E3: Microsoft, Sony unlikely to clarify used games policies

Focus on games and content will still leave many unanswered questions, says Doug Creutz

Microsoft and Sony are unlikely to share any details of their policies for used games on the new Xbox One and PlayStation 4 consoles at E3 next week, instead focusing purely on video game content.

That's the opinion of Cowen & Company's Doug Creutz, who said that both companies have a lot to prove at the annual games show, as they continue to feel the pressure with increased competition from mobile and PC gaming.

"For Sony, the challenge is how to differentiate the PS4 from what Microsoft is offering, given how badly the PS3 has lagged the 360 in Western markets"

It's expected that Microsoft and Sony will charge consumers who buy games second hand to access the content, ensuring the hardware manufacturers and the publishers receive a cut of used games sales.

However, Microsoft's message has been mixed, while Sony has stayed relatively quiet on the subject. While consumers and the press have pushed Microsoft, and to a lesser degree Sony, to lay out their plans, both have been reluctant, leaving many to assume costs to activate second hand games will be high.

GamesIndustry International has been told by Microsoft that it will not be offering press any time with senior executives to discuss the Xbox One business during E3, suggesting it wants to focus purely on games experiences.

"We doubt either Microsoft or Sony will address pricing for current- or next-gen consoles at E3, though we do think there is a chance that Nintendo could announce a (badly needed, in our opinion) price cut for the Wii U in an attempt to steal some thunder," Creutz told investors.

"We also don't expect to hear any official word on what the used-game policy will be on next-gen consoles."

Microsoft's imperative at E3 will be to prove the Xbox One as a video game console, after a big reveal last month that focused on TV, sports and entertainment. Sony's needs to show consumers - particularly in the US - that it has a machine capable of standing shoulder-to-shoulder with Microsoft in terms of games, and differentiate the PlayStation 4 in terms of variety of content and services.

"For Microsoft, the key will be to strongly reach out to the core gamer audience given that its early messaging has been more focused on the Xbox One's capabilities as an all-around media device," said Creutz.

"While we believe a mass market strategy is the correct approach for the long term, Microsoft still needs the gamer crowd to show up on launch day to ensure it keeps the positive momentum it has gained through the latter years of the 360's life cycle.

He added: "For Sony, the challenge is how to differentiate the PlayStation 4 from what Microsoft is offering, given how badly the PS3 has lagged the 360 in Western markets."

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Latest comments (19)

Greg Wilcox Creator, Destroy All Fanboys! 8 years ago
Oh (Big) Brother (Round Too): Look, let me break it down for the suits in the house.

This is like a relationship where the spouse is screwing around and/or has an STD and isn't saying a damn thing about it but thanks to some insane actions is raising enough suspicions until it's too damn late and the former better half is packed and out the door while lighting a match to set the place on fire because of the utter lack of SIMPLE communication.

Consumers want the TRUTH, period. No hem-haw see-saw bullshit. No more "wait and see, tee-hee!" or "dealwithit" crap. Just let us know how much, when, what's in the damned box and if we can get older content pre-purchased on the older systems on the damn new thing as the SIMPLEST gesture of "Oh yeah, I remember you - you spent a few thousand dollars on our content up to now, so here - you can have a key to the mailbox and get it back at some point"

Or something like that.

I surely hope to hot unreal hell this guy is wrong (at least as far as Sony goes). If not - yeah, it's going to be a surprisingly shitty holiday season for a lot of people expecting roses to pour out with those big holiday bonuses they're all expecting for this wool-pulling junk. Especially if there's some real-life crisis in the world that makes people less likely (or able) to want to drop what a new system costs when these folks want us to...
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Klaus Preisinger Freelance Writing 8 years ago
When I look into my crystal ball I see Sony and MS at E3 saying "look at all these sequels/clones with better graphics. Go, be happy now!" Meanwhile every media outlet will mercilessly latch onto any weakness and exploit it for maximum inflammatory responses.

