3?

Yes, yes we did.

I can only imagine how publishers will exploit this if its implemented. No reason to even drop the price of games and they can jack the price up as high as they want since there is no competition from used games. Wouldn't surprise me at all if some of the bigger AAA titles started carrying a $100+ price tag on launch.

 

[Sylveria]

If only customers could buy games in some form that can't be resold possibly some sort of "download" formate. And they use the money they save cutting out retailers and the cost of packaging to make the games cheaper so more people would buy their games and not have a reason to buy used games altogether.

Except when the price of those download games doesn't actually go down, because game companies complain that the price of games is too high, but think the games their company in particular makes/ publishes are the only games to justify the high price tag. Download games on consoles very rarely drop in price, if at all.

Well, the reason for high price points on digital retail is actually because of stores like Gamestop.

They refuse to be undersold on any platform or store, so if they get wind that a title is going to be sold for like 40 dollars while they would sell it for 60 dollars, they will refuse to stock said title.

Most publishers will not take this risk because they rely on gamestops clientele more than they rely on digital customers for the moment.

Now, if they wanted to make this system really good they would also release a digital store front that sells games 10-20 dollars cheeper, then gamestop will get screwed on both ends, they cant resell the games, and the publishers and such wouldnt even need gamestop.

I find Gamestop to be ridiculously over-priced in almost every situation. I can count on one hand that I've been able to find a game in what I consider acceptable condition at Gamestop cheaper than Amazon, Ebay, or digitally. In these cases, its only because its some relatively obscure game and Gamestop likely wasn't aware of the actual value of what they were holding.

Maybe I'm in the minority, but I do about 95% of my game purchasing from Amazon since it is almost always far cheaper than Gamestop, especially when I'm buying used. Heck, often I can find a brand new copy of a game for maybe only a dollar or two more than Gamestop wants for it used. Only in the rare occasions that the Gamestop exclusive pre-order bonus is something I want do I go through them or when I'm wandering around the mall and get something on impulse and the later is extremely rare because of the piss-poor condition most used content out of Gamestop is sold.

I'm rather staunchly opposed to the idea of digital game distribution.

 

[Aiddon_v1legacy]

I fully expect a system to BOMB if this happened.

 

[Eclipse Dragon]

I find Gamestop to be ridiculously over-priced in almost every situation. I can count on one hand that I've been able to find a game in what I consider acceptable condition at Gamestop cheaper than Amazon, Ebay, or digitally. In these cases, its only because its some relatively obscure game and Gamestop likely wasn't aware of the actual value of what they were holding.

Maybe I'm in the minority, but I do about 95% of my game purchasing from Amazon since it is almost always far cheaper than Gamestop, especially when I'm buying used. Heck, often I can find a brand new copy of a game for maybe only a dollar or two more than Gamestop wants for it used. Only in the rare occasions that the Gamestop exclusive pre-order bonus is something I want do I go through them or when I'm wandering around the mall and get something on impulse and the later is extremely rare because of the piss-poor condition most used content out of Gamestop is sold.

I'm rather staunchly opposed to the idea of digital game distribution.

I to buy most of my games on Amazon, but sometimes (very rarely) Gamestop can provide a good deal. Fire Emblem Shadow Dragon for example is running on Amazon for $38.96 used (the lowest price), that is in "acceptable condition game only", The used price at Gamestop is $19.99 (also game only), That's a pretty hefty price difference. If I wanted to purchase Shadow Dragon and there was no way I could possibly get the full package (game, manual and box) for a decent price, Gamestop would get my money in this case.

I was fortunate enough to buy Shadow Dragon before the price skyrocketed too high, I went to Gamestop to buy it at the $19.99 price tag and asked them why they didn't keep boxes for DS games, since I prefer to have the box. The employee told me "If I wanted the box, I could look online, but I'd most likely pay twice as much for the game." To that response, I left the store, looked online and found the game, manual and box for only slightly higher than the Gamestop asking price for the game only.

