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Sony Gamepass: Does it really not make sense financially? Let's see

Feb 19, 2010
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My two cents:

Price: Same as GamePass
Sony AAA Titles: Join the service 6 months after release
Day one AA 3rd party titles + Day one Sony non-AAA titles

PS. For some reason PS Now is not available in my country (most probably Sony don't think they cant guarantee a decent quality over streaming, which to be honest I don't care for)
 
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SoraNoKuni

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Exclusives should remain on their current price, it makes no sense to make bleeding edge next gen games and give them to gamers for $5 per month.

Microsoft will provide subpar experiences and gaas to sustain gp in the long term, only solution I can see so we as gamers don't lose quality and just get quantity is for sony to provide older multiplatform games as a gp countermeasure, if they adopt microsoft's strategy we as gamers will lose a lot of valuable games as both of the companies will try to make cheaper and more games instead of bigger releases.

I can't see how people can't see that, if a game costs 100-200 million to make and take up to 3-4 years to develop it's a ridiculous move to give them for 5$.
Microsoft won't develop such quality games as sony and that's a given.

Bottom line, Gamepass as it is now is a godsent service with extreme value, but in the long term it won't, right now Phil wants to attract everyone on it and probably they are losing money to gain market share.

I may sound as a doombringer but I really hope the future of gaming is not Gaas microtransactions and episodic releases of games(look @ The initiative).
 

yurinka

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It's unlikely that GP supplants game sales as the primary business model, but Sony needs to be ready.
It will supplant game sales for MS because they almost don't have game sales, this is why MS went all in with GP. Sony instead sold 1.5 (and counting) PS4 games, it doesn't make any sense for Sony.

In any case, Sony has way more revenue and subscribers in game subscriptions services. And same goes with the overall gaming division, Sony generates more revenue, sells way more consoles and has way more active users than MS.

It's MS who has to learn from Sony and react, not the opposite.
 
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mcjmetroid

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you know how will be the games from playground ,inxile,obsidian ,all bethesda,the initiative,ninja theory? .no? ah..ahh i understand you are just putting out air from your arse )). i see
I mean right now....You're talking 2 years from now at least.

Is there any debate right now on who has the better games.. right now?
Things were very subjective in the 360/ps3 era but not so much after that.

Now it's been a slow start to both consoles if we're just talking PS5 and Series X
and
It might be a different playing field in 2 years but as of right now. .. yeah

I'm not trying to shit on peoples fanboy dreams but it's absolutely no secret that Microsoft couldnt compete with Sony in a traditional console fight. They changed the game. I think it was the best move for them.
What do you do when you can't compete? You change the game. Ask Nintendo all about that one as well.
 

MonarchJT

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I mean right now....You're talking 2 years from now at least.

Is there any debate right now on who has the better games.. right now?
Things were very subjective in the 360/ps3 era but not so much after that.

Now it's been a slow start to both consoles if we're just talking PS5 and Series X
and
It might be a different playing field in 2 years but as of right now. .. yeah

I'm not trying to shit on peoples fanboy dreams but it's absolutely no secret that Microsoft couldnt compete with Sony in a traditional console fight. They changed the game. I think it was the best move for them.
What do you do when you can't compete? You change the game. Ask Nintendo all about that one as well.
I don't know this notion of "couldn't compete" the Xbox has completely drop the ball during the final part of the 360 and early Xbox One. That said, the 360 generation has certainly seen it as victorious over the ps3, which apart from the number of consoles sold at a loss (which seems to make only fanboys happy but not sony) I don't think there has been no competition between ms and sony. I absolutely agree with you that the og Xbox One as hardware was an abomination (only fixed by the relaunch of the s and then of the x)and at the software level they were mostly painful. But honestly if you expect this gen on games level to be like the last one, well I have my strong, very strong, huge doubts. All new studios and all bethesda studios are there just for a reason...and the reason is just what we're talking about.
 
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mcjmetroid

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I don't know this notion of "couldn't compete" the Xbox has completely drop the ball during the final part of the 360 and early Xbox One. That said, the 360 generation has certainly seen it as victorious over the ps3, which apart from the number of consoles sold at a loss (which seems to make only fanboys happy but not sony) I don't think there has been no competition between ms and sony. I absolutely agree with you that the og Xbox One as hardware was an abomination (only fixed by the relaunch of the s and then of the x)and at the software level they were mostly painful. But honestly if you expect this gen on games level to be like the last one, well I have my strong, very strong, huge doubts. All new studios and all bethesda studios are there just for a reason...and the reason is just what we're talking about.
I absolutely expect Microsoft to put on a better show this gen 100%. Only because it couldn't be much worse than last gen .

