Update: Xbox One To Take Cut With Every Pre-Owned Sale

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Update: Xbox One To Take Cut With Every Pre-Owned Sale

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Reports suggest the retailer's cut will be less than 10%.

The Xbox One reveal left a lot of questions unanswered, among them what will happen to pre-owned game sales. Thanks to information let slip by retail sources we now know, among other things, why Xbox One will want to check in with home base every 24 hours; it's to see whether or not your account needs to be adjusted. If you opt to sell a game, you can only do it at Microsoft-approved retail outlets. Those outlets will have to agree to Microsoft's terms and conditions, and sign up to its cloud-based Azure system. It's Azure that manages the transaction, and tells the home office that you've handed in your title. The title gets wiped from your account at that point.

Retailers will get something less than 10% on each pre owned sale. The rest goes to Microsoft and the publisher. Prices quoted by MCV for pre-owned hover around the £35 mark, inclusive of the retailer's cut, so of that figure the retailer sees no more than £3.50. The £35 is the activation fee, so presumably that would be set in advance by Microsoft independently of conditions in the retail market. Stinker or classic, the price tag may be the same. When contacted by MCV, Microsoft was quick to say that "should you choose to play your game at your friend's house, there is no fee to play that game while you are signed in to your profile," but other than that was unwilling to discuss potential retail scenarios. It also leaves open the question of what happens if your friend wants to play your game on their profile. Or if three kids in the same house want to play the same game on their profiles.

Given this new information, it remains to be seen whether or not retailers will be eager to fall in line with Microsoft's philosophies. Having to sign up to Microsoft's conditions, using its system , only to get a less than 10% cut, isn't going to appeal to many retailers. It begs the question why anyone would ever want to sell an Xbone pre-owned title.

Source: MCV

Update:

There has been a clarification regarding the 10% sales cut issue:

The source revealed that game retailers will be forced to sell second hand games at just a 10% discount on the original RRP. This news will come as a shock to consumers who are currently used to purchasing trade-in games at up to 50% of the retail value.

Source: Console Deals

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hello pc. im glad i have you for many reasons.

Just keep right on digging your grave Microsoft. Im honestly looking forward to all this crashing and burning right in your faces.

Why is it that Microsoft seems to be the seagulls from Finding Nemo?
Used Sale money? MINE MINE MINE MINE MINE MINE MINE

Used Games? MINE MINE MINE MINE MINE MINE MINE

Actually wait that is just Microsoft in general with money.
Well wont be getting an XBone then.

Microsoft gambled that Sony would take the same anti-preowned stance this generation. That has to be it. There's no other reason why they would think this would work, except if retailers and consumers had nowhere to turn.

So, let's count... They've pissed off retailers, consumers, PC users... Do they honestly think TV and sports hounds will compensate for the massive install base bleedout they've set themselves up for?

So the retailer get 10%? Yeah, say good bye to support from Gamestop, Microsoft. I'm glad I'm not interested in the Xbone because then this would have been depressing. Now I am saying that and I don't even like buying pre-owned games. I like it even less when a company screws over its customers though.

They patch one foot and shoot the other. Seems that every step they take they look more like an ass. I doubt many gaming retailers will accept this, especially Cex, who are primarily reliant on second-hand sales.

I'm starting to feel dirty just for using windows 7...

I mean I would do everything in Linux Mint but... adobe, adobe and their picky ass shit.

well thats going to wipe out the used game market for the xbone

It seems like Microsoft it doing their damnedest to make me care less and less about it's next console.

And it's working...

Holy Shit.

If I were Gamestop, Amazon and Ebay, I'd have just barred the Xbone from sale, period.

That's impressively aggressive on MSoft's part, remains to be seen what the reaction is about to be.

Again, I'm seeing very little incentive to go out and buy one of these very expensive machines.

It's anti-consumer, it's anti-brick and mortar retail, it's anti-videogames.

I really just don't get that excited at the prospect of having the NFL IF I choose to move to America and...advanced Call of Duty fish AI one month early?

omicron1:
Microsoft gambled that Sony would take the same anti-preowned stance this generation. That has to be it. There's no other reason why they would think this would work, except if retailers and consumers had nowhere to turn.

i think this is a reason but then they came out after the ps4 announcement, IF they had any sense they would have changed it. but no all theyve done is piss off retailers, piss of their consumer base, piss off their potential consumers and pissed of europe by having most of the presentation showing the xbox doing things that arnt avaliable out side of north America (some not outside the US even)

omicron1:
Microsoft gambled that Sony would take the same anti-preowned stance this generation. That has to be it. There's no other reason why they would think this would work, except if retailers and consumers had nowhere to turn.

My theory has always been that EA's "Things To Do To Piss Off Your Consumer Base" department helped co-develop the XBone. :P

OT: Unless it's a game that I absolutely KNOW that I want, I generally buy used. That's not because I'm cheap really, it's because for games that I'm on the fence about I like to wait a bit until I can gather enough word-of-mouth reviews from friends to decide if I want to buy the game. At that point, why not buy it used for a lower price?

