Of course. But imagine a subscription program for 20$/month. If they had 10M subscribers, it would be 2.4 billion by year. It's enough to fund a lot of first party games.
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Will Sony ever put its first party games on a service like PS Now at launch?
- Thread starter Toriko
- Start date
Probably not. Sony first party games will always move huge amounts of Day 1 units at $60 and it would be a mistake to relegate them to adding value to a subscription service.
This is a really shortsighted view of how this all works.
80 million PS4s, if they can get 10 million subscribers at $10 a month, do the math. It's way more money in one year than they make from all their first party games combined.
User Banned (5 Days): Platform warring. History of similar behaviour.
Jesus, Sony fanboys are weird.
They already are. Crossplay, name change, PSNow downloads and streaming, PS+ great games, BC is confirmed at this point, and are increasing the first party studios/opening a new one.
Competition is wonderful because of this.
You sure about that? Spider-Man, God of War, SOTC, Detroit, plus all revenue from their previously released games. And a lot of the money from the subs would be going to third party publishers with their games on the service.
Crossplay for one game, name changes are not confirmed, BC is not confirmed, PS Now library is weak. I think you are getting ahead of yourself here
Edit: dp whoops
You're assuming that many people will subscribe. And as far as we know, the game pass numbers aren't anywhere near that. And you're also assuming Sony will sell PS Now for that low. I don't think they can do this while the quality is as high as it is. Do we really think MS would have tried this had Halo Infinte and Gears 5 been up for release rather than Sea of Thieves and State of Decay 2? It seems like they did this because they knew the polish/content was low in their early 2018 games.
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People like to trot that out, but Microsoft sets their own internal expectations, and no one outside the company knows what they are, so such a self serving comment doesn't prove anything, especially not that the service increases sales.
I think a lot of people don't realise how a subscription service coupled with sell-through alters the financing of game development.
Currently the financial model of game development is like property:
Decide on a budget
Spec the project
Rejig the budget lol
Begin development (e.g. buy land, start core concept outline)
Continue development
At this point all your costs are upfront with no guarantee of a return OR cashflow to keep the project going
At some point you start taking off-plan deposits or, in the case of games, pre-orders. This allows you to gain further funding on the basis you've already locked in x% of your costs as covered in sales.
Ongoing pre-orders can be counted as cashflow to your finance team and presented to shareholders as confidence in the title, allowing people to be paid while continuing to work, project to continue.
Your risk is mitigated, but still there as even with pre-orders if the game is a stinker al your P&L models fall apart, especially when you include post-release monetisation (PRM)
Subscriptions change this by providing ongoing cashflow that is reasonably guaranteed (I'll come on to why this is in a sec), and reduces the reliance on lean times during development followed by a massive influx of cash over a short period of time, which then tails off into PRM which may or may not help you reach the project's profitability target.
Instead you have a constant revenue stream buttressed by sell through purchases and PRM, and while you will still look at P&L per title, so the downside risk of a game underperforming at both retail and PRM is mitigated.
Now - guaranteed cashflow. I see people in this thread talking about how they used the GP trial to get FH4, and how can that work...well, your behaviour isn't typical of people who use subscription services. For most households Netflix is essentially a utility bill rather than a discretionary purchase. Keep your churn rate low by wedging your service like that and you have an income stream that has consumer inertia that mitigates churn risk.
Tl:dr - sub services mitigate the financial risks of gane development by proving steady cashflow and offer the opportunity to convert into permanent sales and PRM.
By positioning the service correctly, you can induce consumer inertia when it comes to cancelling subscriptions, reducing churn.
Currently the financial model of game development is like property:
Decide on a budget
Spec the project
Rejig the budget lol
Begin development (e.g. buy land, start core concept outline)
Continue development
At this point all your costs are upfront with no guarantee of a return OR cashflow to keep the project going
At some point you start taking off-plan deposits or, in the case of games, pre-orders. This allows you to gain further funding on the basis you've already locked in x% of your costs as covered in sales.
Ongoing pre-orders can be counted as cashflow to your finance team and presented to shareholders as confidence in the title, allowing people to be paid while continuing to work, project to continue.
