Used Game Prohibition Patent: Sony’s Next Step?
by Phoenix, HSM team writer
Recently, it was publicly noted that Sony filed a patent for software that would prohibit the use of used games on a system. This software would associate the new game with the system it is first played on, and reject it from other systems.
This is said to be a way for Sony to cut down on the sale of used games, and recoup some of the lost revenue.
Which brings up an interesting question: exactly how much revenue is actually being lost? Are these people who would opt to pay a game at full retail price if the secondary market was removed? Or would they still be counted as “lost” revenue?
I think there has to be more to the story than just lost revenue which might’ve never come in to begin with. Perhaps this is a consequence of Sony’s well-documented financial woes. Because let’s face it: with this software, Sony would be taking a chance of alienating more of its customers and potentially losing more revenue. The claim in some circles is that this revenue is to be 
distributed to the developers, as they feel they incurred deeper losses.
The patent says it would be used to block secondhand electronic content; this is inclusive of music, images, et cetera. The wording states that the game-playing system includes a user permission tag in the game, disc drive and the reproduction device that reproduces the game. The disc drive reads the ID from the disc; when the game is played, the reproduction device reads the disc ID and the player ID to the permission tag. If they don’t match, or are determined to violate the tag agreement, it’s a no-go.
Though the document does not name specific devices that will contain this new software, Sony does acknowledge its filing and adds descriptions of past efforts to curb the sell of reused content. Sony further states how this new technology can be applied to gaming add-ons and other electronic media.
Some see this technology as a way for individual developers to block, if they so chose, the secondhand use of their content. They could revise the terms of use as they see fit, perhaps limiting the number of times any one disc can be used across a number of consoles.
I find it interesting that this type of technology is only being spoken of in terms of stopping Sony used game content play. I would think it would be used to prevent game copying. Would not Sony would lose more money in sales of consoles if this came to pass? Microsoft and Nintendo would lose as well, if either of them used the technology and the others did not. It would work the same way for all developers of content. There is a significant risk of further lost revenue. The only way for something like this to work would be an all for one agreement between the gaming industry giants.
Which begs the question: is that possible?
Would they all work together to stop the sale of secondhand game content? What will then happen to game rental places like Gamefly and Redbox?
It would make more sense to me to find a way to recoup the loss from the secondhand industry. Perhaps reach an agreement to receive some payout for games sold secondhand. Granted, there isn’t really much precedent for this in any industry, but it’s still worthwhile to consider. Because what’s the alternative? Will consumers en masse accept such a dramatic shift in the level of control wrested from them? Sure, there will continue to be consoles sold, even if this technology comes to be used, but at what cost? Prices are through the roof now. Just to acquire a new console, particularly in a depressed economy, is a steep proposition. So how far is Sony willing to go with this? How far are any of them willing to go?
I’m not saying they are wrong for trying to curb their losses. As a person that has brought used games before for each of my consoles, I can tell you that if it were not for that venue, I would not have purchased many games for my child when he was younger. Not before he learned to take care of them. Nor would I have played many games myself. I can also tell you as someone that has had a brand new game get stuck in a brand new 360, and heard it being ground up, the thought of another $60 to replace a game I never played was painful.
To tell you the truth, the difference in pricing on some games sends buyers to the new purchase anyway. The secondhand venues are only a good deal sometimes, and typically only on older games I find. For a newer game it’s only pennies on the dollar, even used. The trade-in amount is insulting most times.
However, as a writer and artist I know how it feels to have my content used without permission and in a way I did not agree to. I can see both sides of this one, and it leaves me wondering in what way my future gameplay will be limited. If this technology is implemented, will it only be on the PS4, or on all new consoles? If so, then those of us with older models might heave a sigh of relief to be able to play used games as long as our consoles hold up.
Lets face it: the face of gaming is ever changing, and in electronic technology Sony has long been a forerunner in the field. Will we see this happen in the future to gaming consoles? Yes, I’m sure in some form or other it will happen. Will it happen tomorrow? I don’t think so. I don’t even think it will be included in the PS4. Maybe some part of the patent will be applicable, but I don’t think Sony is ready to test the waters just yet.
