With the latest MLB on GP day 1 move, I think Xbox has forced Sony's hand. We will see some
response from Sony in the near future. The most likely option would be that Sony uses the PS+ subscription to expand the PS+ Collection and use it as a competitor for Xbox GamePass.
However, a Sony Gamepass just wouldn't work (imo) if PlayStation Studios games do not release on that subscription service day one.
Everyone's favorite Jim Ryan has said that it does not make financial sense to put these AAA blockbuster games on a subscription service because those games cost over $100M to develop. Honestly, this makes sense because Sony's games really are the epitome of AAA.
But let's explore if it's really the case. More importantly, let's share our ideas of what a Sony GamePass could look like and how it would make financial sense (based on the limited information we have).
Possible Idea for a Sony GamePass
My idea is that Sony should just the PS+ subscription and divide it into 2 tiers:
Will it make financial sense for Sony?
- Tier 1 ($30/$40 per year): Online multiplayer + Cloud storage
- Tier 2 ($100/$120 per year): Online multiplayer + Cloud Storage + PS Now Downloadable section + PS Plus Collection + New monthly games + Day 1 releases of first-party games
PS+ current subscriber base is roughly 50 million active users. I think that's the biggest advantage Sony can leverage. How will it work?
- Let's assume that by increasing the price, Sony loses roughly half the subscribers and ends up with 25 million active Tier 2 users. At $100 per year, that'd net Sony $2.5 billion every year. That's a lot of dough.
- Assuming Sony releases 5 AAA games per year, each costing $150M, on the subscription, that would cost them $750 million per year. That still leaves them with $1.750 billion that Sony could use to get third-party deals.
- Assuming AA and AAA third-party games, on average, costs $10M (seems high!) to put on a Gamepass-type subscription, Sony could add 10 third-party games every month (!) at an annual cost of $1.2 billion.
- That still leaves Sony with roughly $500million as annual profit.
Sony would likely earn more than $500 million because of:
- Income from Tier 1 subscribers.
- Retail sales of first-party games from non-subscribers
- MTX and in-game purchases in first-party and third-party games from subscribers and non-subscribers.
- Sony already gives away 3-4 games every month to PS+ subscribers. I didn't include that cost in the above calculation. So that money will be saved or deducted from the aforementioned $1.2 billion.
- Sony also gives away 3-6 games every month on PS Now. By merging these two subscriptions, Sony would not have to bear that additional cost, thus will save money there as well.
- If Sony makes everything downloadable on consoles, they could do away with streaming servers (which would also save them money)
- By making the subscription dependant on console downloads, Sony will also be able to bring people to their ecosystem.
- They can release first-party games on day one, and then later release some games on PC at $60 or $70 retail after a year or two for additional income. But the value of their subscription will be more pronounced on a PlayStation console.
- Most importantly, as subscribers grow above 25 million, Sony will also start increasing their profits almost linearly.
: There is a lot of assumptions simply because we don't have the actual data. But I kept the cost as high as possible.
: Personally, I am not a big fan of subscription services, and I'm not entirely sold if these are 100% sustainable in the long run. So a Sony Gamepass isn't necessarily my wish.
But this has become such an interesting case study scenario b/w two very good companies and their contrasting business strategies that we likely won't see in the gaming industry ever again. So I wanted to share my ideas and seek others'.
What do y'all think? If you were to design a Sony Gamepass, what would you do?