Seriosuly though I do think it will be a far more even field. I' was saying that from the beginning. I want everyone to do well because if all 3 companies are healthy then that drives better games and nobody gets lazy.

But I also think without Gamepass and perhaps a cheaper mainline console that they have, no game could pull them out of the mess they made for themselves last generation.

Perhaps if in a world where Gamepass didn't exist and Microsoft launched Halo Infintate last year with their console launch and it was AMAZING... then that might have worked.
But no the MS first party support has been weak so far and to be fair Sony's hasn't been great either but it's certainly better so far.

Again in 2 years things could change but as of right now. Ms needed Gamepass.
 

Balducci30

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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:
  • 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
Will it make financial sense for Sony?

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.
Note 1: There is a lot of assumptions simply because we don't have the actual data. But I kept the cost as high as possible.

Note 2: 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?
I would get it no question. I hope they do it
 
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aclar00

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I think we'll see something equivalent from Sony fairly soon. It will likely be an updated PS Now. I think the rumors (hiphopgamer) regarding a revamp PS Now with BC going back to PS1 is likely, especially with the recent PS3 and Vita store closures. Only time will tell though.

Im not a fan of gamepass or PS Now though and dont want to add any more subscription services. I probably by 5 games max a year, one of which may be at full day one price and i can often go 3 to 6 months without really touching a game. So i dont think a service would be right for me.

The initial low prices are also to entice you to jump in early, then you get the small payment increases, then less quality content, then third parties want their own service and then shovelware becomes the norm... all with the hope that you continue to pay while waiting for the one annual release that would hopefully make it worthwhile.
 

Dabaus

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It’s not that I believe gamespass is the predestined future of gaming, it’s that MS gets chip damage in on Sony and headlines whenever a new game comes to their service. MS looks big and dominant at the moment because of Sony’s silence surrounding well, everything. I don’t understand why Sony is dragging their feet on backwards compatibility through emulation when random people online can run enhanced versions of ps1/2 games. Or at the very least COMMUNICATE what you plan to do.

Sony seems asleep at the wheel meanwhile Microsoft will make a mountain out of a 4 year old ports of something for a rental service. Sony let that happen, they let MS take the spot light because they refused to communicate their vision of the future.
 
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SafeOrAlone

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Some of the most painful posts to read here lately are from people pretending they have the knowledge to claim "GamePass isn't sustainable" or "you get what you pay for, so enjoy your subpar ganes". These are people who likely have no clue what they are talking about. Fact is, Netflix, Disney Plus, and HBO Max have already destroyed that reasoning.

You can pay a monthly fee, cheaper than a game at retail, and still get the full experience. The business model is designed for that. It is why you are also, in a sense, paying for games on Gamepass that you will never ever play. Once you get enough subscribers paying a monthly fee, it all works out.
 
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Warnen

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6 months in and everything is Gamepass...

Who would have thought the tide would change so quickly.
 

Goncas2

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Sony right now makes $3 billion ($60 * 50 million) from PS+.

If Sony does what you're saying, they would lose $500 million ($3B - $2.5B) AND lose most of the revenue from sales of first-party games AND have to pay for third-party games to come to their service.

It doesn't make any financial sense.
 

Zog

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They already have their gamepass service. it's called PS Now. You don't need to stream the games as you can download any PS4 (and PS2 classics and soon PS5) games on your PS4 / PS5. Also with PS Now you don't have to pay to play online.

They just have to add more games on it and that's it.
It's true but people don't seem to see it as a real competitor to Gamepass and sooner or later Sony is going to need to answer to that. Sony could do so much more too, they could add PS1, PSP and some Vita games as well as making a PS3 emulator so those games could be downloaded as well.
 

jts

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Fist, Sony does not need to go Gamepass.

Second, Sony fans does not care about it.

Third, the kind of games they make is made to be sold, not on Gamepass.

Fourth, it makes no sense for them to go Gamepass.

