Upcoming furvor over the new console hardware has boiled over into the Internet's usual escape resovoirs of arguments and hipster contrarian counter-arguments. Specifically, the idea that console hardware will now attach digital-style, non-transferrable licensing to packaged products, ostensibly to counteract actions on behalf of certain retailers to cut game publishers and developers out of their revenue stream through selling used games. More specifically: screw GameStop, we're not letting you give your games to other people.
In the world of game publishing there have generally been several licensing models - that is, schemes which determine who is authorized and not authorized to play a particular piece of content. We will discuss two which are relevant to us. The first and much older of the two models is the packaged software licensing model, whereby possession of an authorized copy of a game (typically containing game code) placed in the system in question authorizes you to play the game. This has been the most popular licensing model as it has been historically more viable than other models and has certain advantages vis a vis excluding potential competition and not requiring a minimum level of communications infrastructure to operate.
Newly added is the digital delivery licensing model, which operates in a different fashion. The basic idea is that authorization to play content is tied to a particular account and in order to play that content you must be logged into that account. Each service has particular different tweaks - for example, one system might allow five machines to be logged into a particular account at one time, while another service might only allow one login, but also allow you to access the content from the original machine you downloaded it from irregardless of logged-in status. A key wrinkle of this is that content is generally non-transferrable: once you 'own' it, you 'own' it forever and can't give it to someone else, short of trading the information needed to access the account, which is generally considered a violation of the service agreement.
In the packaged software realm, publishers rely on retailers to actually sell the games to the consumer and this has become quite a bit of a quandry as game budget growth has outstripped game profits growth. The result is that the industry sells $60 games which net these retailers a few dollars of profit at most. This is not nearly enough money to operate an actual business on, of course, so retailers have turned to used games. The profits on those are much higher, as game retailers can generally control how much they spend on used games coming in to ensure a steady profit. Likewise retailers have also pushed to ensure used games get sold as much as possible.
Conceptually the used game model is similar to what would happen if a retailer could buy a single copy of the game and sell it multiple times, i.e. commercial piracy. Naturally, their costs are lower and their profits greater, and the publishers and developers don't get any money from this process. Likewise, people who buy used games do so thinking they're just a way to save a few dollars on a game. Used games are actually more harmful to publishers and developers than piracy is, because it's all the harm of piracy (not paying the devs) with all the convenience of buying a legitimate copy.
That being said, proposed licensing systems to block used game sales are extremely heavy handed and should not be used, period. It's bad UX.
This is very simple. When I have a piece of physical property I own it.
Since the definition of 'ownership' is getting muddied and watered down with digital distribution systems redefining what it means to pay for a product, I'll define it here: Ownership is the right to arbitrarily exploit (in the capitalistic sense) and reassign said right to arbitrarily exploit property. If you cannot exploit the property then what you have is not ownership but some kind of lesser occupancy right.
Likewise the current standard has been that packaged software is ownership and digitally distributed software isn't. This has been excusable due to the fact that digitally distributed goods are more abstract and thus would probably be subject to different ownership rules. That's fine, actually: in most cases, we're trading one thing (total ownership) for another (convenience and cheaper games). The case where we aren't getting convenience is usually in the case of Nintendo systems, which lock authorizations to the physical hardware the software was purchased on, such that moving software from one machine to another is typically considered a service operation to be conducted by Nintendo staff. You would imagine this would be a stupid system and you're right.
However, the proposed rules regarding physical software products plan to marry the downsides of digital distribution (not being able to transfer your games) alongside the inconvenience of having to go to a store to buy a game. In that case, why the hell would I want to buy a physical game product ever if my games are essentially download codes with an offline cache? (said cache already out of date anyway because of last-minute patching) Microsoft's proposed rules solve this, by letting you transfer a game... to someone on your friends list... if they've been on that list for 30 days... and only once.
Strangely enough game stores themselves will also be allowed to run the typical used games business, for the most part. Retailers will have to register with Microsoft, and what games can be sold is determined on a case-by-case basis as game publishers will have total control of what retailers, if any, can sell games, and how much of a cut they take from the retailer's profit. This sounds like the kind of half-way solution that winds up exascerbating both sides' problems. Retailers have to negotiate to sell used games now, except they're negotiating from a point where they have little leverage to begin with. They can't sell the games without the publisher's permission, end of story. Small retailers will most likely be strong-armed into the same shitty profit margins they get on new games, while big retailers will most likely be strong-arming publishers into giving them bigger margins. Instead of a level playing field where everyone either can or can't sell used games, we have a system where the big crush the small.
A key issue with all of these concessions to ownership is the fact that we need a system to revoke digital licenses to facilitate transfer. Effective revocation cannot occur if the revoked user doesn't connect their box to the Internet, so Microsoft decided that daily Internet check-ins are required to play your games. If you go 24 hours without an Internet connection, your games stop working, so you can't get away with selling an already-installed game and then not connecting your console to the Internet to get away with playing a revoked copy.
All the previous issues just made me want to go to digital only anyway; which I'm already used to, because I buy games from Steam anyway. But the revocation system makes the whole scheme unpalatable in any distribution model. Digital distribution systems don't generally allow users to transfer content between accounts specifically so they can justify having offline modes. And, unlike content transferrability, offline mode is a very important part of the system.