Wasn't it nice when PR was just a full page ad and nobody knew what users were really thinking? Today we got the same type of ads who blindly assume how people respond tossed into communication channels where players actually respond. Surprise, it is not the way PR thought they were going to react. Spindoctoring is dead, as Greg put it, nothing but the truth is acceptable today.

Honestly, games today have a culture of being the supplier of cheap games to other players. You want my copy of GameX I no longer play? I can supply that to you. By going after Gamestop's profits Sony and MS have overlooked they were also going after a gaming culture which recruits some of their audience. If consoles become Windows PCs with a few exclusive games and gimped Internet services, then what is the point of having a console? Controller gimmicks?
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@Klaus - those happy days "...when PR was just a full page ads ..." had to be paid for! The days of the free PR ride have gone as the advertising budgets dried up! Now we see all bets are off and old alliances and friendships are worthless and its dog eat dog out there. Ask Nintendo how much love all their free trips and 'presents' brought them when the cards hit the table.

Your crystal ball observation that "... mercilessly latch onto any weakness and exploit it for maximum inflammatory responses..." is because there are so many weaknesses in the plot that even myopic journos can smell a bi-line. The whole used game situation is the making of Sony and MS and their schizophrenic executives - many of whom may not make it out of E3.

The suits have badly gauged reaction to the launch of their respective systems - and placing all the aspirations on three days in June to save their game face is a dangerous gambit based on desperation. For the media - this could be the last Big Bash E3 they will see in their generation, because if this play dose not work then the publishers will revert to private showings and abandoned the convention approach.

How many walking the halls of E3 2014 will be doing the same the following year in their current position?!
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Show all comments (19)
Morville O'Driscoll Blogger & Critic 8 years ago
I have to say, the fact that this whole "wait-and-see" attitude from MS and Sony is annoying everyone kind of amuses me. Doing most of my gaming on PC, I'm well aware of the varying forms of DRM and the required installation of digital distro programs just to run something. But do you think publishers inform consumers ahead-of-time about these important parts of the game? Nope. Of course not. We're asked to pre-order something months in advance (so we don't miss-out on bonuses), but little details about if it requires UPlay or Steam are conveniently ignored.

Sony and MS are just following the industry standard with their wait-and-see philosophies, that's all. The only difference is that it's a possible industry-changing scenario; but the consumer is treated the same as they ever were.

Edited 1 times. Last edit by Morville O'Driscoll on 6th June 2013 12:19pm

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Klaus Preisinger Freelance Writing 8 years ago
I assume you are hinting at publishers having QA persons play heir game in front of journalists, hoping that once the experience is translated to a wall of text it will be more of an incentive to buy a game, than if the customer saw the QA person play the game in the first place? Yes, that should be one definition of insanity.

E3 is in a weird place. Usually, it could be described as publishers saying "here are our new lineups, please help us, so we both make a lot of money". But this year, it appears Sony/MS carry the message of "here we are, btw, you are going to make less money". At least to anybody other than the publishers.
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Caleb Hale Journalist 8 years ago
E3 is going to be a pure hype event for the first round of next-gen games. So, yes, no one is going to rain on the parade with the unpleasant truth of what the next-gen business model will look like. I wouldn't expect to see prices for the PS4 or Xbox One either, as revealing them then would cause gamers to weigh what they see against whether or not they really want to spend the money on a new console later this year. That's not a factor game publishers want present when they are trying to build excitement for the PS4, Xbox One version of a title.

Unfortunately, you can't close this Pandora's Box. Suspicion is out there, and the onus is on Sony and Microsoft to prove they are still in this for the gamers. The gaming public is a pretty jaded crowd these days, despite being on the cusp of a new console cycle. Sort of makes me wonder who was calling for next-gen more - the game makers or the game players?
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.8 years ago
Morville, the difference here is that on PC, it's a publisher DRM. We're now looking at an entire platform DRM. Imagine if Dell or HP initiated a DRM strategy on all their PC's. Now you see why gamers and the media are going out of their minds over this. Because PC owners would have the same reaction if Dell or HP did the same.

