So here's the thing with that: It's all an accounting question. If they do something where they capitalize the cost of providing the free months of gamepass under the $1 conversion scheme, and then treat every user as if they paid the full $15 each month, I'm sure it's profitable. But on a dollars in, dollars out basis, I'm sure it's losing money.
However that's absolutely normal in the technology services industry. Tesla has lost billions and billions of dollars but people are lining up to buy their stock because they a confident in where things project to move for their business.
Gamepass right now has 15m subscribers offering mainly day 1 indies and 2+ year old third party games. Two years down the road when they have a handful of AAA and AAA-ish day 1 games hitting the service every year, both from the 2018 studio acquisitions and the Bethesda acquisition, how much higher will that subscriber count be? Double?
That's $5.4B in revenue per year. And what did you spend on the 5-6 first-party games you put out? Even averaging $100m each (which is very very high) that's $500m in production costs. That's a really, really good revenue stream. Then if they can crack the code on streaming to mobile...
And the entire thing is built upon this simple fact: It costs virtually the same amount of money to develop a game that's sold to 100 people as it is to develop the same game and sell it to 100,000,000 people. So you spend big for the tentpole releases that get people in the door on your service, then you invest in a drip-feed of content that keeps them subscribed between tentpoles, and you reap the rewards of the extreme economies of scale for digital products.
I think it's only a matter of when, not if, Sony joins the party.
