The Xbox One will use a stricter DRM scheme than game consoles before it, requiring some manner of Internet authentication to play the games that you purchase for the system on Blu-ray disc, but despite several attempts from Microsoft spokespeople to clarify matters, just how overbearing it will be remains unclear.

An exclusive report that landed just after the reveal on Wired suggests that a disc-bought game requires Internet activation upon installation:

What follows naturally from this is that each disc would have to be tied to a unique Xbox Live account, else you could take a single disc and pass it between everyone you know and copy the game over and over. Since this is clearly not going to happen, each disc must then only install for a single owner.

Microsoft did say that if a disc was used with a second account, that owner would be given the option to pay a fee and install the game from the disc, which would then mean that the new account would also own the game and could play it without the disc.

Xbox community figureheard Larry Major Nelson Hyrb then attempted to clear things up a little:

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.

And speaking to Kotaku executive Phil Harrison said some words on the subject too:

"There are many devices in your life that require the Internet to function," he said. "Xbox One is no different in that it requires, at some point in the beginning and at various times through its on state, to connect to our cloud and to our Internet. That is to deliver Xbox Live functionality, that is to deliver download content to you, that is to deliver some of the innovations around TV and entertainment that we showed today. But it doesn’t require it to be online all the time."

A separate Kotaku article, presumably from the same interview goes further to explain that the 'fee' that Wired had described, is actually the full price of purchasing the game from Xbox LIVE:

But what if you want to bring a game disc to a friend's house and play there? You'll have to pay a fee—and not just some sort of activation fee, but the actual price of that game—in order to use a game's code on a friend's account. Think of it like a new game, Harrison said.

"The bits that are on that disc, you can give it to your friend and they can install it on an Xbox One," he said. "They would then have to purchase the right to play that game through Xbox Live."

"They would be paying the same price we paid, or less?" we asked.

"Let’s assume it’s a new game, so the answer is yes, it will be the same price," Harrison said.

But that doesn't mean used games are dead. In fact, Harrison told us, you'll be able to sell your Xbox One games online.

"We will have a solution—we’re not talking about it today—for you to be able to trade your previously-played games online," Harrison said.

Combining these various reports here's our best effort to summarise this whole mess:

The Xbox One will require an Internet connection when you install a game purchased on Blu-ray disc, the game data will be installed from the disc, but that disc's unique identifier (presumably a serial key) will be linked to your Xbox Live account --much like Steamworks games on PC are-- permitting you to reinstall it from your digital locker at any point in the future, without needing the disc, but preventing the same disc activation from being used on another Xbox One console, unless your Xbox Live account is also used.

Activating the same disc in another Xbox One console, with another Xbox Live account, will necessitate the new user to repurchase the game at the current Xbox Marketplace price, however, once they own the digital license to the game, they can use the disc to install the game, rather than having to download the entire game from Internet servers.

A small consolation is that Microsoft are planning to somehow facilitate transfer of the digital ownership for games, online between Xbox Live users. They're "not talking about it yet", but we presume this would function by simply deactivating the game from the first owner's Xbox Live account, and activating the license to download and play that game on the second owners account, with Microsoft taking a percentage cut of the user to user sale price.

It would even be technically possible for Microsoft to allow used game licenses to be digitally traded to the accounts of third party facilitators like GameStop and EB Games, for them to resell to other customers, but that's pure speculation and admittedly, pretty unlikely.

Playing single-player and same-screen multiplayer games offline will be possible, but some manner of authorisation check will prohibit playing for longer than (Phil Harrison "thinks") 24 hours. Additionally, the decision will ultimately be up to individual publishers, as to whether they want online connectivity to be mandatory in their single-player games.

Notably, previous comments from Sony have confirmed none of these measures are required for disc-bought games on the upcoming PlayStation 4 console, which perhaps explains Microsoft's to underplay their significance, but it will no doubt serve as a major point of difference for some consumers.

And they expect to be competitive with this business practice. Microshaft are about to get a rude wake-up call.

Would we be able to buy CD-keys and activate them without the physical disk like we can through Steam?

It sounds like it might be possible, that could be a game changer for making console gaming more affordable for Australians.

I think this is good. Will put eb out of business and hopefully game prices drop to around 50 dollars.

so it's pretty much how steam works except you can also sell them (which you can't on steam).

Why care about taking the disc to a mates place? Just log into your own xbox account. Same as if you went to a mates place and played something on the PC via steam. (or take it just to install but still log into your own account)

I think this is good. Will put eb out of business and hopefully game prices drop to around 50 dollars.

never.going.to.happen. Game publishers have seen that gamers are willing to pay stupid amounts for games, they'll never go back now. If anything they'll get more expensive to "support all the bandwidth and servers needed for authentications"

"I think this is good. Will put EB out of business and hopefully game prices drop to around 50 dollars."

Why do you think EB going out of business would be good?

Like or dislike their practices, think about it a little bit. Would a retailer going under be beneficial for the Aussie industry, Aussie gamers or somehow affect the prices of games in Australia (which were set high long before EB become the major retailer here)? No? Yeah, it doesn't make much sense when you talk it through....

