Pre-Owned Games Market a "Double-Edged Sword," Next-Gen Consoles Probably Not Backwards Compatible, Says EA
Written Wednesday, February 13, 2013 By Lee BradleyView author's profile
Publisher EA has shared its thoughts about the next generation of consoles, saying that the pre-owned games market is a “double-edged sword” and that it’s unlikely the next consoles will be backwards compatible.
Discussing the pre-owned market at the Goldman Sachs Technology and Internet Conference in San Francisco, EA’s Chief Financial Officer Blake Jorgensen said, "It's one of these classic double-edged swords.
“In one way the used game business has been critical for the health of the retail channel, and having a healthy retail channel is an important thing for us. The business will probably never be 100 per cent digital.
“Bandwidths are a constraint, and will continue to be a constraint for many years to come, which hold back the ability to do full digital downloads of some games.
"So having a healthy retail channel out there like GameStop or Best Buy or others is important, and to the extent that used games is important to them, I think that's a positive.
"Would we like to sell everything at full price and not have a used game market? Sure. But I think the used game market's a little like any other kind of market where it creates liquidity. The fact is, that liquidity benefits us in some fashion.
“So if someone goes in and trades in a game, there's a good chance they're going to buy another one of our games. And so if there's a liquid market, I think that that's not a bad thing at all.”
Jorgensen’s comments come following rumours that the next Xbox will block the use of pre-owned games and require an always-online connection.
"I can't really comment on where the next generation boxes are going to be relative to used games,” said Jorgensen. “I will say that the trend in the business is to have that always-on connectivity and connect with a customer, and to the extent that the software identifies a certain customer is going to create some issues going down the road in the used game market.
“But I do believe that the consumer likes it, and it's been good for the retail channel."
In addition to this, Jorgensen also said that he believes that the Xbox 720 and the PS4 will not be backwards compatible, as such functionality could impede the sales of next-gen consoles.
"An important thing to remember is that next-gen consoles will most likely not be backwards compatible,” he said. “And if you [play] multiplayer on a game, you'll most likely not be able to play with someone on a different generation.
“And so if you're a FIFA player and, and the soccer season's starting in August, and all your friends are playing FIFA, you're going to want to be on the same box that they're on.
“So if they all go out and buy a gen-four box if it comes out at Christmas, then you'll most likely do it. If they all hold on and continue to play on third-generation, you'll probably not see that box purchase until after the soccer season's over.”