Will anti-used games policy spell the end for console gaming?

With the recent rumours regarding next-gen consoles (Sony’s Orbis and Microsoft’s Durango) having some kind of DRM protection against used games, will this direction the manufacturers are taking be the end of console gaming?

The recent rumours indicate that the next-gen consoles by Sony and Microsoft will apply some kind of DRM to protect against used copies. For Sony, they will require gamers to register their games to their PSN accounts, thus if you want to play that game on another machine; you would have to log-in to your PSN account. For Microsoft, they are rumoured to be going the rout of having the console always connected to the Internet. It was also rumored that both consoles will not be providing backwards compatibility so it is possible that to play older titles, one would have to download them off of the PSN and XBLA.

A big portion of the games industry comprises of the used game economy, GameStop alone generates $1.2 billion of revenue in a year from used games. Many game developers have lashed out against the practice of buying pre-owned games and argues that its one of the reasons that games are priced as high as they do. They just simply can’t afford to price their games lower for the reason that after the first few months, revenue will stop coming in due to used game copies floating around in the market.

But with game development cost rising higher and higher each year, and that number will definitely be going up for next-gen game development; will stopping used games help us consumers by helping to reduce the initial prices of games? It seems a little hard to believe though, with budgets easily reaching $30 million and taking out the used games market will handicap consumers providing them with less options.

Used games are also a way to introduce younger people into gaming, most of them have tight budgets and depend on their local retail store providing cheaper alternatives. A recent study by analyst firm Piper Jaffray showed that 65.9 percent of the 5,600 teenagers polled were losing interest in traditional video games. 66.2 percent of them were open to the idea of mobile gaming however, further implying that the threat of smartphones and tablets to console gaming is indeed real. With the lack of a cheaper alternative for the younger generation, those numbers would likely go up higher than ever.

The console manufacturers, backed by publishers and developers are definitely taking a huge risk if they decide to go along in this direction. They are determining what the consumers can and cannot spend their money on and that is always a dangerous thing. This plan might backfire on them and console gaming may cave as a result from it. If they however are able to reduce the initial price of games and get rid of paid DLCs and offer them up for free then all will be good and everybody wins (that’s if this was a perfect world).