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GameStop: Next-Gen Consoles 'Unlikely' To Block Used Games

by Jim Reilly on Mar 22, 2012 at 08:00 AM

Despite rumors suggesting otherwise, retailer GameStop believes next-generation consoles won't lock out used games. In January, a report surfaced that said the next Xbox console may put a lock on used games. GameStop CEO Paul Raines doesn't think that is the case.

“We think it’s unlikely that there would be that next-gen console because the model simply hasn’t been proven to work," he said today on the company's earnings call. "Remember that used video games have a residual value. Remember that GameStop generates $1.2 billion of trade credits around the world with our used games model.

"So, consider taking used games out of that, you'd have to find new ways to sell the games, and our partners at the console companies have great relationships with us."

Raines concluded saying, "The pre-owned business is not a cannibalistic business. If you follow the popular conventional wisdom you would think that pre-owned is replacing new. The truth is, pre-owned is an opening price-point category.  It's a category for the customer who's maybe not ready to invest in a new game, but wants to get into the console business.

"What we've done is created a way for that new leading edge consumer to dispose of their old games and that's what creates this great circle of life we talk about that so many try to imitate."

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