Microsoft previously said that it would allow games publishers to opt out of allowing the resale of Xbox One games and to let them charge fees associated with that process. Now it says it won’t impose any restrictions on the resale of games.
The company’s reversal has only postponed changes that will most likely result in used games fading away, though.
That’s because it’s a question of when, not if, the physical discs on which most console games are now delivered go away. Mobile and PC games have already ushered in the era of downloadable games. People who buy games online can’t typically resell them because of the licensing restrictions that apply to digital media, just as they can’t resell movies they buy on iTunes.
In an important and overlooked development, Microsoft recently showed just how seriously it intended to nudge its customers toward the digital downloading of games. The company said digital versions of Xbox One games would be available on the same day that disc-based versions of those same games went on sale.
New to the unfolding story here but what I have been hearing in passing is this topic you bring up briefly that MSFT tried to cut GME out but then SONY went on a publicity spree to discredit MSFT and boost their own sales which prompted MSFT to reverse their restrictions decision. My take-way from this limited understanding is that in the long run GME will ultimately become a purveyor of buggy whips, the Good Will Store of games. I also understand that the short interest is quite high which may explain the upward price action the last month; short-stopped out-short-stopped out, etc.
Technically it had selling volume off the top on May 2nd and a very high-volume selling bar on May 24th with a low of 30.94. That low was never retested, so that price will be re-visited. The higher-volume up days since then marked limited upside movement given the volume suggesting institutional selling coming in. So even though the trend is up, it is near the top of the rising channel and showing a lack of thrust and there is supply (selling) in the background (May 20-24). The high short interest makes it difficult to short though.
Your assumption is only partially correct. It's true that we are moving toward digital media but that's more in the area of music and movies more so than video games unless it's games on the PC. Digital games need hd space and to be online which a good chunk of gamers feel that's a restriction. MSFT reversal is indicative of how strong the used game/physical disc crowd is and their cost/benefits math still lean toward physical games. A lot of people tendency is to trade in games, wait for a price drop to buy games or buy used games, trade games with friends etc...That is something the digital world cannot satisfy especially in this difficult economic environment. BTW Gamestop does use the digital space to release pre-order special/discounts for nearly all the games so they do use space. Wall Street doesn't focus too much on the long run, right now what's on the horizon is the release of two new console systems that have been long anticipated. It is pricing in future revenues of the new console sales and some additional game sales at this point. It's hype, sure, but shorts have lost their wallet trying to bet against hype in the last few years in most cases.