Fith, they sold more than 100 millions PS4. Nintendo should go full Gamepass on MacStore before. Nintendo sells less, their hardwares are shit, it makes better sense.
Nintendo has been selling more for a good while now. Your post makes no sense.

You must be soft in the head.
 
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MonarchJT

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Fist, Sony does not need to go Gamepass.

Second, Sony fans does not care about it.

Third, the kind of games they make is made to be sold, not on Gamepass.

Fourth, it makes no sense for them to go Gamepass.

Fith, they sold more than 100 millions PS4. Nintendo should go full Gamepass on MacStore before. Nintendo sells less, their hardwares are shit, it makes better sense.
you have the same intuition as good dear Don Mattrick you should send a resume to jenga
 

12Dannu123

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Here's the thing though: What came first, the chicken or the egg? Or in this case the "ridiculously expensive" infrastructure, or the service that uses it?

See, MS have poured a fortune into Azure because they hoped to make money from it. Now if its being used to prop up Xbox, which means they most likely had bandwidth/capacity going spare because realistically they'd prefer a third-party to be paying for its use. Basically they are their own client for this so aren't actually making any money from it!

Bottom line: Not having to resort to an external partner for hosting may be a cost saver for Xcloud, but its still costing MS money.

Of course it's costing Microsoft money, but they don't suffer from the risk of operating cost skyrocketing at scale like Sony could suffer. Microsoft has better uses of its Azure servers, so the cost is mitigated. It's been rumoured that Xbox server blades can be used for general purpose servers.
 
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Flintty

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Everytime i see the word tier on this shit (americans love to be rípped off)





I know that for some of you its hard to realise Microsoft is doing gamepass because they have big pockets and were losing big time, they are burning money like there is no tomorrow, Sony and Nintendo dont need or have to follow any of this
If you’re looking at it from a stakeholder point of view, then you’re right. But if you look at it as a consumer, then a gamepass clone would be fantastic for Playstation. But GAF seem to only care about the stakeholders though, judging by most posts here on the subject. Go you!
 

Hugare

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If you’re looking at it from a stakeholder point of view, then you’re right. But if you look at it as a consumer, then a gamepass clone would be fantastic for Playstation. But GAF seem to only care about the stakeholders though, judging by most posts here on the subject. Go you!
Why stop there?

Why not demand free games from Sony?

We seem "to think like shareholders" because we are using our fucking brains to have some reason here.

If it doesnt make sense financially, its stupid to expect that the company will do it

Seems like some of you guys have been living in Soviet Russia until now or something. What you guys are proposing makes no sense financially.

Imagine this: you are selling lemonades for $10. Your neighbor starts selling lemonades for $5 because he is being left behind. But the cost to make those lemonades is $8, so he is loosing $3 for each lemonade that he sells.

But you dont care, because you are still selling huge amounts of lemonades for $10, profiting $2 for each.

Now, some people on Neogaf says that you are stupid and should be selling lemonades for $5 because your neighbor is doing so and that's so "pro customer" of him.

What you do? Think for a bit
 
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Sony will never reach PC gamers with PS Now, you're forced to use a controller, no native games. PC gamers prefer higher fidelity and frame rate.

Xbox Game Pass just works, for one is Xbox Game Pass for PC and Xbox Game Pass for consoles are 2 seperate subscriptions. Purchase the Ultimate version to combined them into one that includes others perks as well.

Cloud saves are completely free. They should never hide this behind a paywall.

as a PC only gamer , i use PSNow whenever i want to play a playstation exclusive game, Xbox Game Pass whenever i want to play an xbox exclusive, and RetroArch whenever i want to play anything else not on windows

as far as your point about controllers, pretty much any game that is a console exclusive is going to be better with a controller than a keyboard and mouse anyway so i dont understand where you are coming from with that
 
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Why stop there?

Why not demand free games from Sony?

We seem "to think like shareholders" because we are using our fucking brains to have some reason here.

If it doesnt make sense financially, its stupid to expect that the company will do it

Seems like some of you guys have been living in Soviet Russia until now or something. What you guys are proposing makes no sense financially.

Imagine this: you are selling lemonades for $10. Your neighbor starts selling lemonades for $5 because he is being left behind. But the cost to make those lemonades is $8, so he is loosing $3 for each lemonade that he sells.

But you dont care, because you are still selling huge amounts of lemonades for $10, profiting $2 for each.