Another question I'd have is what does this mean for rented games?

LoL why do people care if gamestop gets bent over on this deal? Its not like they havent been ripping people off for years themselves. Who buys used that much anyway?

this keeps going downhill

Drop_D-Bombshell:
They patch one foot and shoot the other. Seems that every step they take they look more like an ass. I doubt many gaming retailers will accept this, especially Cex, who are primarily reliant on second-hand sales.

Aren't they totally reliant on used sales? I don't think I've ever seen anything new in there, though I've never really been interested in their game section.

Whilst I think it's a kind of shitty idea, at least the publishers are getting a cut of used sales rather than everything going to the retailers. But I expect that Microsoft will be taking the lion's share of every used sale. I'd rather spend the extra cash and get a game new. Not that I will be buying any Xbone games in the first place.

RJ 17:
At that point, why not buy it used for a lower price?

Oh, I dunno, supporting the developers instead of the vultures at gamestop?

Aaaaaaaaaaaaaaaaaaaaaaand- Gamestop doesn't even bother to stock it's shelves with your games. Your spot will instead be filled by used copies of 360 games.

Seriously, Microsoft, this is just insane.

The insane thing is that I can actually see this kind of system working.

Most game buyers will never know this kind of a system is in place. If the people who want to and are allowed to sell a game or buy a used game, they will. They'll be mostly unaware of the retailer getting shafted in the process, but by and by large they won't care. They're spending less money on games.

I don't see every retailer just saying "no" to this system either. There is a market for used game sales. It is a thing people want. Even if the deal is far worse than it was before, all of the retailers won't say "no" because at least one of them will agree to it. And then that one outlet will control large market shares of that (let's say regional) used game market, and make money.

The only way it won't work is if the profit margin for retailers is so low that it would drive them all out of business losing money on every sale. But that won't happen either. Microsoft will either adjust the deal to allow retailers to make a little more money (so Microsoft will still make money off the sales too), or there will arise a retailer with a low-overhead operation that will be able to make the deal work for them.

I don't really understand why people are freaking out about the mechanics of used game sales, except for perhaps the system check with Azure servers to validate whether you still own the game or not (which the timeframe during which this would occur still hasn't been verified yet).

First off, a maximum used game price of $45 is definitely not terrible, and of course Microsoft is going to take a cut for processing and hosting the Azure service and serial keys. This is an obvious result of the system that they put in place. While it's true that the rumored 10% minimum for retailers involved would indeed suck, I think we're forgetting something that I find quite amazing about the new system.

The publisher gets a cut of used game sales.

While it's true larger publisher's like EA really don't need to be making more money than they already are off of micro-transactions and DLC, smaller publishers could very well thrive under the new system which, hopefully, would mean for money for the studios that develop our favorite games as well.

Are they actually trying to piss people off or is this just the way the cookie is crumbling?

StayCalmAndHateXbox:

RJ 17:
At that point, why not buy it used for a lower price?

Oh, I dunno, supporting the developers instead of the vultures at gamestop?

I'll do more to support the developers when they do more to encourage said support. And no, I'm not interested in debating this with you.

StayCalmAndHateXbox:
LoL why do people care if gamestop gets bent over on this deal? Its not like they havent been ripping people off for years themselves. Who buys used that much anyway?

I do, for one, but not from GameStop. I support a locally owned and operated game store. I don't buy all my games used, but I DO want to have that option, and I want that option to include my local game store. This policy may very well kill that mom and pop place I love so much, unless PS4 used sales keep them afloat. (The Wii U certainly isn't helping them yet)

GameStop (and others): "What's that? You only want to give us 10% of each sale? Ha ha! See how many people buy your system when we don't stock it! Oh, and people want to buy the new games? Too bad we only have this small kiosk of Xbone games. After all, we had to devote this entire wall to the WiiU and PS4 games."

Really MS? Really? Did you actually think ANYONE would go for this?

This is just getting hilarious now.

I can't wait to see what Microsoft is going to fuck up next.

This thing was already doomed to failure. I hope it fails even harder than we're expecting and Microsoft learns something of a lesson.

Reyalsfeihc:
I don't really understand why people are freaking out about the mechanics of used game sales, except for perhaps the system check with Azure servers to validate whether you still own the game or not (which the timeframe during which this would occur still hasn't been verified yet).

First off, a maximum used game price of $45 is definitely not terrible, and of course Microsoft is going to take a cut for processing and hosting the Azure service and serial keys. This is an obvious result of the system that they put in place. While it's true that the rumored 10% minimum for retailers involved would indeed suck, I think we're forgetting something that I find quite amazing about the new system.

The publisher gets a cut of used game sales.

