A hot rumor, which surfaced last year in the game industry, concerned a copy protection scheme by Sony that would lockout all other PS3s from playing PS3 game software, except the original machine it was played on. The protection feature, if enacted, could destroy the a large part of the $1 billion used game market and would also prevent gamers from swapping or borrowing games from their friends. However, a patent filed my Sony in 2000, which described a system that could do just that, has industry watchers on edge again. The patent documents by Sony state, "Since only titles for which legitimate software has actually been purchased and which have been initially registered in the machine table can be used, resale (so-called used software purchase) after purchase by an end user becomes practically impossible."
Sony responded to the charges by saying to Euro Gamer, “It’s false speculation. We don’t have any further knowledge about this topic – either officially or unofficially, to be frank.” However, in spite of the denials, the story has continued to worry some industry watchers. According to Michael Pachter of Wedbush Morgan Securities, “I actually think they’re toying with this idea.”
However, Pachter alluded to the fact that it would be a bad move not only for Sony, but also for the game industry in general. “A used-car market creates currency to buy new cars. Same with games. Everybody acknowledges that. The problem is if the used game is available a week after the new game is out for a $5 discount.”
According to the LA Times, “Used games are a lucrative source of revenue for No. 1 game retailer GameStop, which began reporting pre-owned game sales for the first time after its acquisition of competitor EB. Last year, secondhand game sales accounted for $930 million in revenue and $418 million in profit. The profit margin was 45 percent, compared with 21 percent for new games, according to Arcadia Investment.”
Paul-Jon McNealy of American Technology Research said, "While we believe it is unlikely that SNE will ban PS3 pre-owned games from being sold by the same chains that sell new PS3 games, we believe this issue remains under consideration." Another industry professional, who asked to remain anonymous remarked, "These are all things technologically possible to do in any computing device. In the video game business, it would be suicide for someone to do this. It’s actually possible Sony filed this because they wanted to keep people from doing that."
If Sony is truly in the stages of the implementation of a protection scheme to lockout the ability to play PS3 games on machines other than the registered console, the backlash from the gaming community would make the recent complaints of the high price points of its PS3 pale in comparison.
