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[MonarchJT]

How much of this money would Sony lose if it decided to release its games on day one on PSN + premium?

Contrary to what they say it does not seem looking at real data that the bulk of their earnings come from there indeed probably the earnings of PSN services (already very close) would take that slice that would be missing from the dark green section.
Also because just like for gamepass it would be reasonable to expect that they would not stop selling individual titles out from the service and therefore many would continue to buy games digitally or physical

 

[Con-Z-epT]

Yes!

 

[mansoor1980]

yes , jim ryan said so and i believe him

 

[Lognor]

How much of the digital and packaged software numbers are from their own game sales vs their cut on third party games?
That combined 23% would surely decrease, but the add on content would go up as more people had access to these games on the subscription service. And of course the network services number would increase.

But either way, we don't know how these variables would change with day one releases on PS+. They could make more money or less. Too hard to tell.

 

[Holammer]

Yes, of course they would.
Microsoft putting new shit on Gamepass is only possible with their deep pockets. For Sony or Nintendo that's akin to stabbing yourself over and over, they can't do that! But MS can and they don't mind bleeding a lot to get ahead.

 

[BreakOut]

I think they would. And I genuinely think game quality would suffer, I really think that. It works right now, if the new system can put a lot of third-party stuff in it I will subscribe and feel content. I don’t mind paying for the first party stuff because I haven’t ever been disappointed. If I only have to pay for the high end games I’m already saving a lot of money. So yeah, I have my concerns, Sony can’t afford to lose money like Microsoft. It’s just not an option. Trying to build a subscriber base until you can profit from it.. I think they would collapse during that process. There would be a huge gap between profitable and major loss.

 

[MonarchJT]

Yes!

Honestly, even losing half of the total sales, plus or minus 2.8 (let's round up) it doesn't seem like an amount of money that cannot be recovered from the service

 

[Lognor]

Honestly, even losing half of the total sales, plus or minus 2.8 (let's round up) it doesn't seem like an amount of money that cannot be recovered from the service

Do you know the split between first party game sales and licensing fees from third parties? Only first party games would be day one, so total sales might not even be that affected. Most ps gamers are buying third party games, not first party.

 

[Neofire]

Most definitely, less people buyingthe games at full price=less money to them and the developers. Now if they had MS's money they could just pay the devs and say they are making a profit lol.

 

[Dick Jones]

 

[Bernd Lauert]

We're looking at roughly a billion dollars generated from first party game sales. If say half of that was gone due to day one, it's 500 million dollars "lost" in a year. Chump change tbh.

 

[BreakOut]

Although he left room for change, he really left it open so that he could change his mind Without looking like a total idiot. My thought on that is if that tier ever reaches a subscription number that would be high enough to not see a loss maybe they will start doing it. If they do do that at any point, it will be once the subscriber base is high enough that there is not a loss gap.

 

[MonarchJT]

Guys ...but the players would not vanish and they would still need to play on their console and the money that are going away from the dark green / orange part of the pie (full game sales) would presumably going to the dark blue section (PSN and services) which is not too far behind in the earnings brought by the sale of the games ... 3.6 vs around 5.5

The production costs of their games would not change with respect to the delivery method and they would not change this data pie chart

 

[Yoboman]

PS4 sold 1 billion units of software

A subscription service future will limit all that revenue to what the number of subscriptions are * active users over a generation

A number that is always going to be lower than the hardware shipped

It also places the onus on revenue being made up in DLC, MTX. In short, incomplete games

Also the subscription model relies heavily on paying for licenses rather than getting paid royalties. You essentially need to make all the money you would have made on software sales in order to pay the developers and publishers of content through subscription revenue and still have enough not to change your profitability

 

[MonarchJT]

Do you know the split between first party game sales and licensing fees from third parties? Only first party games would be day one, so total sales might not even be that affected. Most ps gamers are buying third party games, not first party.

exactly ! in fact i imaginated dividing the revenue by 2 ... exaggerating first party revenue probably

 

[eastcoastkody]

no. because nobody gonna buy PSN+ anyway. gonna be a ghost town thing that gets downsized and redone in a year or two

 

[Bernd Lauert]

Yes, of course they would.
Microsoft putting new shit on Gamepass is only possible with their deep pockets. For Sony or Nintendo that's akin to stabbing yourself over and over, they can't do that! But MS can and they don't mind bleeding a lot to get ahead.

