Microsoft is launching the program in the fall and expects to have 100 titles available by the holidays. The move eliminates the need for gamers who upgrade to an Xbox One console from having to buy all new games.
But for GameStop (GME), so-called "backward integration" could choke off a rich source of revenue that had already been stifled by downloadable games. Can GameStop adapt to the new marketplace, or have gamers already moved onto the next best thing?
When Xbox One was announced in 2013, the details sent shock waves through GameStop's business plan, because gamers no longer had to buy a disk from a brick-and-mortar store and could instead download games from Microsoft online.
The convenience, however, came at a cost. No longer could gamers play used games on the Xbox One, a major drawback for the new console and a big stumbling block for GameStop, which made 38% of total sales from used games prior to the Xbox One launch.
Though GameStop had already developed customer-loyalty programs and invested in cloud gaming and digital distribution, the implications of Microsoft's announcement sent shares of GameStop 22% lower in one week.
Within two weeks of announcing the launch of Xbox One, the backlash from gamers made Microsoft reconsider its policy on games that are lent, resold and rented which Xbox 360 had allowed. Not surprisingly, sales of used games snapped back to 30% of total sales at GameStop the following quarter. They have leveled off at 20-28% since.