 

[GonzoGamer]

Sony's shares dropped a bit too.
What I'm still not sure about is if it would completely halt anything but a demo play on the disc or is this their way of making the online pass thing a standard "feature?"
Either way, it seems that Sony's R&D would better use their resources to make a console that works well and is supported well rather than to squeeze a few more pennies out of a consumer base that can't/wont spend a lot.

in comparison between this and the online pass: the online pass is an additional $10 whenever you buy a used game that requires one, this is saying that you essentially only buy the game used "as a demo" otherwise it will lock the game out.

we are also not talking about squeezing pennies we are talking about squeezing the full retail price. technically with this system in place the depreciation rate of video games would diminish to non-existent, or extremely lower. because by having a used version of the same thing next to/near the new thing actually causes the value of that new thing to depreciate instantly (why should I pay $60 for something when I can pay $55 for the same thing just used). with this in place that used copy does not exist so game prices need not go down as much over the lifetime that the game is on the market. not to mention when a store needs more copies they "must" purchase them from the distributor.

then on top of all that those people who depend on trade-in value to purchase new games will basically be unable to purchase them.

Also, I feel like they're under the impression that if they were able to stop used games completely, that the people who bought used would all of a sudden buy the same amount of games, but just new copies. I think there would just be fewer games sold overall and/or more pirating going on. I used to buy used games because I didn't have much money (you saved more than $5 back before Gamestop gouged the market) and if I for some reason wasn't able to buy used, there are a good many new games I wouldn't have bought either. At that time all of the new games I bought on day 1 were follow ups to great games I bought used.

 

[Tanis]

I love how gaming 'journalists' keep claiming the death of physical games.

Like EVERYONE has access to downloading a GB/second.

When I can no longer OWN a game, I'm out.

I see NO REASON to continue spending money on a HOBBY where I don't actually OWN the property.

 

[bloodydom666]

Sony screwing over their consumers..? That's nothing new ..

but if some one was to screwing over sony Lawyer's so they can't work in law
that will stop them from trying

 

[Jumplion]

I'll say what I said before, the optimist in me would like to think that this system could be used to streamline the distribution of DLC does and the like. The console would be able to tell if the game is brand new or if has been used before, and through that it can generate a code for the extra DLC that new games come with (pre-order bonuses and such), or the online pass that some companies do if the game is used.

Of course, that's being extremely optimistic.

 

[mysecondlife]

Sony what means more to you?
The millions in sales you WON'T lose because people who buy used would most likely never purchase the game at all?
OR the millions you WILL lose by alienating your customers?

EDIT: wrong quote. Apologies.

 

[mysecondlife]

Not that it's very likely to happen, according to analysts including Michael Pachter. "Sony is on record as saying that it has no desire to limit consumer choice," he said in an investors note. "Our more rational view is that Sony intends to put the ID matching technology into its consoles to provide individual publishers with the ability to block the playing of used games. The news has negatively impacted GameStop shares, and we think the reaction is overblown."

So sony doesn't want to "limit the customer choice", it only wants to give individual publishers means to limit it?
This either makes 0 sense or has been quote-butchered to oblivion.

Maybe it means used games published by Sony won't be affected while games published by EA will be?
--
Still too early to panic. Just going to wait and see what happens.

 

[008Zulu_v1legacy]

"Sony is on record as saying that it has no desire to limit consumer choice

Maybe I am the only one to remember, but didn't Sony say "Sure you can install Linux." Then took that choice away?

 

[Souplex]

Damn it Sony!
In your attempt to keep control of your ideas, you're hurting the people who help everyone.

 

[Cecilthedarkknight_234]

Am I the only one here that likes game-stop here?? I know that there are lot of crappy ones out there however this is based on store by store bases. Thankfully my 2 local ones are run by halfway decent/competent people that actually know what they are doing and even slide by letting buy some ps1 games under the table such as dragon quest 7 and star ocean II.

 

[Strazdas]

while i personally disliek gamestop and want it gone, i realize that it is a necessary evil in our gaming culture.
and here we have Sony patenting technology of greed that shouldnt even be legal doing actual real damage to another company. its time to sue sony, maybe even in class action?

I love how gaming 'journalists' keep claiming the death of physical games.

Like EVERYONE has access to downloading a GB/second.

When I can no longer OWN a game, I'm out.

I see NO REASON to continue spending money on a HOBBY where I don't actually OWN the property.

so your out 5 years ago? because all you "own" now is a license to play the game for indefinete period of time or till they change your mind. you dont own the actual content.
everyone has at least some internet speed, and while im sorry about you americans being stuck in 90s, the world has moved on and majority has over MB/s. you dont need GB/s, with 1MB/s you can easily download a game in a hour or less, which is sitll less time than it takes you to go to the store and buy it, not to mention the convienience.
so you never been to amusement part? theater? concert? or do you own all of them?