In the future, we won't buy games on discs and used games will become a thing of the past and you'll have to pay for games again if you get someone else's copy. As a result, GameStop will be ruined, and the idea of used games won't even exist this time next year.

As it turns out, we're not big fans of change. Gamers grumbled mightily when Microsoft first unveiled its new Xbox One. Could we buy and trade used games? Could we lend games? What happened if we didn't want to be online all the time? Microsoft was quiet -- or worse. Microsoft executives suggested that if gamers didn't want to be online, they could keep their Xbox 360s and be happy that they had that much.

In stark contrast, when Sony unveiled the details of its PlayStation 4, gamers went nuts. The company wasn't going to worry about digital rights on its first-party games, with third-party titles unlikely to carry any restrictions either. Used games would work just like they currently do. If you want to be online, great. If not, you can still play your games. 


The Xbox backlash was intense and focused. Consumers wanted Microsoft to capitulate in the face of seemingly overwhelming support of the PlayStation features. In a rare case of a huge company listening to its fan base, Microsoft caved in yesterday, and announced that it would follow in the footsteps of Sony.

GameStop lives to fight another day
Just like the used games it sells, GameStop feels like it's been pushed to its limits, tested over and over, and then repacked to be sold on. Microsoft's change of heart is one more scratch buffed out of the GameStop disc. Shares jumped 6% in early trading today, as the market realized that the current game model isn't going anywhere just yet.

If gamers have anything to say about it, the system may never change. And in a statement made to The Penny Arcade Report, Xbox's chief product executive said, "The beauty of our fans, frankly, is that they tell you exactly what they love, they tell you what they don't love, and what we've been doing for the past ten years is to give people more of what they love and less of what they decide they don't want."

The bottom line
At the bottom of all this are two points. First, GameStop isn't going to go anywhere anytime soon. Having made it through the difficult "waiting for an announcement" phase, the company can now coast along until the new systems actually come out. GameStop investors should be ecstatic.

The second highlight of this whole thing is how poorly Microsoft planned the Xbox. While the final product is going to make everyone happy, the company clearly didn't see this coming. In a separate statement, Don Mattrick, president of Microsoft's interactive entertainment business, said:

You told us how much you loved the flexibility you have today with games delivered on disc. The ability to lend, share, and resell these games at your discretion is of incredible importance to you. Also important to you is the freedom to play offline, for any length of time, anywhere in the world. 

Why, in the name of Icarus, would that be a revelation? That's information that the company should have either known intuitively or discovered in early market research. To be forced to backtrack on an announcement in the face of a competitor does not speak to the division's ability to plan ahead.

Luckily for Microsoft investors, the stumble is unlikely to make a meaningful difference in sales once the new machines are actually released. The small amount of embarrassment now has allowed the Xbox to pull back even with the PlayStation. Now all we need to do is wait for the games.

It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In a new premium report on Microsoft, a Motley Fool analyst explains that while the opportunity is huge, so are the challenges. The report includes regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

The article The Future of Gaming Looks Like the History of Gaming originally appeared on Fool.com.

Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool owns shares of GameStop and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Investing in Real Estate

Learn the basics of investing in real estate.

View Course »

Basics of Diversification

Learn one of the fundamental concepts of building a portfolio.

View Course »

Add a Comment

*0 / 3000 Character Maximum