Granted with PC's, you can upgrade around the Dell or HP DRM by reinstalling the OS or upgraded the motherboard without the DRM chip (whatever solution they would use). With a console, you're stuck with it.
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Morville O'Driscoll Blogger & Critic 8 years ago
Oh, indeed, it's why it's a (possible) industry-changer. But the lack of information is still the same. No publisher ever says before release what the DRM of a game is - it's something that's has a stony-silence attached to it. Much like, say, Sony's stance on second-hand titles. And you can bet MS are wishing they'd kept their mouths shut, too.
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Yiannis Koumoutzelis Founder & Creative Director, Neriad Games8 years ago
Caleb, i would say the game makers most probably, as gamers are fast losing interest in consoles. Xbox One reflects exactly that trend. It is publishers last chance to make some big fat bucks! Many of them are on the way out, others kicked the bucket already as we all very well know.

I think the reasons why they might not announce any definitive answers are these two: A. they wait to see who is going to announce what first and come up with a better offer claiming that they never had such hideous thing in mind, or B. they need a lot more time to discuss with all the stakeholders and form deals that would be agreed by both retailers, and publishers.

Hardware makers are in the middle of this and while they do not really care about used games, they need someone to sell their hardware and if retailers are not pleased this is not going to help them, on the other hand they know they really need exclusives to make this happen and the full support of publishers which means ensuring that they won't lose that huge amount of money this time around. So i would really not want to be in MS and Sony's position right now! :)
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Spencer Franklin Concept Artist 8 years ago
"It's expected that Microsoft and Sony will charge consumers who buy games second hand to access the content, ensuring the hardware manufacturers and the publishers receive a cut of used games sales. "

So...they intend to go after the purchaser of second hand games to get their "cut" of the used market?
Why are they not going directly to their supposed retail partners (such as Gamestop) and working it out at that end, instead of attempting to punish consumers for simply doing what they do, and looking for a deal? So instead of taking a cut from the retailers, they will tack it on to the consumers... bad idea.
Especially when the retailers neglect to tell people (during the purchase of a $5 discounted "used" game) about the fact that they will be charged by Microsoft/Sony when they go to play the game? I hope this speculation is all wrong...
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.8 years ago
Spencer, it's because they are in bed with retail, not consumers.
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@Klaus - a good observations, Turkey's voting for Christmas - springs to mind. I love how some MS suits were surprised how irate certain heads of retail operations were to the mess over the "used game" issue on the Xbone. Seems that MS's executives have already taken on the mindset of selling digital content without retailers!

@Caleb - to the above point, the console manufacturers may not want to leak the price, but the unhappy retail community may "leak" the information just to get their own back! The same way certain executives leaked the news about the Wii-U lite being binned.

Fundamentally, the situation is this E3 was fueled originally by the trade association representing the game developers / publishers and by a large tranche of advertising money from retailers and media. The show has gone through some dark periods and 2013 will look to be a possible transitional year (hopefully we do not return to that airport hanger in 2014!)

We know E3 is quizzical with Nintendo Best Buy agreement - so what will the future hold - just separate press conferences off the show floor for the consoles, and a smaller exhibition space? Where do the PC game and the new SteamBox showcase their new developments? Could E3 go wholly PC or will CES win?
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Greg Wilcox Creator, Destroy All Fanboys! 8 years ago
@Moreville - you kind of missed this in my rant, but on PC, if you don't like DRM, you can choose to play and support games that DO NOT USE IT. There are plenty of great indie games in ALL genres from freeware to paid in full MP focused games don't do the DRM thing at all. I always find it funny when on some PC boards, the rants about DRM extend until those people either crack or play the game and realize it's crap or not what they wanted and someone recommends a better game from a publisher and developer they've never heard of.

On console, we're stuck with what's shoveled our way and it's going to be a case of people finally wanting some privacy back in regards to how they can play what they buy. I said this about five or so years ago and got laughed at, but I really think we'll see a push-back that's going to surprise people because you can only take so much away and try to pass it off as a benefit.

