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Xbox One: Microsoft and publishers to take sales cut on pre-owned games

Sam Loveridge


Xbox One
Xbox One

Microsoft and any associated game publisher will automatically get a cut of any pre-owned game sold for the Xbox One.

According to retail sources speaking to MCV, Microsoft has debriefed key retailers on how it intended to profit from pre-owned Xbox One game sales.

The company has already confirmed that the Xbox One won’t require an always-on DRM connection, but need to be connected to the internet at least once per day. According to the sources, this is so that Microsoft and the game publishers can track pre-owned game trade-ins and receive a cut from any sales made.

Only retailers that have signed Microsoft’s terms and conditions and have integrated with Microsoft’s Azure cloud-based pre-owned system will be allowed to accept Xbox One trade-ins.

Any title a gamer wishes to trade in will be registered on the Azure system via the retailer. The gamer will then have the title removed from their Xbox One hard drive and no longer have access to that game.

The retailer then has the power to charge as much or as little as they so wish for said title, but will automatically lose a percentage of that price to Microsoft and the publisher.

Earlier we reported that this retailer percentage could be as little as 10 per cent, which is more akin to the cut retailer’s receive from the sale of a new release.

Players may also have to unlock the game’s license by paying a fee, which could potentially be up to £35. It is not known whether this figure includes the retail price of the game as well.

“We know there is some confusion around used games on Xbox One and wanted to provide a bit of clarification on exactly what we’ve confirmed,” said Microsoft in a statement. “While there have been many potential scenarios discussed, we have only confirmed that we designed Xbox One to enable our customers to trade in and resell games at retail. Beyond that, we have not confirmed any specific scenarios.”

“Another piece of clarification around playing games at a friend’s house – 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.”

Next, read our Xbox One vs 360 comparison


May 24, 2013, 3:33 pm

I simply don't understand. Which other sector deliberately tries to undermine the retained value of its products? Can you imagine a car manufacturer trying to reduce the second-hand value of its cars. or trying to stymie the market for its second hand cars?

The 'cut' that the games publishers get from HIGH second hand values in a HEALTHY and THRIVING second-hand market is that they can charge a higher price brand new.

For every pound that they try to take in 'tax' out of second-hand sales they will lose twice over in the price of new sales (once as a direct effect, and again for the friction they cause in the market). Consumers are not stupid, they will pay more for products which hold their value well and are readily resaleable, and pay less for products which lose value and/or are awkward to resell.

As to Microsoft, the ready availablity of second-hand games would act to boost the value of the console - they are complementary products. Put simply, parents would sooner buy the console which has cheaper games available.

Tim Sutton

May 24, 2013, 4:22 pm

My understanding is that the retailer pays the £35 activation charge, not the consumer, and that the charge amount is variable.

The idea is to hand pricing control back to the games companies, so when a new title is released the activation charge for it will be high to prevent game shops selling second hand versions of just released titles for a few pounds less than new copies and therefore directly stealing sales away from the game publisher.

I can't see any objection to this really. Console gamers will adapt to the phasing out of a second hand market the same way PC gamers have.

And I do love the armchair economists trying to justify buying cheaper second hand games with confused arguments about cars.

Game DVDs are perfect digital replicas of short term value entertainment. They are different to cars and should be sold differently.

Steam and PSN and Xbox Arcade all work brilliantly, are cheap and have no second hand market whatsoever.. console gamers just have to join the 21st century.


May 24, 2013, 4:27 pm

Nice comments, All I can say is as long as there is mechanism in place and too much more than the current second market values, then the market will continue to thrive. Atleast they're not saying no to second hand games completely. On the other hand if PS4 does not implement anything at all then consumers might be more drawn to it, but on the other hand the game developers might be drawn into exclusives more easily based on that too.

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