Analysts react to Sony's patent to block used games
Yesterday's news that Sony has filed a patent to block the use of pre-owned games has been met with strong criticism.
The patent proposes that individual copies of game discs should be tagged so they can only be used with one console or account.
Should Sony push through with the patent and incorporate the technology in its next console it could mean the end for second-hand games sales.
US games store GameStop was hit with a 7% drop in shares following the news, while analysts say it would be a mistake to block second-hand games completely.
Wedbush Morgan analyst, Michael Pachter, compared the patent to the Stop Online Piracy Act (SOPA) that made headlines last year.
"This patent reminds me of SOPA," said Pachter, "and if Sony puts the technology into the next PlayStation and any publishers attempt to limit the playing of used games, I expect the consumer backlash to be similar."
Pachter predicted that Sony wouldn't completely block the use of pre-owned games, instead giving publishers the option to block their own games from being sold on if they wished.
"While it is possible that Sony intends to block the playing of used games, we do not think it is a likely result, for several reasons," he added.
"Sony benefits little from a unilateral decision to block games. The company's first party software sales represent less than 10% of overall sales on its consoles, and it is unlikely that blocking used games would result in a lift of more than 10% in new game sales. That means that Sony's sales would rise only marginally if the PS4 blocked used games."
Pachter concluded that any move by Sony to block pre-owned games would be 'foolhardy' if Microsoft and Nintendo didn't follow suit.
"Sony would be materially hurt if its console blocked used games and competitor consoles from Microsoft and Nintendo did not.
"The Wii U is already on the market with no used game prohibition, and we believe that Microsoft would take advantage of Sony's prospective decision to block used games by marketing that its own next generation did not block used games."
The next generation consoles from Sony and Microsoft are expected to be announced this year, when we'll discover whether plans to block pre-owned games are being implemented.