GameStop: Analysis to Digest as You Play the Stock

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The following is an excerpt from a report compiled by Michael Pachter of Wedbush Securities.

Sony Computer Entertainment Japan (NYSE:SNE) has secured a patent for technology that ties the next PlayStation (“PS4”) game disks to the user. Each new game will have a contactless radio frequency tag (disc ID) that is tied to a specific player account (player ID), allowing the console to match the disc ID and player ID and verify that terms of use have been met.

Various Internet news reports have interpreted the patent as a signal that Sony intends to block used games from being played on its PS4.  The news reports have reasoned that Sony would include such matching only to prevent games from being played by anyone other than the initial purchaser.

While it is possible that Sony intends to block the playing of used games, we do not think it is a likely result, for several reasons…

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