MS is not bleeding money on Gamepass.

 

[MonarchJT]

PS4 sold 1 billion units of software

A subscription service future will limit all that revenue to what the number of subscriptions are * active users over a generation

A number that is always going to be lower than the hardware shipped

It also places the onus on revenue being made up in DLC, MTX. In short, incomplete games

you don't need to stop to sell full games to have a service that have day one releases
Not every owner of Xbox is a gamepass subscriber
And it has been reported several times that not all subscribers stop buying full games

 

[Lognor]

Guys ...but the players would not vanish and they would still need to play on their console and the money that are going away from the dark green / orange part of the pie (full game sales) would presumably going to the dark blue section (PSN and services) which is not too far behind in the earnings brought by the sale of the games ... 3.6 vs around 5.5

The production costs of their games would not change with respect to the delivery method and they would not change this data pie chart

Yep, AND the yellow part would increase too. Game Pass games do not typically include DLC. It's only the base game. So if Sony followed suit that DLC box should definitely increase as well since more people would have access to the game. And we've seen the kind of money mtx make. So why wouldn't Sony want to get those types of mtx games they will soon be focusing on into as many people's hands as possible.

I think it's even possible that Sony could make MORE money with day one games on PS+!

 

[KimDongHwan]

Imagine thinking you would know more about the real numbers than the actual company knowing their numbers and projections.

 

[MonarchJT]

Imagine thinking you would know more about the real numbers than the actual company knowing their numbers and projections.

yeah honestly it really seem that the reason why they are not conceding day one release are more based the way how they want directing the company more than losing money (which in reality would likely be moved to another section in earnings). Or probably to make customers truly believe in the story of "premium" games but in all honesty I think the reality is the number of studios you really need to have to keep such a good service. Sony probably can't double their studios in a short time .... here is this perhaps the most probable answer

 

[Yoboman]

you don't need to stop to sell full games to have a service that have day one releases
Not every owner of Xbox is a gamepass subscriber
And it has been reported several times that not all subscribers stop buying full games

We don't know that or to what degree because MS dont release their numbers. But I imagine Sony has modelling and better access to numbers than us

If it was as profitable as you seem to imagine they would be jumping in feet first

Not sure why its hard for you to believe it's not as profitable when Sony have directly stated its not. Do you think they dont want profit?

 

[Dr Bass]

Well Ive spent about 200 dollars on PS5 software in the last 3 months. I'm thinking of buying GT7 for another 70 dollars. I also am fully subbed on PS+.

Do you think Sony would rather just give me 270 dollars worth of software (and more) for the money I already paid for PS+ or would they rather me have paid that 270 dollars for four games? I'm also going to continue to buy full priced software for PS5 and Switch as time goes on. I like doing it, because I like supporting creators.

MS got my dollar for the 3 years of XBL gold -> GPU conversion back in January. I don't have to give them another cent for any first party offerings until 2025. By that time I will have easily spent over 1000 dollars between PS5 and Switch software.

Which business would you rather be in? Do you think Sony would "lose money" by including all their games on PS+ then, which I pay for anyway?

 

[kingfey]

If the users are paying $120-$180 a year, nope.
50m of those users, will bring $500m-$750m a month.

If Sony does release 6 day1 games on the service, they can pretty much get $6b-$9b.

That is if they want long term money printing machine.

 

[FMX]

They would if they didn't do day and date with PC. That is the key to Game Pass a lot of their exclusives are popular on PC as well. I am sure that Sony's will be as well.