Now, some people on Neogaf says that you are stupid and should be selling lemonades for $5 because your neighbor is doing so and that's so "pro customer" of him.

What you do? Think for a bit
If that's the case, why did Sony give away 15 games for PS5 gamers? The systems are already selling out. No need for freebies. Also, they gave away another 9 games recently for everyone.

PS3 lost a shit load of money for most years, yet Sony still kept selling it. That era lost back most of the profits the PS division made during PS1/PS2. So why did they keep selling all generation despite being a cash killer?
 

Silent Viper

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Successful subscription needs heavy investment and only then it will bear fruits in long run.

Sony can't invest huge cash into subscription and on top of it fund AAA games.


Sony will continue their traditional path as long as they selling consoles
 
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Heisenberg007

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Successful subscription needs heavy investment and only then it will bear fruits in long run.

Sony can't invest huge cash into subscription and on top of it fund AAA games.


Sony will continue their traditional path as long as they selling consoles
If Sony leverages a current subscription (e.g., PS+), they can bypass the tough period that is needed to build a subscription from scratch. This will definitely dent their current operating profit quite significantly, but they can make it work if they think there are more profits to be had in the future with this strategy.

It isn't a question of Sony can't do it. I think it's just if Sony thinks they should do it or not.
 

12Dannu123

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If Sony leverages a current subscription (e.g., PS+), they can bypass the tough period that is needed to build a subscription from scratch. This will definitely dent their current operating profit quite significantly, but they can make it work if they think there are more profits to be had in the future with this strategy.

It isn't a question of Sony can't do it. I think it's just if Sony thinks they should do it or not.
They can leverage their current subscription, but the price cannot be the same. They either need to start from scratch or double the price of PS+, which will hamper growth of the subscription service. Creating a higher tiered service of PS+ is starting from scratch.
 
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Heisenberg007

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They can leverage their current subscription, but the price cannot be the same. They either need to start from scratch or double the price of PS+, which will hamper growth of the subscription service. Creating a higher tiered service of PS+ is starting from scratch.
Sort of, yeah. I think a simpler solution would be to create a premium tier and expect a certain % of subscribers to jump up to that tier. In my calculation/example, I expected Sony to lose 50% of subscribers (or not jump to premium GP tier).
 

turtlepowa

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Sony execs already said more PC games are coming. But aside from Days Gone this spring, they didn't say which other games and when.
Pretty sure we will see last gens Uncharted, Dreams, Bloodborne, God of War, TLOU and more on Pc this gen.
 

Maxwell House

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ps5 is still outselling the series xs. Why would they worry? When that changes then maybe but now make no sense.
Series X | S are sold out everywhere just like PS5 so to say PS5 is outselling Series X | S right now is silly. Both companies are selling them as fast as they can make them. Sony has sold more just because they’ve made more.
 
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Maxwell House

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My two cents:

Price: Same as GamePass
Sony AAA Titles: Join the service 6 months after release
Day one AA 3rd party titles + Day one Sony non-AAA titles

PS. For some reason PS Now is not available in my country (most probably Sony don't think they cant guarantee a decent quality over streaming, which to be honest I don't care for)
PSN is in very few countries because Sony doesnt have the servers / infrastructure in place to offer it in most countries. This is an area Microsoft has a HUGE advantage, having servers all over the world.
 
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ToadMan

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Exactly.

There is no concrete proof of profits yet.

They are still honoring the one dollar 1:1 Gold conversion. Once they cut that off, and possibly raise the price, then we may start to hear about profits.

Unlikely isn’t it?

The thing is accounting can be vague. Right now MS is offering subscriptions via a deal for $1. Great value.

But for accounting they recognise that as $14.99 because that’s the price tag they gave it.

It’s in cash flow we would see this discrepancy.

Anyway, come the day a $1 deadbeat has to pay $14.99 what happens?

At that point, it’s really the case that a few months of subscription buys the games that are on the service so the value argument is reduced. MS will hope existing subscribers have become so used to the service they’ll just keep paying out of apathy.

Even so, MS (or any company trying to make such a service work) will have to produce a lot of content every month to keep people paying.

That’s the problem Netflix has - they “make a profit” but spend more than that profit making new content and amortising the old content just to try and keep $5 subscribers on board.
 
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Unlikely isn’t it?

