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well yeah but what would be the insight for gamestop best buy to give a cut if there is no way to hold back resale without the DRM lock ???? it's not like those companies are charities and will give a cut to devs just out of goodness of heart????

I don't think it was that flawed.... I have games on discs right now lend to peeps living hundreds and some thousands of miles away from me (i'm done with them and they have not much resale value)....
I also don't believe that the majority of the market would have colluded that much to abuse the system, otherwise many other business models like Netflix would have collapsed by now....
and while I agree the thing was probably not perfect (therefore flawed) I'm convinced it could have worked because they would have generated revenue with other means.... once again while sharing the game would have been possible nothing was said on how it would have worked.... maybe every 15 min you would have had a pop up to buy the game (which could have been annoying enough to push people to buy... after all it works with music distribution), limited access to some features like gamer score or multiplayer (once again enough for some to do a purchase), then you have what I said before about not being able to play when you want if someone else plays the game, or loosing access when the person sells it.... and finally one of the biggest one I could see is in game advertising... if you grow your audience with a wider sharing capability you can also sell your advertising spot at a premium price.... especially since with the cloud sharing principle it was using would have given them quantifiable data which is not the case with disc based sharing if people are not connected....
and with all that we have to keep in mind that second hand sales would have been a source of revenue for devs....

so all in all I don't believe it was flawed enough to hurt devs any more than the current state of the business model....
but yeah it more than likely would have needed tweaks....