The rumour surfaced in January, when inside industry sources claimed that Microsoft's next system would have a method to limit or lock out used games.
"We think it's unlikely that there would be that next-gen console because the model simply hasn't been proven to work," GameStop CEO Paul Raines said in a call with investors.
"Remember, used video games have a residual value. Remember GameStop generates $1.2 billion of trade credits around the world with our used game model. So, consider taking used games out of that, you'd have to find new ways to sell the games."
"This is the kind of news that gets out in the industry and gets people worked up and hyper-ventilating and excited," Raines added.
He stated that most of the $1.2 billion in trade credit goes back into buying video games, making new games more affordable.
Rather than replacing new game sales, Raines claims that pre-owned games are an opening price point for users who aren't ready to invest in a new game but still want to experience console games.
Microsoft has stated that it will not announce a new Xbox console at E3 2012.