That means video games discs users buy will not be limited to one Xbox One device, and players can share or trade in the games they have bought for other used games, just as they have been able to do in the past.
Microsoft Corp. said in a blog post Thursday that it will not charge a fee to retailers, publishers or gamers for transferring their old games.
The Xbox One, which goes on sale later this year, will need to be connected online at least once every 24 hours to work. Some players had been concerned that the console was going to require a constant Internet connection.
Users will be able to access their games from other consoles through an online library after installing them on their primary device, but they will need to connect to the Internet at least every hour. They will be able to watch live TV and Blu-ray and DVD movies on the Xbox One without an Internet connection, Microsoft said.
Microsoft will give more details about the Xbox One next week at the E3 video game conference in Los Angeles.
Shares of Microsoft rose 51 cents to $35.47 in late morning trading. GameStop Corp.'s shares rose $2.40, or 6.9 percent, to $37.02. The stock has traded in the 52-week range of $15.32 and $39.87.