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Sony patent would "suppress" second-hand sales

Sony patent would "suppress" second-hand sales

Thu 03 Jan 2013 6:46pm GMT / 1:46pm EST / 10:46am PST
HardwareTechnology

PlayStation maker's application details use of RF tags to prohibit playing used games, even offline

A Sony patent application has revived rumors that the console maker is designing its next-generation hardware to be incompatible with second-hand games. As spotted by NeoGAF user gofreak, Sony has filed an application for a patent on a method of blocking used games from playing on a system without an online connection.

The filing says it is "vital" that the creators of games receive part of the proceeds from sales, but in second-hand markets they receive no such compensation. Sony also notes in the application that players who purchase used games are no longer potential buyers, further impacting its sales.

As for how Sony intends to block used games, the patent describes a variety of implementations and specifies the use of radio frequency identification. In one treatment, an RF reader/writer on the system would read data from an RF tag specific to a copy of a game. The system would then check the content to see if it was restricted (if it was tied to a different console, for example) before allowing it to be played.

"As a result, the dealing of electronic content in the second-hand markets is suppressed," the application states, "which in turn supports the redistribution of part of proceeds from sales of the electronic content to the developers. Though in the following description a game application is exemplified as the electronic content, the present embodiment is similarly applicable to various kinds of electronic content such as an office suite, images, and music content."

Analyst firm Sterne-Agee sent a note to investors today after the filing was discovered. According to the group, "Sony's new patent application to block used games, while ominous on surface, is not a done deal and there are many practical considerations that may prevent Sony from implementing it (assuming they receive the patent)."

Speculation that console makers would look to stamp out used game sales with the next generation of consoles first surfaced about a year ago. At the time, analysts were skeptical, suggesting that consumers would rebel. In addition, they said none of the big players in the market would be willing to risk the market share they would lose if competitors opted to allow used sales.

The patent in question was originally filed for in Japan back in April of 2010. Sony filed it in the US in September.

27 Comments

Johnny Hsu Employee, EA

15 37 2.5
IMO, it'd be interesting to learn how many new game sales were funded by dollars from customers selling their games for money/store-credit. As such, customers who buy new packaged goods realize they can sell this game down the road for cash - which helps them rationalize the purchase price.

I think the amount of liquidity afforded by the secondary market contributes quite a bit to new game sales - I wonder if these measures to stop second-hand games will simply contract the market for gaming in general. Or worse, cause a pricing swing where already scarce pricing and margins are eroded.

I think people are resigned to the notion that digital goods have no resale value, but that also fuels the issue where it's difficult to convince customers to pay $1 for a digital/mobile game.

Posted:A year ago

#1

Martin Caine Senior Programmer, TickTock Games

2 1 0.5
I've seen this posted all over the place today but I just can't see it being practical. It would not only stop people buying used games but would also stop friends from being able to lend games to one-another or say a family who has a console in the kids' room and one in the living room from being able to play the game on both consoles.

Posted:A year ago

#2

Alex Bunch Proof Reader, ZiCorp Studios

94 106 1.1
It seems as if Sony is constantly trying to destroy it's own business. No consumer in their right mind would by a console fitted with such a system.

Posted:A year ago

#3

Greg Wilcox Creator, Destroy All Fanboys!

2,193 1,170 0.5
As I keep saying, the more any company tries to restrict freedom by chopping off the used games market, the greater the resistance and chances for that stupid plan to fail. Unless Sony is planning to sell its next generation games for around $20 tops, this is going to hit them hard when they find out just how much it's hated by the masses who want the ability to trade and sell games among each other and not through a retail chain. Telling folks who collect games they can't trade off stuff is kind of stupid no matter the reasoning behind it.

Posted:A year ago

#4

Christopher Bowen Editor in Chief, Gaming Bus

448 694 1.5
Didn't Microsoft put out a design doc that got leaked that went into the same situation?

I mean, by all means, if Sony wants to lock (more expensive) physical product to one system, forever, and turn used and new systems alike into useless plastic, then go for it. All that will do is send more people to tablets and phones, where the rights are just as bad but at the very least everything's cheaper.

EDIT: It's also possible that this patent was made to keep the patent trolls away.

Edited 1 times. Last edit by Christopher Bowen on 3rd January 2013 8:01pm

Posted:A year ago

#5
"Taxi for Sony!"
Seriously, we know that the executive team at Sony JP are incredibly unhappy - seeing decimated sales across the board and a feeling that the customer has abandoned them. It is no surprise like a selfish child that they would try and chastise the public - imposing stupid restrictions on paid for content usage - or through restricting usage of online services. I think Sony will not forgive the US and UK audience for complaining about and abandoning their more usual business moves. If they do undertake the advice from their brains trust of past 'experts' that a 'constantly connected', 'restricted usage' PS4 platform is the way forward... then good bye Sony, been nice knowing you.

Posted:A year ago

#6

Greg Wilcox Creator, Destroy All Fanboys!

