GameStop Boss Thinks the Next Xbox Will Play Used GamesS

The head of America's biggest chain of game shops said he thinks it is "unlikely" that the next Xbox will block the playing of used games.

"We think it's unlikely that there would be that next-gen console [that blocks used games] because the model simply hasn't been proven that works," Paul Raines, CEO of GameStop, told investors today during an earnings call.

In February, I reported that (quoting my own article), "Microsoft intends to incorporate some sort of anti-used game system as part of their so-called Xbox 720." I got that information from a reliable industry source who was in a position to know but not in a position to reveal their identity.

I remain confident that Microsoft has pitched its next console as one that would include an anti-used game system. But I was never able to clarify whether that meant the machine would block used games entirely, maybe only allow online play with originally-bought games or some other system.

Microsoft has repeatedly declined to comment on this or any other specifics related to its future hardware.

"Remember that used video games have a residual value," Raines continued. "Remember that GameStop generates $1.2 billion of trade credits around the world with our used game model. So, consider taking used games out of that, you'd have to find new ways to sell the games. And, our partners are good partners. The console companies have great relationships with us."

And then he raved about the PlayStation Vita and its new hybrid business model (digital downloads and store-bought game cards).

It's no surprise that GameStop would be against any console restrictions on used games, just as it's no surprise that publishers and developers, who make no direct money from the sale of used games, would cheer such a move. It's also clear that Apple has had no trouble selling its hardware—and the games for it—digitally, which prevents retailers from trading in any sort of "used app" business.

Things change while hardware is being developed and our own report that the next Xbox, code-named Durango, would support Blu-Ray has been complicated by the respected MCVUK reporting that the next Xbox will have no disc drive at all (On that, Raines said changing to a digital model would be a "risk" but that GameStop has its own aggressive systems and plans for selling content digitally.).

Have things changed? Or are we still just not seeing this elephant in full view?

Or is GameStop just giving their best guess? Earlier in the call Raines said that his team hears the same hardware rumors everyone hears, adding "We don't really have a lot more information than that."

I stand by my original reporting. We'll see what happens.

Q4 2011 GameStop Corp. Earnings Conference Call [Hear it at the 58-minute mark]