January 7th, 2013 by Phoenix | 22 comments
Phoenix writes poetry and is a photography enthusiast, along with writing for HomeStation Magazine. She is currently studying for a BFA in Creative Writing and BA with concentration in Photography. psn ID phoenixstorm21
youtube.com/user/phoenixstorm21
CRAZY! i`m gonna give a weird example here. I buy a muffin from the bakery for $1 The bakery makes a small margin of profit on it. But still profit. Now i go outside and decide to sell my muffin to a kid who has only 50 cents. The bakery sees this and thinks “that could have been my 50 cents.”i`m loosing profit! something has to be done!. This is what many industries do.Isn`t it weird that despite the growing number of internet users and alleged piracy. those indutries make more and more profit each year. now the game developers is another story. they struggle. And if Sony continues with this, i`ll garantee that the quality and sales will go down. I`ll stop ranting now
because i could go on and on. 
Just shows that i really enjoyed reading your article. Thank you.
Sorry, but that’s not a good analogy. In your example, you would have to eat your muffin and then sell it to the kid for it to be comparable to selling used games and we all know that’s not possible because you can’t have your cake and eat it too.
Well the moment u buy something. it is NOT new anymore. Like some of my NEW games that i`ve NEVER played, are still 2nd hand when i sell them. played or not…
I agree that is a description of used. My point is that with a game, you both can get full use out of it, but you can’t with a muffin. It’s not that big of a deal, is it?
I also enjoy your thorough thoughts on this. I personally feel there are some positives and negatives from this.
However, I’m on a wait and see mode. But this is a great article nonetheless.
Thanks Phoenix for sharing.
Everyone keeps worrying about this patent and I don’t know why, if ps4 does try this it will put GameFly and companies of that sort out of business and it won’t last long because of all of the honestly quite credible lawsuits they will get. It’s a dumb idea in general and I just don’t see Sony sticking with it. Anyone remember a little thing called the PSP go, it tried digital media only which was a way they tried to not allow used games (also people still liked having a game they could feel, see and hold in their hands) and it failed big time. Nevertheless Sony doesn’t stick with ideas that in the long run lose them money. So we have little to worry about
They say that around 80% of multimedia sold today is still on disc, C.D etc. The world just wasn’t ready for digital only KLC -- and still isn’t. I’m kinda glad of that TBH, I like my physical media.
As for the ridiculous idea of stopping machines from playing second-hand discs, well, it’s just laughable isn’t it? Dutch’s comment was bang-on, that’s exactly what it’s like and there’s really no need for it.
What if I want to take a game around to a friend’s house, oh wait, I can’t!
What if my PlayStation dies and I have to get a new one, I gotta buy ALL my games again too!?
What if… Actually never mind, there’s so much wrong with this idea I don’t know where to begin, but I’ll end by saying this; If I’m stopped from buying second hand games, I’d start pirating stuff like a bloody swashbuckler from a damn ghost ship!!!
When you buy a second hand game, zero money goes to the developers. You are paying to keep GameStop open. Sony gets no platform revenue. So a game can be a hit in the second hand market and fail as a title.
The threat that you will stop buying second hand games and start pirating them is honestly no threat to Sony or the developers since they get no revenue from your buying the game.
What is interesting is that people who buy second hand games want support for it because they paid money for it. The problem is how does a company support people who paid someone for a game, just not them? I actually have been contacted by people who bought one of my games from a company that just copied my CDs and started selling them for full retail. The people say they paid full price, but my company received no money from them. How can we pay people to answer all their questions?
This is complex from both ends.
Don’t get me wrong here Deuce, I buy games at normal prices too. The next GTA for example will get full funding from me. The main reason for that though is it’s likely to be generally bug-free and will work properly as intended. Same as I paid full price for RDR. But Rockstar are known for quality. There’s just been so many times I’ve paid full price for a bug riddled glitch-fest of a game I’m sick of waiting months for the patches to be released to make them playable -- by which time the game has usually dropped in price anyway. When Journey was released I paid full up-front for that too, why? Because ThatGameCompany have a great track record of their games working properly right off the bat (and being very special).
If developers wanna put out shoddy work then fine, let the masses who know no better pay for half-baked games and fund a bad work ethos, but don’t expect me to pay them a penny for it. I’ll happily support a developer with my wallet if what I’m getting is good quality. I won’t however pay my hard earned cash for something that’s not even finished because some suit in an office wants his money before the game’s even ready.
I’m not blaming the developers here, I’m blaming the “executives”.
