The Xbox One looks fantastic, but one thing that gamers have been worried about is their ability to play pre-owned games on the console. The good news is that Microsoft has confirmed that this will be allowed, users can buy and install pre-owned games on their machines no problem at all. The bad news? It’s hinting that “a fee” will be charged in order to do so.

Now before we go reaching for our pitchforks and torches and set off on a witch hunt, lets take a look at exactly what Microsoft has said about it:

“We know there is some confusion around used games on Xbox One and wanted to provide a bit of clarification on exactly what we’ve confirmed today. While there have been many potential scenarios discussed, today we have only confirmed that we designed Xbox One to enable our customers to trade in and resell games at retail.”

“Beyond that, we have not confirmed any specific scenarios. Another piece of clarification around playing games at a friend’s house – should you choose to play your game at your friend’s house, there is no fee to play that game while you are signed in to your profile.”

So Microsoft knows there’s some “confusion” and its just gone and added to it.

The issue with pre-owned games is that the Xbox One will require games to be installed onto its 500GB hard drive before they can be played. This makes sense because of the way the console is built – it uses a Blu-ray drive that has much slower read times that regular DVD drives. The advantage of this method is that once installed, games can then be played without the physical disc running in the drive, unlike the PS3 for example.

Given this set up, Microsoft obviously needs some kind of system to tie specific copies of each game to each console, otherwise we’d just have a mad free-for-all with gamers swapping games all the time and never paying a cent for them. Hence the need to login with your Xbox Live account and register each game you buy.

Microsoft’s Power Play – Bad News For Resellers & Gamers Alike

Unfortunately, this is where we get a bit worried at Microsoft’s intentions. Speaking to Wired.com, a Microsoft representative revealed that the company will be charging a fee for Xbox One owners to install pre-owned games on their machines, although he didn’t say how much that fee would be. In a separate interview with the Kotaku gaming website, Microsoft’s corporate vice president Phil Harrison said that the company would announce its plans for pre-owned games very soon:

“We will have a solution – we’re not talking about it today – for you to be able to trade previously played games online.”

No question about it then – this looks like a clear attempt by Microsoft to muscle in on what is a massively profitable pre-owned games market. After all, it doesn’t HAVE to charge a fee – it could just as easily set up a system in which games are invalidated once installed on a second machine, unless the owner contacts them to say its sold, for example.

Possible business models that Microsoft might adopt include allowing gamers to ‘trade in’ their games for discounts on titles bought in its Xbox Live Store, something that might appeal to fans of sports games at least – such titles are often updated on an annual basis, and gamers often trade in their older versions when that happens in order to get the new version at a discount.

In this scenario, it’ll be the retailers who lose out most. Gamestop, one of the biggest resellers of pre-owned games in the US, lost 5% of its share value overnight due to worries that Microsoft will get into the business, and there’s every reason to think this panic will increase when Redmond confirms its plans.

The other big worry is that gamers will also lose out – if Microsoft is demanding a cut from every transaction, even ones between friends, it’s basically taking that money from the sellers themselves. If second-hand game buyers can’t avoid paying Microsoft’s fee, then they’re going to insist that the sellers give them a discount, otherwise they’d be better off just buying a new copy themselves.

Sony’s Advantage?

With Microsoft’s plans in mind, all eyes will be on Sony when it launches the PlayStation 4 at next month’s E3 event in Los Angeles. So far, the Japanese company has played its cards close to its chest. A representative told Eurogamer that it didn’t plan to block used games, but it didn’t specify whether or not any fees would be involved.

It would seem that there are two possibilities in this case – the first one is that Sony might collude with Microsoft to carve up the pre-owned games market all for themselves, or the second is that it might try to take advantage of the situation by maintaining the status quo.

The first option will infuriate gamers but there’s very little they could do about it. However the second one could well prove disastrous for Microsoft – if it happened, then surely legions of gamers would flock en mass to the PS4 if it meant having the freedom to do what they want with the games they buy.

Of course, there’s also the argument that all of this could soon become irrelevant anyway. The games industry seems to be rapidly moving towards a point where all sales will eventually become digital, something that would spell the end of physical media that can be swapped or traded for money.