Like or dislike their practices, think about it a little bit. Would a retailer going under be beneficial for the Aussie industry, Aussie gamers or somehow affect the prices of games in Australia (which were set high long before EB become the major retailer here)? No? Yeah, it doesn't make much sense when you talk it through....

This is false logic, just because prices were high before EB became the major retailer in Australia does not automatically mean that prices will stay high if EB goes out of business now.
It's very easy to ask questions that are not clear cut when you rudely answer them yourself without any information to back up what you're saying.

For what it's worth I don't know whether prices would go down or not in such a situation, and it wouldn't exactly be great for the retail industry, but I do think it would be beneficial for Australian gamers because it would force them to shop around for other places to buy games, and would lead them to realise that EB was charging them more than any other retailer.

spot the eb employee

That is classic Microsoft, they couldn't make s*** simple to save their lives! Especially on pricing/options/licenses, just look at the black hole that is Windows licensing!

Still, if it is like steam with user-to-user swapping/sales, then that sounds ace. Xbox with a Steam type thing for most games from the cloud is great. Who the f*** doesn't have broadband or buys physical disks when it can all be kept in the online locker? I don't and won't in the future. One of the reasons I love Steam.

spot the eb employee

Ooh ooh, I can do this, I'm good at these games.

Wait... wait... there he is!
http://oi41.tinypic.com/a2fccj.jpg

The hat was a dead giveaway.

What makes anyone think prices would drop? MS would just pocket more money for themselves. Just look at EA, Ubisoft, etc online stores - we still have AU prices to pay for digital products.
The concept of selling console games to other users online via Microsoft makes little sense to me - say user1 buys a game for $80, plays it and sells it back to Microsoft for $30 who then sell it on for $50. User1 paid $50, user2 paid $50 and M$ made $100 all up. Why not just sell games for $50 or even $40 to start with. It costs nothing to generate a license code. MS doesn't need to recover them.
Seriously I wouldn't care if you can't trade used games if games were half their existing price.

Just look at EA, Ubisoft, etc online stores - we still have AU prices to pay for digital products.

This is true, but one of the excuses given by publishers for charging Australian markups on digital-only purchases is that they don't want to undercut the bricks and mortar retail stores they are supplying to.

Of course that's just an excuse, and of course prices in stores would still be heavily marked up, but average prices of games in Australia would definitely be lower without EB.

That is classic Microsoft, they couldn't make s*** simple to save their lives! Especially on pricing/options/licenses, just look at the black hole that is Windows licensing!Still, if it is like steam with user-to-user swapping/sales, then that sounds ace. Xbox with a Steam type thing for most games from the cloud is great. Who the f*** doesn't have broadband or buys physical disks when it can all be kept in the online locker? I don't and won't in the future. One of the reasons I love Steam.

I still buy discs because like it or not, Australia sucks a big fat dick as far as internet goes. You might have great internets but a large number of people don't.

But what if you want to bring a game disc to a friend's house and play there? You'll have to pay a fee—and not just some sort of activation fee, but the actual price of that game—in order to use a game's code on a friend's account. Think of it like a new game, Harrison said. "The bits that are on that disc, you can give it to your friend and they can install it on an Xbox One," he said. "They would then have to purchase the right to play that game through Xbox Live."

It's been ages since I've walked into a video store, much less rented a game but doesn't this activation fee negate game rentals?

I sense a lot of console whining coming on. As someone else said, sounds a lot like Steam with the bonus of actually being able to sell your titles. How mad would that be on Steam. I could transfer all my titles between accounts....grrr.

And they expect to be competitive with this business practice. Microshaft are about to get a rude wake-up call.

the sad thing is they wont, all you have to do is look at EA, what happened with sim city, even after all the anger, terrible business practices people weren't even will to DELAY the purchase of the new cod game to send a message.

people will line up and pre-order the Xbox regardless.. fukin sheep.

This would be my model for trading games if I was Microsoft and wanted to be competitive in a big way that would put serious pressure on Sony:

Games can be traded between accounts by users, at a price agreed by the users. This price must be $10 or more.
Microsoft takes a small cut from that transaction, perhaps 5%.

This way users feel they are getting value from their trade ins, the buyers think they are getting a bargain and Microsoft gets a cut of the action. Everyone is a winner.

I would presume Microsoft have a model in action where publishers pay Microsoft a fee to release a game on the Xbox. That fee may a flat bulk rate, or a per unit sold fee.
Either way, lower volumes of games sold due to a much higher rate of game trading would impact this income stream. So the money made from skimming a little of each trade would have to meet or exceed this income, perhaps minus a bit for the significant positive PR that a trading scheme like this would generate.

From a publishers point of view, this system would suck. As they will have reduced sales volume. For the consumer this would be awesome, as in order to prevent game trading and increse new units being bought the games would have to boost their longevity and re playability. They will have to give strong incentive to make people not want to trade their game in.
In other words quality would be preferential to quantity.

However since publishers get screwed with that system, I doubt we will see it.

From a publishers point of view, this system would suck. As they will have reduced sales volume.

Many gamers don't have a problem paying MORE to pre-buy a game so they have it as quick as possible. Surely this is a large percentage of a game's sale figures?

Why not just sell games for $50 or even $40 to start with. It costs nothing to generate a license code. MS doesn't need to recover them.

Because for each second hand copy sold, the copy has already been paid for in full once.