The thing is accounting can be vague. Right now MS is offering subscriptions via a deal for $1. Great value.

But for accounting they recognise that as $14.99 because that’s the price tag they gave it.

It’s in cash flow we would see this discrepancy.

Anyway, come the day a $1 deadbeat has to pay $14.99 what happens?

At that point, it’s really the case that a few months of subscription buys the games that are on the service so the value argument is reduced. MS will hope existing subscribers have become so used to the service they’ll just keep paying out of apathy.

Even so, MS (or any company trying to make such a service work) will have to produce a lot of content every month to keep people paying.

That’s the problem Netflix has - they “make a profit” but spend more than that profit making new content and amortising the old content just to try and keep $5 subscribers on board.
When it’s $14.99 they’ll still pay.

the current model is existing GP subbers with expired plans can do the top up trick again but instead of $1 they pay one single month for $14.99 and upgrade Gold again.
 

ToadMan

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When it’s $14.99 they’ll still pay.

the current model is existing GP subbers with expired plans can do the top up trick again but instead of $1 they pay one single month for $14.99 and upgrade Gold again.

Well as they say there’s only one way to make a small fortune from gaming - start with a large one. MS seems to be testing this theory for us

If MS do as you say and make it $15.99 to rent to the end of the gen, then either gp will end up empty or MS will end up with zero money in their bank and a tanking share price.

Enjoy the ride all way to the scene of the accident 👍
 

megreotsugua

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Why stop there?

Why not demand free games from Sony?

We seem "to think like shareholders" because we are using our fucking brains to have some reason here.

If it doesnt make sense financially, its stupid to expect that the company will do it

Seems like some of you guys have been living in Soviet Russia until now or something. What you guys are proposing makes no sense financially.

Imagine this: you are selling lemonades for $10. Your neighbor starts selling lemonades for $5 because he is being left behind. But the cost to make those lemonades is $8, so he is loosing $3 for each lemonade that he sells.

But you dont care, because you are still selling huge amounts of lemonades for $10, profiting $2 for each.

Now, some people on Neogaf says that you are stupid and should be selling lemonades for $5 because your neighbor is doing so and that's so "pro customer" of him.

What you do? Think for a bit
Hombre, I like the way you think. You know how things work. What's your opinion of my hypothetical Sony+? https://www.neogaf.com/threads/game...mation-crunchyroll-sony-movies-shows.1583177/
 

megreotsugua

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Well as they say there’s only one way to make a small fortune from gaming - start with a large one. MS seems to be testing this theory for us

If MS do as you say and make it $15.99 to rent to the end of the gen, then either gp will end up empty or MS will end up with zero money in their bank and a tanking share price.

Enjoy the ride all way to the scene of the accident 👍

Gamepass greatest competition are the free-to-play games. And the fact that it cannot create a "FOMO" environment like Netflix and other streaming services because all games that come to gamepass are available for separate purchase. Any gamer can play the games he wants without subscribing.
 
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bender

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Gamepass greatest competition are the free-to-play games. And the fact that it cannot create a "FOMO" environment like Netflix and other streaming services because all games that come to gamepass are available for separate purchase. Any gamer can play the games he wants without subscribing.

I'm actually surprised we haven't seen Gamepass exclusives yet.
 

Sakura

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Will it make financial sense for Sony?

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.
None of this makes any sense.
Sony currently has 50 million PS+ subscribers according to you. That's what, about 50 bucks a year? That means they already would be making about 2.5 billion a year.
When you say 25 million tier 2 at 100 bucks, I'm assuming you also mean that there will be 25 at tier 1. Combined, that would be 3.25 billion dollars
Considering they were already making 2.5 billion off PS+, they are actually only making 750 million more now in your scenario. You have to take into consideration the fact that they already had 50 million PS+ subscribers that have now switched to this new scheme.
Your numbers has Sony spending 1.95 billion on this Sony Gamepass, when they are only making an extra 750 million than they were with PS+. This means, in your scenario, Sony actually loses 1.2 billion dollars (every year!) compared to before they had the Sony gamepass.
 

Calverz

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Apr 27, 2014
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Gamepass was always about having access to hundreds of games cheap. Free online is a worthless counter move. Sony needs to have their AAA exclusives on the service day 1. That’s when I would jump in.
Agreed. And there is zero chance psn+ goes free. Sony too used to that psn money now. No going back.
 