THAT said, I think people WILL buy up a ton of these new consoles on day one and onward, but a great deal more will hold out until those early adopting folks do the guinea pig thing, as we KNOW there will be systems dying, service issues (you can't tell me a few million users trying to grab the same content at the same time around the globe won't jam things up no matter how many more servers are chugging away), whatever DNS attacks will take place, people realizing KINECT can't be turned away or off and so forth and so on...
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Greg Wilcox Creator, Destroy All Fanboys! 8 years ago
Oops- sorry for the "e" Morville!

Anyway, in just asking gamers around my area, I'm finding most are just frustrated by the runaround and most would rather have ONE announcement with a date, a price, what games are coming and yes, how much they'll cost.

Money is still tight in spots and people need to plan. Pre-orders need to be paid for, old consoles traded in (where applicable, as it looks as if people will need to keep at least one old machine humming). Kids will need to start haranguing their parental units as early as possible, mom and dad or whomever needs to buy these new consoles for the holidays or whenever need to start budgeting them in (as the new service plans will no doubt surprise many expecting to walk in and out of a shop paying what was advertised and no more) and so forth and so on...
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Paul Jace Merchandiser 8 years ago
On the one hand I could see this happening. I was fully expecting both to atleast reveal a launch date and price. However, if either has a launch price higher than $400 they probably will wait until closer to launch to announce it. So if either refuses to announce their launch price next week, we can all summize that the price will be north of $400.

As for the used game issue and always-online requirement, I think both of those should be revealed next week too. But again, if they really hold off on specifics until a later date, than we once again can summize that these specifics will not be in the best interest of the consumers. So E3 probably will be all about the games and the other important stuff might be saved for a future press event by both sometime closer to launch. That sucks but it is what it is.

Edited 1 times. Last edit by Paul Jace on 6th June 2013 10:50pm

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Greg Wilcox Creator, Destroy All Fanboys! 8 years ago
Well, the always online and used games djinn are out of their bottles (and trending), so now, it's all about the games. Given my peek at the official Xbox forums, it's going to be a hot time in the old town before those games are announced, as many aren't all that happy about those restrictions as to who can play the games that get bought...
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Rick Lopez Illustrator, Graphic Designer 8 years ago
E3: Microsoft, Sony unlikely to clarify used games policies
Of course they are gonna downplay it... Nobody wants it and they themselves know its stupid.
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Roland Austinat roland austinat media productions|consulting, IDG, Computec, Spiegel Online8 years ago
By going after Gamestop's profits Sony and MS have overlooked they were also going after a gaming culture which recruits some of their audience.
Exactly. And there are many hand-me-down consoles given to little siblings etc. while the older one still keeps some of the games. Only now little bro/sis have to pay for them again. Will not fly with the parents.

How many walking the halls of E3 2014 will be doing the same the following year in their current position?!
Too many.
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Greg Wilcox Creator, Destroy All Fanboys! 8 years ago
I know it's useless to state this, but the fact that Microsoft doesn't seem to care to address some pretty obvious questions from the press in better detail means they really don't want to listen to and definitely not answer those questions at all because they have an ironclad plan and are sticking with it, sink or swim. Good for them, i guess... but at what cost?

I'm not one of those 100% convinced Sony will have a "better" version of this "new age" of gaming, but I sort of trust their relative silence as it seems they're saving up a salvo to fire off at the competition. I'd imagine they'll make PS Plus an even more attractive deal than it already is with the caveat of possibly dropping the free service down the road (which would piss off longtime users some call "freeloaders" elsewhere, but I guess that ride couldn't last from a financial level). That said, IF their conference and the resulting interviews lay out their plans clearly and explain everything (or as much as possible so it's easily digested), they they'll at least "win" the PR war with (semi) transparency.

And of course... Nintendo could care less about the other two companies' events, I'm gathering... but, man... they REALLY need to fix that damned eShop up and make it closer to Steam or even
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