The Beginning Of The End For GameStop

The folks over at GameStop are probably ready to forget that yesterday ever happened, but it's typically my job to twist the knife, so here goes. Sorry, GameStop.

Yesterday, game journalists got wind of a seemingly innocuous patent being filed by Sony. Developers file patents constantly, and it's typically our job to comb through the boring bits and search for juicy little fragments. As journalists started to digest this particular document, it became apparent that Sony had a pretty nefarious plan up their sleeve.

The patent itself was filed to protect a method for "tagging" games that are being played across multiple consoles. The ultimate purpose of this technology is to control the way secondhand games are distributed. Here's a bit of legalese from the document's abstract:


"A game playing system includes a use permission tag provided for use in a game disk for a user of a game, a disk drive, and a reproduction device for reproducing the game. The disk drive reads out a disk ID from the game disk. When the game is to be played, the reproduction device conveys the disk ID and a player ID to the use permission tag. The use permission tag stores the terms of use of the game and determines whether a combination of the disk ID and the player ID conveyed from the reproduction device fulfills the terms of use or not."


Obviously, the inability to resell a video game is a mildly irritating setback for gamers, but it's a potentially business-killing problem for GameStop. This is a company that's built their empire on used game sales. Sure, they sell recently released titles as well, but the cost/benefit ratio is far more appealing for used titles.

Used game sales are such an integral part of the company's business that investors immediately started moving away from GameStop's stock after the news of Sony's patent hit the net. By the time the stock market closed yesterday, GameStop’s trading price had fallen by five percent (about $1.30).


I'm obviously not worried about a potential GameStop Armageddon anytime soon, but if Sony does go through with their plan, it could mean a steep drop in used game sales for their next generation console. Plus, with the drastic increase in digital sales, it's going to be hard for GameStop to maintain its foothold without drastically changing their business model.

I've got my fingers crossed for you, GameStop. You wanna buy my copy of Tank! Tank! Tank!? I swear, that game makes me physically ill every time I walk by the shelf.



Josh Engen
News Director
Date: January 4, 2013


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