Arvind Bhatia - Sterne Agee
"We believe blocking used games would cause a consumer backlash. That is why despite the fact technology to block used game already exists, Microsoft and Sony are unlikely to take a stance that is unfriendly to consumers. Also, GameStop, which is obviously the leader in used games, remains a critical partner for the console companies. It has 25 percent to 30 percent market share in the Xbox 360 and PS3 new software markets and often in the initial weeks of a new game launch garners 50 percent type market share. This is another reason the console companies' actions are unlikely to be harsh. Ultimately, the console companies will continue to aggressively push DLC as a way to prolong the life of their games and slow down sales of used. Interestingly, Nintendo has not complained much about used games being a factor. Do you know why? We think it's because customers who buy Nintendo games often play them for years i.e., they don't sell them used for quite a long time."