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GameStop Corp. (GME), Microsoft Corporation (MSFT): Will New Game Consoles Be the Beginning of the End?

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Thinking about it, I can’t actually remember the last time that I bought a game from GameStop Corp. (NYSE:GME). I still go in to GameStop stores from time to time to browse the used games they have to offer, but even those visits are becoming rarer. In most cases I can find the same games for cheaper on Amazon or eBay, and if the games aren’t console-exclusives then I can usually get a good deal by waiting for the next time there’s a sale on Valve’s Steam service.

Of course, it’s possible that Microsoft Corporation (NASDAQ:MSFT) could make those trips to GameStop even rarer in the future.

GameStop Corp. (NYSE:GME)

The death of used games?

When Microsoft Corporation (NASDAQ:MSFT) introduced the Xbox One to the world, the outrage was almost immediate. A feature that was long rumored to be part of the console reared its ugly head: all games would install themselves to the console’s hard drive, and once installed they would be associated with a specific user account. If you sold the game disc or even let a friend borrow it, an additional charge would be required to install the game onto a different account. Though almost every company involved in console gaming has been rumored to have a plan to eliminate the used games market, Microsoft is the first to really strike a blow against it.

Now that’s not entirely true, of course. Electronic Arts Inc. (NASDAQ:EA) also instituted a feature known as “Online Pass” in some of its games that required players to enter a single-use code to access some game components such as multiplayer combat, requiring new codes to be purchased by any secondhand buyers of the game. A few other game producers have tried similar things as well. Microsoft is the first console producer to implement such a scheme, however, and its implications are a bit more far-reaching than what Electronic Arts Inc. (NASDAQ:EA) implemented (and recently discontinued, not only removing “Online Pass” from new titles but unveiling plans to remove it from existing games as well.

What if it’s not a hit?

Right now there are a lot of people talking down the Xbox One, but there’s still a lot of time between now and release for gamers to change their minds. For some the lack of backwards compatibility and tying installed games to your account are deal-breakers, but even so the console is likely to see decent sales. Even if it doesn’t beat out Sony Corporation (ADR) (NYSE:SNE)‘s Playstation 4 in sales, it could still be a thorn in GameStop Corp. (NYSE:GME)’s side. Win or lose, the Xbox One is a big neon sign of things to come.

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