During a conference call to discuss its latest results, US video games retailer GameStop tried to put to bed a rumor (that surfaced in January) about the next Xbox console from Microsoft would have some kind of anti-used game detection technology in it. GameStop's CEO tried to put the rumor to bed, calling the whole idea "unlikely."
"We think it's unlikely that there would be that next-gen console because the model simply hasn't been proven to work," Paul Raines, GameStop CEO, said. "Remember, used video games have a residual value. Remember GameStop generates $1.2 billion of trade credits around the world with our used game model. So, consider taking used games out of that, you'd have to find new ways to sell the games. And, our partners are good partners. The console companies have great relationships with us."
Raines pointed out that the majority of the $1.2 billion of credit it generated from used games went back into purchasing a video game.
"This is the kind of news that gets out in the industry and gets people worked up and hyper-ventilating and excited," Raines added. "The pre-owned business is not a cannibalistic business. If you follow the popular conventional wisdom, you would think pre-owned is replacing new. The truth is, pre-owned is an opening price-point category. The average price is $18. A lot of it is old generation. What it is is a category for the customer who's maybe not ready to invest in a new game, but wants to get into the console business and console entertainment."
"What we've done is create a way for that new leading edge consumer to dispose of their old games, and that's what creates this great circle of life we talk about that so many try to imitate. That's how we see it," he added.