When the PS5 comes out and only operates from the cloud, then you’ll see some real piracy. By the vendors. What if the price goes up on a game as it becomes more popular? Won’t vendors deserve compensation from early buyers who got it at a lower price? Oh, won’t somebody please think of the developers.
Sorry, Deuce, but you’ve got real thieves stealing your sales and don’t enforce your copyrights, so how can you bewail that developers can’t get paid again each time somebody new plays a second-hand game?
I do agree though that the threat to stop buying second-hand games and start pirating is ridiculous, only because the more likely occurrence is I’d give up gaming or [gasp] get an Xbox before I give in to grasping crooks. It’s not like we’ll ever be getting money back as a game becomes less challenging or exciting. So what’s to lose?
I just thank dog that Vermeer’s dead, or I’d owe him a fortune for looking at those paintings of his that Mr Mellon picked up second hand. [Plus I’m pretty sure that Vermeer only got paid once, although his pix have been sold many times and for millions more than their original price.]
Never bought a game second-hand but nevertheless I find very disturbing this greedy new notion that if legal use of my purchase could profit some corporation further, I should bend over and let them pick my pocket whenever they decide. Who says?
As a legal precedent it’s got to be stopped now. If you buy into the crock that anyone suffers when corporations aren’t granted eternal control over transactions then you’ll never stop paying.
Alright alright! My knee-jerk reaction was to be as obtuse as the companies are, so I mentioned pirating. Honestly though, I’m not about to put down 500 smackers for a brand new machine then have it tampered with so I can get cheaper games. No, I’m far more likely to… Ugh… I’m not sure I say it…
I’M LIKELY TO STOP GAMING!!!
Oh man, just saying that makes my future feel bleak! LOL!
http://news.cnet.com/8301-10797_3-57562100-235/game-on-sony-wont-block-used-games-analyst/
I’m confused. Don’t people buy and sell EVERYTHING used? What about CD’s for instance? The musicians and recording companies don’t receive any money on these sales, either. I’m guessing they take this into account when they price the new CD in the first place.
One problem I see is the cost of new games. in most cases a new game will set you back $60+ Add in the price of a controller, console and accessories Its becomes a big investment. Especially when most of the popular titles come out with a sequel 10 -- 14 months later. Used games for the player is a great savings.
I think the solution can be found in Home and in social sites like pogo and Facebook. If more developers invested in low cost games, or free to play models where they made their money on expansion kits, upgrades and special features. We would find that the average gamer would spend more money on one game over a long period of time versus a one time purchase of a disc. With less hardware, I believe the developers stand to make more money. And players will get more entertainment value for their dollar than they currently do with the hardware based gaming.
At 60 bucks a game you need to dial back buying new games or you will go broke. This is where the used games become so tempting. It’s simply a reaction.
The same thing happened to audio CD’s in the 90’s. The price jumped up so high people went to Napster and I feel it never would of happened if the prices didn’t skyrocket.
The larger question here is: Who owns these things? You can’t “gift” a iTunes song to somebody else, so do you really own it? Do we rent these things or do we own them?
It seems to me if you buy something it’s yours and will always be yours. If Sony wants to do this (I don’t think they will) then they are saying we still retain ownership of this, and we decide what you can do with it. This will further erode an already shrinking fan base.
What if Ford or GM put a self destruct in their car in case of re-selling?
I have the outmost respect for intellectual property. But selling a used game or movie is not the same as copying it.
This remind me of Monsanto Terminator gene. Some say they never really intended to use it but merely tested the market… I doubt it and I wouldn’t be surprised to see the other major consoles maker to join Sony. As it’s the only way it could work. If only one company is using this it would be suicidal.
I proudly buy some titles new. And I also bought and rented(much less now that I’m on home all the time) a bunch of used game. There is so much crappy button smashing games out there theres no way I’m risking a full retail price on a game I know nothing about. Many times in the past I bought a game after trying it.
I bought Destroy all humans 2 only because I rented the first one (ps2). When Mafia II was offered at discount as a DLC I bought it because I rented it too.
the used game market and the new release are two different animal. It’s not true that all the money, or even a significant part of it, spent on used game will transfer on new games. Someone who have a limited budget, who can spend $20 once or twice a month for entertainment wont wait several months to pay the $65 to $80 asked for AAA games here in Canada. They will spend the money elswhere.