 

[S0ULZB0URNE]

Yes /thread

 

[remember_spinal]

If they didn’t lose money they would do it.

Why wouldn’t sony want to make more money?

 

[Keihart]

If third parties are willing to put their games on PS+ or Gamepass why would sony not want to?
I think some of it is because they feel they have already almost saturated the PS+ subscriptors so it they gain wouldn't be comparable to all those subscriptors already paying 70 per game.
But mostly, it probably has to do with the output of their first party studios, they have no way to churn as much shit out as Gamepass, there is no reason to compete directly right now for them.

 

[kingfey]

Well Ive spent about 200 dollars on PS5 software in the last 3 months. I'm thinking of buying GT7 for another 70 dollars. I also am fully subbed on PS+.

Do you think Sony would rather just give me 270 dollars worth of software (and more) for the money I already paid for PS+ or would they rather me have paid that 270 dollars for four games? I'm also going to continue to buy full priced software for PS5 and Switch as time goes on. I like doing it, because I like supporting creators.

MS got my dollar for the 3 years of XBL gold -> GPU conversion back in January. I don't have to give them another cent for any first party offerings until 2025. By that time I will have easily spent over 1000 dollars between PS5 and Switch software.

Which business would you rather be in? Do you think Sony would "lose money" by including all their games on PS+ then, which I pay for anyway?

50m users paying for $180 can generate those money easily.

You have to account, the other users who won't buy those games.

God of war took 4 years to sell those 20m copies. Hzd had to get PC sales to be accounted for 20m sales.

Sony undercuts their prices after 1 year of release.

Not every game from the 1st party will hit those sales.

What you are basically arguing is the short term profit.

The $180 represents long term profit, which will keep growing.

 

[EverydayBeast]

How do you not lose money? It’s why some people are against it

 

[Stare-Bear]

Their market leaders, why would they?

 

[anothertech]

Billions. Enough said.

 

[Yoboman]

50m users paying for $180 can generate those money easily.

You have to account, the other users who won't buy those games.

God of war took 4 years to sell those 20m copies. Hzd had to get PC sales to be accounted for 20m sales.

Sony undercuts their prices after 1 year of release.

Not every game from the 1st party will hit those sales.

What you are basically arguing is the short term profit.

The $180 represents long term profit, which will keep growing.

$180 * 50 million

Then deduct development costs
Deduct marketing costs
Deduct licensing fees for any third parties and remove royalties from the current bottom line

What are you left with?

 

[bitbydeath]

We're looking at roughly a billion dollars generated from first party game sales. If say half of that was gone due to day one, it's 500 million dollars "lost" in a year. Chump change tbh.

Can you send me some of that chump change?

 

[Bernd Lauert]

Well Ive spent about 200 dollars on PS5 software in the last 3 months. I'm thinking of buying GT7 for another 70 dollars. I also am fully subbed on PS+.

Do you think Sony would rather just give me 270 dollars worth of software (and more) for the money I already paid for PS+ or would they rather me have paid that 270 dollars for four games? I'm also going to continue to buy full priced software for PS5 and Switch as time goes on. I like doing it, because I like supporting creators.

MS got my dollar for the 3 years of XBL gold -> GPU conversion back in January. I don't have to give them another cent for any first party offerings until 2025. By that time I will have easily spent over 1000 dollars between PS5 and Switch software.

Which business would you rather be in? Do you think Sony would "lose money" by including all their games on PS+ then, which I pay for anyway?

And yet first party sales are less than 5% of total Playstation revenue. It's almost like most users don't spend 70 dollars on every single first party game that comes out.

 

[Jaybe]

Yeah, the green and orange slices.

 

[kingfey]

$180 * 50 million

Then deduct development costs
Deduct marketing costs
Deduct licensing fees for any third parties and remove royalties from the current bottom line

What are you left with?

6b-3b=$3b.

6 day 1 games, would get $500m. Or 7m copy sold at $70 price.