Your risk is mitigated, but still there as even with pre-orders if the game is a stinker al your P&L models fall apart, especially when you include post-release monetisation (PRM)
Subscriptions change this by providing ongoing cashflow that is reasonably guaranteed (I'll come on to why this is in a sec), and reduces the reliance on lean times during development followed by a massive influx of cash over a short period of time, which then tails off into PRM which may or may not help you reach the project's profitability target.
Instead you have a constant revenue stream buttressed by sell through purchases and PRM, and while you will still look at P&L per title, so the downside risk of a game underperforming at both retail and PRM is mitigated.
Now - guaranteed cashflow. I see people in this thread talking about how they used the GP trial to get FH4, and how can that work...well, your behaviour isn't typical of people who use subscription services. For most households Netflix is essentially a utility bill rather than a discretionary purchase. Keep your churn rate low by wedging your service like that and you have an income stream that has consumer inertia that mitigates churn risk.
Tl:dr - sub services mitigate the financial risks of gane development by proving steady cashflow and offer the opportunity to convert into permanent sales and PRM.
By positioning the service correctly, you can induce consumer inertia when it comes to cancelling subscriptions, reducing churn.
The games that Sony make just aren't really good for services like gamepass imo. I get the thought that monthly subscriptions for a year adds up but the third party games would have to be really good to get people to stay subscribed.
God of war and Spider-Man are 2 of my favorite games this year and I would've subbed for one month each if those games were on a service like gamepass. So Sony would've got potentially $20-$40 from me instead of $120.
God of war and Spider-Man are 2 of my favorite games this year and I would've subbed for one month each if those games were on a service like gamepass. So Sony would've got potentially $20-$40 from me instead of $120.
Exactly, it's not a move you make when things are going well, add to that Sony's games for the most part don't fit well with a subscription model I wouldn't hold my breath waiting for them to do this.
1) I said if
2) Who said GamePass is at 10 million? They're nowhere near that
3) The price has nothing to do with the games on the service. That price is based on research into what sort of price would work both short and long term. It's a pretty standard price for just about every monthly entertainment subscription out there. I mean, Gears 4 and Halo 5 are on there and all new stuff is launching on it so I'm not sure where your logic stands. Forza Horizon is. 90 plus Metacritic franchise. By your logic GamePass should now go up in price because FH4 just launched on it?
It certainly points to the games not being devalued.
FH4 is tracking better than the previous entries. What a coincidence.
They already have 30+ million subscribers at $60 a year and they have to do absolutely nothing to get them other than say "nah you ain't playing online without paying". Literally free money.
If they put all first party games there, is gaining a little bit of extra money worth the cost? Online paywall is super profitable because it costs the console manufacturer nothing.
I said that they are preparing for the next gen, I hope PS Now library gets better by then.
Name change was confirmed: https://kotaku.com/game-developers-say-theyre-preparing-for-psn-name-chang-1829521254
And BC was hinted by insiders, and there is patents, but I think it's obvious that they need it for GAAS, and PSVR, and to compete with Xbox.
Actually, I do think they could sell game pass for more to access FH4 and Halo Infinite and Gears 5.
This would be double the money though. They'd still be doing "nothing" given they're already making the games.
Maybe one day.
But I don't see it happening anytime soon. They'll do it when the market has transitioned in a big way to sub services but they probably aren't interested at being trend setters there
But I don't see it happening anytime soon. They'll do it when the market has transitioned in a big way to sub services but they probably aren't interested at being trend setters there
Is it? They have 2 potential 10 million sellers this year alone + some smaller games and their back catalogue on top of it.
And they don't really put out the kind of content you need to keep people subscribed constantly.
PSNow is too high risk. The name is somewhat tainted because of the last 5 years of being a streaming service only, it could take a while for them to take a plunge like that. Plus with their first party games being big sellers they probably see no reason to do it yet.
so anonymous sources and insiders...
the very definition of not confirmed.
tbf I believe it, but Confirmed = Sony announcing it, not insiders/anons
Yeah, my mistake. So let's say there's a chance :P
I hope they do because my PSN is horrendous
Good thing there are no other variables at play, like there being 10m more Xbox One owners since the last entry, the general lack of other high quality first party games this year and new Xbox One X owners wanting a showpiece for their expensive 4K console.
Unless psnow only consist of Sony games. Most of the money from that service will go toward paying for third party games to be in psnow. I'm not sure the rest of the money after all that is bigger than the revenue gained from Sony first party games, which right now is selling millions of copies per title. GoW, Spider-Man, and TLoU, these 3 titles is very likely to reach 10million copies sold.
