GameStop's Opinion on Xbox 720 Activation Code Rumors

By Luke Caulfield , Updated Feb 07, 2013 05:56 PM EST

More fallout from a move that Microsoft may or may not even make.

Yesterday, rumors were ciruclating thanks to an "insider source" who, according to EDGE, with "first hand experience of Microsoft's next-gen console," that the Xbox 720 will always require an online connection to function and might even go so far as to require an activation code for its games as well.

EDGE reports that Microsoft will still have physical games available, in the form of 50GB Blu-ray discs, but that the activation codes would render the games as valueless "beyond the initial user," essentially destroying any used game market. When the rumor hit, GameStop shares fell 6 percent.

Obviously, GameStop wouldn't be in favor of such a move, as it would serve as just another nail in the retailer's coffin. Close to half of the business's profits come from the sale of used games, consoles, and other second hand products. Speaking with Bloomberg, the chain's Vice President of public and investor relations, Matt Hodges, said sales of new tech would also be diminished should the machines "limit portability, or not play new physical games." Yes, and water is also wet.

A response from Microsoft regarding the rumor has done little to waylay fears, neither confirming nor denying the rumor, saying only, "Microsoft does not comment on rumors or speculation. We are always thinking about what is next for our platform, but we don't have anything further to share at this time."

Given the backlash Sony when they were rumored to be doing something similar for their new console, I can't imagine Microsoft allowing this to come to pass. As far as rumors go, this one seems a bit out there, given audience reaction, but nothing is confirmed until Microsoft gives the official word that the console is a go, and at the moment, the company isn't commenting "on rumors or speculation."

Whatever the new consoles are using to run, and what kind of tech they'll feature, we'll all find out whenever either company decides to finally break their silence and formally announce their specific consoles, whether it's at their own promotional show, or E3, as most seem to expect.

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