While it's true larger publisher's like EA really don't need to be making more money than they already are off of micro-transactions and DLC, smaller publishers could very well thrive under the new system which, hopefully, would mean for money for the studios that develop our favorite games as well.

I don't think most people are upset over it. I see it more being a case of people realizing this is a horrible move on Microsoft's part as they're alienating basically every Used Games retailer.

Personally, I don't care who gets the cut of the sale, and you also make a good point regarding the price. However, when places like Gamestop are the leading retailer for games for most people, if they decide to simply not carry Xbox One stuff because of this, MS is going to feel it.

Yopaz:
So the retailer get 10%? Yeah, say good bye to support from Gamestop, Microsoft. I'm glad I'm not interested in the Xbone because then this would have been depressing. Now I am saying that and I don't even like buying pre-owned games. I like it even less when a company screws over its customers though.

Yea, I can't say I buy pre-owned anymore either but I used to and I probably wouldn't buy as many new games now if used games were as expensive back then as they are now. So I'm not exactly a big fan of Gamestop as they're the ones mostly responsible for gouging the prices on the used game market but all this is going to do is pre-gouge the market.

Once again, its an example of the new consoles getting the worst parts of the PC experience with none of the benefits.

spartandude:

omicron1:
Microsoft gambled that Sony would take the same anti-preowned stance this generation. That has to be it. There's no other reason why they would think this would work, except if retailers and consumers had nowhere to turn.

i think this is a reason but then they came out after the ps4 announcement, IF they had any sense they would have changed it. but no all theyve done is piss off retailers, piss of their consumer base, piss off their potential consumers and pissed of europe by having most of the presentation showing the xbox doing things that arnt avaliable out side of north America (some not outside the US even)

They would have made this development decision ages ago - and they didn't have enough time to change it following Sony's reveal.

Put another way, once Sony made their move, Microsoft knew they were XBoned.

Hmmm Microsoft...since my xbox 360 is permanently offline this gen because fuck xbl and now you are messing around with the used game market next gen?

Fuck off.

It's looking more and more that I'll be going PS4 this gen if I'm getting any console at all...

I'll wait for E3 though to be sure.

StayCalmAndHateXbox:
LoL why do people care if gamestop gets bent over on this deal? Its not like they havent been ripping people off for years themselves. Who buys used that much anyway?

A large portion of the market buys used games; why pay more for the same product if you do not have to? For most of the public, $60 is alot of money. Used games allow many gamers to play games by 1) allowing them to buy games even if they can't afford to shell out $60 and 2) allowing them to trade old games they no longer play for new ones. The other advantage of getting games on the cheap and being able to turn them in is that it allows you to try games you're not sure you'll enjoy, widening the audience for the game, which is beneficial for both the consumer and the publisher.

Gamestop and other retailers are brought up in this discussion for a couple reasons, but honestly being 'fair' to Gamestop is not the main reason people are upset about this. The big reason is simply that this forces prices on Xbone games to start high and stay high perpetually (please note, 35 British Pounds = $53 USD) and kills the used game market, preventing people who can't afford to buy full price games from buying games at all.

MCV Misquoted their Source.

MCV states that in the article from ConsoleDeals.co.uk it is suggested that retail will only receive a 10% cut from used game sales.

However, when reading the ConsoleDeals article it states that the maximum retail price of used games at 35 euros would only be a 10% discount on RRP.

The source revealed that game retailers will be forced to sell second hand games at just a 10% discount on the original RRP. This news will come as a shock to consumers who are currently used to purchasing trade-in games at up to 50% of the retail value.
Source

Nowhere in the source article does it discuss the percent cut retailers would take from any used sales.

Supporting used game sales is not about supporting Gamestop. It is about supporting your right to ownership. You know, the same right you have when you resell any other product you buy - from clothes to cars.

Microsoft wants everything based on a licensing model. This is terrible for the consumers. The sad part is that they will probably throw money at their plans until they work, and I don't know if the public will have the stamina to resist.

A lot of people bought SIMcity, a lot of people still buys EA games in droves, Diablo 3 is successful.

Yeah, we have yet to see the aftermath of all those issues - will people buy the next Dragon Age or Mass Effect on the first day? But the sad answer is that they probably might.

Same thing with Microsoft. If they somehow manage to get a few great games, people wont care about the ethics of the whole thing.

I think what Microsoft is miscalculating, is that they think their main consumers are casual gamers who don't care about this shit, just swallow whatever is being advertised.

Which they are, but unfortunately unlike Wii soccer moms, XBox gamers are the kind who might not spend hours on the escapist, but at least they like to claim that they are hardcore gamers. Teenagers, dudebros, and the likes, who might not check out all the reddit memes about the new Xbox, but they will sure see them on 9gag.

They might not UNDERSTAND what is wrong with the Xbone, but they will sure as hell try to catch up with the term "Xbone", and with the general Internet consensus that it is a bad thing.

All I want to do is send this to Microsoft.

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