Could Microsoft be about to ban second hand gaming?

Xbox picThere’s no better way to scrape together the cash you need for new releases than to trade in or sell older games that you don’t play anymore.

But it seems, at least if you buy the new Xbox 720, you might not be able to play second-hand games on your new console.

It is understood owners of Microsoft’s next generation console will be compelled to sign in online every time they play and register their games to their account.

The expected move has been revealed by developers and reported in leading video games magazine Edge, which said: “It is believed that games purchased on disc will ship with activation codes and will have no value beyond the initial user.”

So far, Microsoft hasn’t commented on the potential plans, saying only: “We do not comment on rumours 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.”

XboxIf true, the move would be a huge blow to the second hand games market which, in Britain alone, was worth a whopping £90m to retailers in the fourth quarter of 2011, according to latest statistics from industry analysts NPD.

The report has already led to shares in GameStop, a major American second-hand games retailer, plummeting.

It has also sparked fears that hackers would simply see the new rules as a challenge to circumvent.

But analysts have moved to allay any concerns, saying it was unlikely the new Xbox would not support used games.

Michael Oslon from investment bank and asset management firm Piper Jaffray said: “We are confident that both the new PlayStation and the new Xbox will support used games.”

Instead of being blocked from using second-hand games altogether, experts say any new online activation system used by Microsoft pre-ownedcould reward those who buy new games by giving them access to extra levels or special features, leading to two-tier gaming.

The suggestions come as new rumours about the Xbox 720 say while it will always be connected to the internet, games could still be sold on a physical media as it will include a Blu-Ray drive. Microsoft though is keen for customers to buy through an online store, in a bid to offer more flexibility over pricing.

The new Xbox 720 is expected to come with a more advanced version of Microsoft’s industry-leading Kinect motion controller and a powerful AMD eight-core 1.6GHz CPU.

It comes as rivals Sony are preparing to introduce their new PlayStation 4 at a special event in New York, scheduled to take place on February 20.

Microsoft is expected to wait until the summer, unveiling its Xbox 720 at the E3 video games show at the Los Angeles convention centre in June. Speculation had been mounting about when the 720 would be officially unveiled but Lawrence Hryb, who is director of programming for Xbox Live answered that by posting a timer on his blog, which is now counting down to the event.