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GameStop Falls on Microsoft's Stupidity

http://www.fool.com/investing/general/2013/02/06/gamestop-falls-on-microsofts-stupidity.aspx

Rick Aristotle Munarriz
February 6, 2013

They're shoveling more dirt on GameStop (NYSE: GME), but this time it's not the retailer's fault.

The small-box seller of video games and gear is stumbling after a renewed report suggesting that Microsoft's (NASDAQ: MSFT) new Xbox will not support used software titles. GameStop's shares fell as much as 11% this morning, and rightfully so. If there is no longer a market for secondhand games, the retailer will miss out on its most profitable business of buying back old releases for a pittance and reselling them at juicy markups.

Edge -- a U.K. magazine and website for die-hard gamers -- reports that the next generation of Xbox consoles will require activation codes on software installations that can only be used once. Since the state-of-the-art system also reportedly requires continuous online connectivity, there's no legal way to circumvent this safeguard.

This isn't a new story. Gaming enthusiast website Kotaku reported the same thing last summer.

"I've heard from one reliable industry source that Microsoft intends to incorporate some sort of anti-used game system as part of their so-called Xbox 720," Kotaku's Stephen Totilo wrote at the time.

Well, more details are starting to come out on the anti-used game protection, and it's not going to be pretty for GameStop. The shift to digital delivery was already making the str