2,193 1,170 0.5
if anything, what's going to kill the console off is "contract" gaming and a lack of choice in how content can be bought and sold. Sometimes I think some suits have lost their minds by chasing one big model for everything while taking away the pop in and play a damn disc thing that many users still want. Sure, you can throw up sales figures and charts all you want about digital sales and how many billions of mobile games have been downloaded, but at the end of the day, the more people who feel as if they're being forced into something that's a pain in the ass to use, the more will indeed walk away at some point.

People I know who play mobile and tablet as well as console games hate a lot of the process in getting them and yes, turn to certain types of console or PC games for a less annoying experience. Of course, that's changed to become a worse deal over time as DLC, patches, mandatory updates that take functions away and add more restrictions and other dopiness that make it a longer process to get into a game and play are making them dislike much of what's trumpeted at a success today.

But hey, whatever - lock stuff to a console, make it harder to shift data when/if that console breaks down/is replaced or given as a gift and see what happens. I have the feeling that both Sony and Microsoft are in for a little surprise if they try to restrict everyone and thinks they'll all play along.

Posted:A year ago

#7

Sam Maxted Journalist / Community / Support

155 65 0.4
If Sony implement this, they'll guarantee I don't buy their next console. The 'used games' issue needs to be tackled at retail rather than targetting consumers:

Step 1: Publishers give retailers a discount on new titles in exchange for a percentage of revenue from used sales.
Step 2: There is no step 2. It's that bloody simple.

Good for consumers, because: Could lower the cost of new titles.
Good for publishers because: They no longer need to worry so much about second-hand sales if they're making some money on those too.
Good for retailers that sell new games as well as 2nd-hand because: Takes off the pressure from publishers regarding 2nd-hand sales, as well as receiving lower wholesale prices on new titles.

Posted:A year ago

#8
So if you buy digitally, its locked to an account... but if you buy physical, its locked to a machine? Doesn't seem plausible or possible to me (unless its designed to kill retail).

Even if Sony decided to lock physical to an account, this implies online/internet is required/arbitrary (before even starting a game) - which seems insane to me. There are still plenty of people who play offline, for a good reason.

They would be better off completely dropping physical media, and saying digital only (and there may be a digital-only version of their next console).

Still ... if the games clock in at 30GB plus... downloading is gonna be fun! :P

Looks like Sony's finishing move - Harakiri.

Posted:A year ago

#9

Andrew Animator

148 158 1.1
Locking to a console seemed like a crazy choice to me at first, especially compared to account locking. But, if it is tied to the console it does get around the issue of multiple people in the same house wanting to play the same copy of a game using different accounts.

You can't lend it to anyone which is the main problem, but I am left thinking that I can't lend my steam games to my friends and that doesn't really bother me. If my steam games were physical would it bother me then? ...I'm not sure.

It would also kill off any form of renting games no matter what they did.

Either way there must be a better way to fix the pre-owned problem. Forcing retailers to share a fixed percentage of pre-owned sales with the developers/publishers would work, but I can't imagine that would ever happen.

Edited 3 times. Last edit by Andrew on 3rd January 2013 10:40pm

Posted:A year ago

#10

Andreia Quinta Creative & People Photographer, Studio52 London

224 590 2.6
"Forcing retailers to share a fixed percentage of pre-owned sales with the developers/publishers would work,"
Doesn't need to be forced, just enticed. An example would be publisher Y saying: Give us X% of your used games income, and we'll ship you our new titles with a Z% discount.

I'm still curious to see if they patented this to stop other companies from using it (although I'm sure they can find a work-around) or to use it them selves. It will be another shot in the foot if it's the later, I mean, Sony's been killing it self constantly for the past years. Pricing on TV's/Laptops, The Blu-Ray/HD-DVD war, the PS3 Launch, the Move, The PSP Go, the Vita with it's proprietary memory cards/price/titles. It's quite a show of masochism in my opinion.

Edited 1 times. Last edit by Andreia Quinta on 4th January 2013 12:07am

Posted:A year ago

#11

Paul Jace Merchandiser

935 1,410 1.5
On the one hand, Sony has already implored a similiar technique during this gen with the PS3 game DC Universe Online. Once you load that game up on your PS3 it will never work on another system again and becomes completely useless if you ever try to sell/trade/get rid of it. But from what I have heard that is the norm with console mmo games.

So I'm not that surprised that the tech is there if Sony want to use it. However, doing so across the board on all PS4 games would be beyond foolish unless Microsoft follwed suit, which I doubt they would as this would give them even more market share in the console race. Instead of the normal 40% they have had for most of the last year in the US they would now easily have 60-70%.

Someone also made the comment that this move would cause more people to go to tablets and mobile gaming. I actually don't agree with that. If someone is use to console gaming they are likely to stick to that, and as such this move would cause many potential PS4 buyers to get a 720 or a Wii U instead. Outside of the truely Sony faithful I can't see how anyone could purposely support Sony in this by buying such a restricted console.

Posted:A year ago

#12

Ged McMillan Retail Manager

15 6 0.4
Haven't we already seen them implement this technology just last November and probably in the way that they intend rather than the pitchfork-articles are suggesting....? I'm referring to the release of Playstation AllStars Battle Royale & the 'disc benefits' system that is in place, where by the first user to select this option gets to download the Cross-buy Vita version but subsequent owners/users do not have this 'extra' in a different console. I would think it could work as a means of validating 'online pass' as well or other 'first owner' benefits. Either way, I won't worry about the speculated suggested motives above just yet given the same story ran in the months leading up to the PS3 launch & proved to be incorrect.

