GameStop (GME) Falls As Ruling Could Impact Used Game Business

October 12, 2010 9:56 AM EDT
GameStop (NYSE: GME) is seeing some pressure this morning on reports that a court ruling could hurt the company's used game business.

The Dallas News reported today that a recent federal appeals court ruling could allow game publishers to prohibit sales of used games.

A U.S appeals court decided in the Vernor vs. Autodesk case that software publishers can prohibit buyers of its software from reselling to others users.

If upheld the ruling could impact GameStop, eBay (Nasdaq: EBAY), libraries, garage sales, and any other person or entity selling used games, legal analyst say.

GameStop would be one of the most impacted, as used games accounted for 31.4% of the companies second quarter sales and also carry much higher profit margins.

Shares of GME are down 2.8 percent to $19.80.

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used product ruling
Steve Reid on 2010-10-12 19:08:22
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The Dallas Morning News article quoted "legal analysts" as the source for the possible end to all resales of copyrighted materials. No mention of who these "analysts" are. Even an attorney with scraped knees from ambulance chasing could see that this case involves an additional signed agreement to the sale, which specifically prohibits reselling the product. Good luck on getting college kids to agree to pulp their $150 chemistry book at the end of the semester. No such agreements currently accompany the sale of books in bookstores, and it is doubtful that such an intelligent group of consumers would allow this to occur.

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