If Sony and other console and content producer really beleive the second hand market is truly stealing their money. The only way I can see a justification for that is if prices are at least cut in half. Wich won’t happen.
A quick word about customers/after sales services…. It’s not something console base game producer are reknowned for… Maybe Pc games require some, but that’s not bothering me much. Unless Sony stop investing money on how to alienate customers and more on customers services…
Here’s a note from Apple on its stance regarding purchased digital property:
“Since you already own the songs, albums, movies, or TV shows in your purchase history, you can tap to download them to any of your devices.”
NB Any of your devices.
As long as your device is somehow hooked on the net… Wich is not necessarly the case for everyone or all devices.
Not true, no connection needed.
Everything in iTunes played even after I disconnected my desktop from the net:
•new purchased ones that I own and
•old protected ones with DRM.
The reality is that the secondhand market crushes the primary market and forces higher prices on consumers. A clear example of this is the college textbook market.
Until the early 1990s, college textbooks averaged about $75 each new, but could be had for about 60% of that cost if students bought used. University bookstores ran their own buyback programs and received 100% of the profits from those resales, having already put a retail markup on the original purchase price. Textbook prices crept upwards during the 1980s and 1990s, as publishers realized that most textbooks had to be paid for in their first production run.
In the mid 1990s, Barnes and Noble essentially bought out the college textbook secondary market by buying up all the bookstores. Using a centralized database, they were able to make the market for secondhand books and control prices, as well as reduce demand for new textbooks. In a few years, average textbook prices more than doubled, with new texts selling for $150 to $300 as publishers suffered even greater economic pressure. Once the practice became centralized, a single competitor was able to have a far greater influence on the market than were hundreds of individual competitors.
This same dynamic played out in the music industry. Physical CDs now cost $20 or more, while equivalent downloads from iTunes can be had for around $10.50, assuming 8 tracks at around $1.29 each. By shutting out second-hand competition, iTunes crippled the major-player secondary market and allowed content creators to retain some control over pricing.
The best model for mass-market retailers is cost amortization across the largest customer base possible. When this is achieved, as happened with CDs from the 1980s into the early 1990s and is currently happening with Blu-Ray, per-unit costs for end consumers go down and consumers are able to purchase more individual units of a product. This benefits everyone involved in the supply chain.
When a single business (or a handful) is allowed to control the secondary market, costs are amortized among a smaller group of primary buyers who pay full retail. This pushes per-unit costs up and limits the number of individual units the average consumer will buy.
Ideally, game companies should be moving to 100% digital distribution to lock out the secondary market and properly amortize development costs, which would deliver a lower purchase price to consumers. Instead, most of them are offering digital distribution at the same price as physical media, which is a blatant cash grab, as there are inherently higher profit margins for digital distribution.
Here are some stats to chew on: In 2007, console penetration in the United States was 41%, or approximately 46 million homes. In 2012, 56% of U.S. households had a current-generation gaming console, which equals approximately 60 million homes. Usually that level of market growth would be accompanied by a drop in per-unit media prices, because the available install base has grown by a third. During that period, however, average game prices stayed the same or increased. Why? Gamestop, primarily, and the ongoing loss of revenues to a parasitic second market.
Those rising new game prices are also a boon to Gamestop, because it prices its used titles at a percentage of new-game average prices. They’ve also slashed what they pay out for used games, so they’re making more profit per used sale than ever before while simultaneously screwing the market they claim to serve.
Digital distribution should come at a discount, and it can’t come fast enough. The “bargain” you think you’re getting with a used game is pure illusion. Time-limited rentals should also be part of the equation, and that might be where this industry ends up anyway, as the number of games truly worth owning for replay value gets smaller with each passing year.
Text books have a limited target market. The more specialized the book is, the smaller the target is. Games are (almost) opposite. For a very specific subject, i.e. FPS, you have tons of games. Give me quality and drop the price by half with this terminator gene application and I’ll beleive you. But it won’t happen.
The size of the market has no bearing on consumer behavior. Textbooks cost more than trade books because the market is smaller, but that doesn’t explain what happened in the 1990s. Prices rose because a competitor reset the market.
Follow the trajectory of CD prices if you want a closer example to gaming. That market was impacted both by an active secondary market and by piracy. Now it’s competing with digital distribution. In music, at least, they give you a break on price if you buy digital.