Posted:A year ago

#13

Sam Maxted Journalist / Community / Support

155 65 0.4
An example would be publisher Y saying: Give us X% of your used games income, and we'll ship you our new titles with a Z% discount.
So pretty much what I said above, then :)

Posted:A year ago

#14

Alex Bunch Proof Reader, ZiCorp Studios

94 106 1.1

Posted:A year ago

#15
Ways to make money from consumer game media:

- Lock the game to a single machine and charge a single price
- Lock the game to a single machine charge a running subscription for unlocks and features
- Sell a digital or retail products on limited number of play, charge for extension
- Sell a online pass to access and play game on selected (single) machine
- Allow free access and play for period, then sell access to continue and unlock game features
- Allow free access paid for by constant advertising or data mining
- Sell a game in a box in a shop! Worry about second hand!! (pay lots of money to console firm for localization!)

Edited 1 times. Last edit by kevin williams on 4th January 2013 3:58am

Posted:A year ago

#16

Greg Wilcox Creator, Destroy All Fanboys!

2,193 1,170 0.5
Hmmm... I wonder if Sony or Microsoft will also lock Blu-Rays and DVD's to a console as well. Hell, they get sold and traded more than games do in some circles.

Posted:A year ago

#17

Andreia Quinta Creative & People Photographer, Studio52 London

224 590 2.6
An example would be publisher Y saying: Give us X% of your used games income, and we'll ship you our new titles with a Z% discount.
So pretty much what I said above, then :)
Scrolling up a bit, yes, absolutely. 'Stole' your idea without even realizing it. Hei, you should patent that before someone else think about using it! ^^

Posted:A year ago

#18

Alex Bunch Proof Reader, ZiCorp Studios

94 106 1.1
They'd patent the sky and charge us to look up if they could.

Posted:A year ago

#19
Not the sky, not yet. The rain that falls from the sky, definitely:http://www.pbs.org/frontlineworld/stories/bolivia/leasing.html

Posted:A year ago

#20

Craig Bamford Writer/Consultant

40 54 1.4
It's not difficult to figure out that the proceeds from potential resale is built into the cost that consumers are willing to pay for games. It's pretty much Economics 101, actually. It helps defray users' (absolutely justifiable) conservatism at paying a serious sum for an unknown quantity, too.

All this would do is make it that much harder to launch new IPs, reinforce the inherent conservatism of the audience, and drive people into the arms of mobile/PC developers offering free-to-play and freemium experiences. It's a profoundly short-sighted move.

Posted:A year ago

#21

Patrick Williams Medicine and Research

93 61 0.7
I'm just wondering how long it will take before it would be cracked. Not a single firmware feature to this day has survived hackers.

Edited 1 times. Last edit by Patrick Williams on 4th January 2013 7:51pm

Posted:A year ago

#22

Alex Bunch Proof Reader, ZiCorp Studios

94 106 1.1
Cracked that would be perfectly legal in Australia.

Posted:A year ago

#23

Alex Bunch Proof Reader, ZiCorp Studios

94 106 1.1
RE: Not the sky, not yet. The rain that falls from the sky, definitely:http://www.pbs.org/frontlineworld/stories/bolivia/leasing.html

Makes me feel embarrassed to be of the same species.

Edited 1 times. Last edit by Alex Bunch on 5th January 2013 12:05am

Posted:A year ago

#24

Curt Sampson Sofware Developer

596 360 0.6
Before anybody gets too excited about this, keep in mind that if you think Sony's doing something bad by filing this patent, you're basically saying that they should have either:

1. Not researched this technology at all, or

2. Having done (and paid for) the research, not patented it, running the risk that anybody else who independently invents this could patent it and stop Sony from using a technology they'd invented first.

Once you've developed something that others are likely to figure out, it's insane not to patent it, since that's tantamount to giving full ownership of your invention (even your own right to use it) to someone else. The first point is more arguable, but were I Sony I'd be researching this stuff just in case I needed it, even though I'm in general not in favour of tactics that make life harder for the consumer.

I can think of reasonable pro-consumer uses of this technology too. One would be to give users the ability to convert disc games to download games. The disc would act as a normal disc usable in any system pre-conversion, but post-conversion the disc no longer works on any system not authorized to play that user's games, and the user has the option of using the disc or downloading a copy of the game from the shop. Had technology like this been available and used back when the PSP came out, the PSP Go might have been a lot more attractive to consumers.

Posted:A year ago

#25

Sandy Lobban Founder and Creative Director, Noise Me Up

315 208 0.7
What second hand market. Discs will be consigned to history fairly soon.

Posted:A year ago

#26
Did the EU Court of Justice not rule that reselling of software (including digital) is the right of the consumer, regardless of any End User License Agreement? Surely SONY won't therefore be able to use this tech in the EU?

http://www.edge-online.com/news/what-does-eus-used-software-sales-ruling-mean/

Posted:A year ago

#27

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