But how much less will they sell if the games are also on a service? So far we have not seen a drop for Microsoft. It is reasonable to believe a drop might happen eventually but it is very unlikely to butcher retail sales. (I think it is impossible to do more effective marketing than having people on your friends list playing a specific game.)
If Microsoft's first party output goes from barely ok to pretty good than Sony's hand is gonna get forced in this. Game Pass value is through the roof. There is only so long a competitor can provide that kind of value without response. MS is really shaking this whole model up right now and I love it.
They've been putting out different kinds of games. If people could pay $10 to play Detroit or Spiderman and beat them within a month and end their sub, that would probably hurt sales more. MS has been focusing more on service type games with longer tails.
Even with your simplistic calculations. Do you think all Game pass money goes to MS? I mean there are lots of publishers with games on it to share the cake.
But as we are seeing, a model like Game Pass necessitates a flow of content to bring in new subscribers so ms is investing in games like they probably never have. It's not like once MS gets a more First Party releases that they will pull the plug on GP. No, it's a snowball of games. There will be a time in the not so distant future where being a gamer and not having game pass will be stupid just because of the volume of titles available. Sony shouldn't sleep on this.
I bet lots of TV and movie companies thought the same about Netflix 7 years ago.
Only if Sony completely fucks up something next gen and Xbox TWO is leading platform in sales (which is highly unlikely to happen). Game Pass won't exist now if MS were in current position of Sony...
They have a finite amount of devs that can make a finite amount of single player AAA games in a given time. "Just make more games" isn't a reality when a standard dev time of a game is around 3 years/more probably next gen.
Sony would probably lose a lot of money since they release a ton of exclusive in house content and also high budget stuff
Doesn't make sense for a model rich in first party games which achieve great sales on their own
Doesn't make sense for a model rich in first party games which achieve great sales on their own
Companies earn money with high margin products or with the largest possible pool of customers. Sony have both with the Playstation, so no reason (for now) to devaluate the entry price of their fresh product to supposedly enlarge the pool.
As a software company Microsoft must make something like 75-85% of margin (I dunno exactly) but the XB division is stucked by the hardware cost, retail distribution etc. Even at 500$ the One X wasn't profitable (at release). So they are trying to fit the Xbox into a closer model to the one that governs the rest of the company profitability.
And outside the MS first-party catalog, Gamepass content looks like a used basket of games in a CashConverter or Gamestop retail store. The same with Play Anywhere : only a few indie third-party publishers have accepted to put their titles on it. If you haven't built a specific financial model for it, it's far more interesting for distributors and customers than it is for publishers.
Netflix has reached 130 millions subscribers this year and in the meantime accumulated something like 20 billions dollars of debts. Where do you place both cursor in the case of game streaming, the cursor of potential market size and investiment needed to feed it ?
Netflix like Amazon has barely the profitability of a midwestern grocery shop but an insane web of customers and daily purchases, so why bankers and investors make them Googoo eyes because all this monthly fresh cash flow.
As a software company Microsoft must make something like 75-85% of margin (I dunno exactly) but the XB division is stucked by the hardware cost, retail distribution etc. Even at 500$ the One X wasn't profitable (at release). So they are trying to fit the Xbox into a closer model to the one that governs the rest of the company profitability.
And outside the MS first-party catalog, Gamepass content looks like a used basket of games in a CashConverter or Gamestop retail store. The same with Play Anywhere : only a few indie third-party publishers have accepted to put their titles on it. If you haven't built a specific financial model for it, it's far more interesting for distributors and customers than it is for publishers.
Netflix has reached 130 millions subscribers this year and in the meantime accumulated something like 20 billions dollars of debts. Where do you place both cursor in the case of game streaming, the cursor of potential market size and investiment needed to feed it ?
Netflix like Amazon has barely the profitability of a midwestern grocery shop but an insane web of customers and daily purchases, so why bankers and investors make them Googoo eyes because all this monthly fresh cash flow.
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And yet, despite the option to spend $10 rather than $60, it's tracking extremely well.
Again, at the very least we aren't seeing day one Gamepass releases hurt sales. In fact, Phil has said Gamepass users buy more games.
Man, the PS4 offerings on PS Now fucking suck. It's even more problematic since you can only download PS2 and PS4 titles.