Do you need any more money?

 

[squarealex]

A game with 250 millions budget share free for PS+ owners, wich one month cost 9,99$

Supposing 10 millions players play the game + sharing money with other game/service etc....

Yeah, no... Sony of course losing money...

10 millions of 60/70$ is more sense... and no sharing money for other game/service....

There is no doubt Microsoft losing money doing this... eh....

 

[Pallas]

No, Sony’s dedicated hardcore inner fan base will dou—trip—no quadruple dip their first party games to make up for any loss of revenue, plus buy 3 years worth of the highest subscription tier.


Seriously though, that model probably wouldn’t benefit Sony to release their major first party IP’s day one on their subscription service.

 

[kingfey]

Can you send me some of that chump change?

Me too.

 

[mejin]

Why the obsession for Sony to go down on Xbox route? You guys know Sony can't bank red for their most profitable segments.

 

[Dr Bass]

And yet first party sales are less than 5% of total Playstation revenue. It's almost like most users don't spend 70 dollars on every single first party game that comes out.

And yet, giving them away for "free" is still giving them away. You have no point. Why do you defend MS like they are your religions entity?

I'll ask again. I'm already paying for PS+. Do you think Sony would rather give me those games for free or let me (and tens of millions of other people) continue to pay for them? You completely side stepped the point with nonsense.

You're just wrong on this. You don't make more money by charging less for products.

 

[Yoboman]

6b-3b=$3b.

6 day 1 games, would get $500m. Or 7m copy sold at $70 price.

Do you need any more money?

Where did you get 3 billion from? And you realise that's less than the software revenue in the first post?

There's no way to calculate what the cost of licensing is.

Again, if it was so profitable Sony would just do it.

Not sure why its hard to accept MS is running a loss leader strategy

 

[Honey Bunny]

You only do that if youre desperate. So if they lose enough marketshare, yes.

 

[ZywyPL]

Let's say a game sells 15M copies for full 70$, that's 1.05B revenue, whereas Sony usually has two titles a year that reach those kind of sales, so that makes 2.1B total. PS+ on the other hand has about 50M users, which even at 15$ would bring Sony 0,75B each year. So yeah, totally not worth it, I mean, Ryan and his acountants obviously did their math.

 

[Bernd Lauert]

And yet, giving them away for "free" is still giving them away. You have no point. Why do you defend MS like they are your religions entity?

I'll ask again. I'm already paying for PS+. Do you think Sony would rather give me those games for free or let me (and tens of millions of other people) continue to pay for them? You completely side stepped the point with nonsense.

You're just wrong on this. You don't make more money by charging less for products.

You're not the market. You're actually almost the opposite of the market, judging by the numbers.

 

[AmuroChan]

How would anyone here be able to say definitely one way or another? It's important to realize that different companies operate differently. A business model that's a great fit for one company may not be as good of a fit for another company. I'm sure Sony has plenty of financial people crunching numbers everyday trying to figure out how to maximize their revenue growth.

 

[rickybooby87]

If they didn’t lose money they would do it.

Why wouldn’t sony want to make more money?

Agreed. If it made true financial sense for PlayStation, it would of already happened. Microsoft is hedging GamePass on a loss leader strategy. If it was all making bank, people would know. You just gotta keep it up long enough until it’s self funding on its own. I’m sure they see a finish line somewhere in the horizon, not sure where.

 

[Dick Jones]

Xbox fanboys want their competitor to follow their gameplay.

Think about that.

 

[Bernd Lauert]

Let's say a game sells 15M copies for full 70$, that's 1.05B revenue, whereas Sony usually has two titles a year that reach those kind of sales, so that makes 2.1B total. PS+ on the other hand has about 50M users, which even at 15$ would bring Sony 0,75B each year. So yeah, totally not worth it, I mean, Ryan and his acountants obviously did their math.

Your math is wrong. 50m PS+ users at 15 bucks a month is 9B a year.