AJUMP23

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Sep 29, 2020
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I don't think it is financially viable for Sony because of what they earn on first party sales.

Uncharted 4 sold 15 million copy, lets say Sony gets an avg of $20 per copy sold. That is 300mil in revenue from that game. I think they like having that punch of first party revenue every time a tentpole game is released. I think their management and their shareholders expect it. They would lose that with a Gamepass style program. I think financially they could make it viable, they would probably want around 5 million subscriptions to justify its existence, but it would take a fundamental shift in Sony culture to sell to their leadership.
 

oSoLucky

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None of this makes any sense.
Sony currently has 50 million PS+ subscribers according to you. That's what, about 50 bucks a year? That means they already would be making about 2.5 billion a year.
When you say 25 million tier 2 at 100 bucks, I'm assuming you also mean that there will be 25 at tier 1. Combined, that would be 3.25 billion dollars
Considering they were already making 2.5 billion off PS+, they are actually only making 750 million more now in your scenario. You have to take into consideration the fact that they already had 50 million PS+ subscribers that have now switched to this new scheme.
Your numbers has Sony spending 1.95 billion on this Sony Gamepass, when they are only making an extra 750 million than they were with PS+. This means, in your scenario, Sony actually loses 1.2 billion dollars (every year!) compared to before they had the Sony gamepass.

No, no. Let's not start doing math here. Jim Ryan is awful and every poster knows how to do the job as an executive better than the actual ones in place.

The math being wrong was the thing that immediately jumped out to me, especially since the OP didn't include the projected profit from the sales. It's pretty fair to say that each year Sony will put out a minimum 5 million seller and closer to 10. They've been keeping it up for years (UC4, Horizon, Spider-Man, Days Gone, GoT, TLOU 2). Even outside of their biggest sellers they have profitable games. This removes all profit from those, at the cost of driving subscriptions for less profit......or more, who knows.

There's that famous quote where Shuhei Yoshida said one in every 10 games funds the rest. With the profit structure changes, does Sony ever take risks on PSVR2? Dreams? China Hero Project (Genshin Impact)?

GP literally came about because MS games don't sell like Nintendo's or even Sony's, not because MS is so forward thinking. They realized that cultivating the talent to create those top tier games is extremely hard, and they needed a disruption since their first party isn't as strong. It's an even bigger loss leading strategy than normal.

What motivation does Sony or Nintendo have to follow the one in 3rd place?
 
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El_Cinefilo

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I don't think it can really work for Sony. Certainly not the way MS are doing it. They don't have the money to burn through to build it up to where Game Pass is now. I don't think they have enough AAA studios to keep enough first party games coming with any regularity like MS are aiming on doing.

Between Turn 10, Playground games, Obsidian, BGS, Machine Games, Arkane, 343, The Coalition, The Initiative, Ninja Theory, Rare, Undead, Id, Tango, the rest and probably even more in future. MS seem to want to get to a point in a few years where they'll have a new AAA first party exclusive game coming pretty much every month to GP subscribers without them needing to pay for too many third party day one games.

Some of those studios mentioned above are big enough to be working on two games at once. I think Sony have maybe 6 or 7 AAA studios? and only one of those seems to work on multiple titles at once and puts games out with regularity (Insomniac). It'd be a colossal financial undertaking to get a Sony Gamepass to where MS are aiming on theirs being.
 
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Pop

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its worse than gamepass in every way : /
Eh, just doesn't have the day 1 exclusives, which Sony shouldn't do.

Besides why would Sony want to lose money. Gamepass has always been great for the consumers, no doubt about that. Can't be good for a company when someone pays a dollar instead of $50 or $60 to play the latest triple A exclusive.
 

Zoro7

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Unlikely isn’t it?

The thing is accounting can be vague. Right now MS is offering subscriptions via a deal for $1. Great value.

But for accounting they recognise that as $14.99 because that’s the price tag they gave it.

It’s in cash flow we would see this discrepancy.

Anyway, come the day a $1 deadbeat has to pay $14.99 what happens?

At that point, it’s really the case that a few months of subscription buys the games that are on the service so the value argument is reduced. MS will hope existing subscribers have become so used to the service they’ll just keep paying out of apathy.

Even so, MS (or any company trying to make such a service work) will have to produce a lot of content every month to keep people paying.

That’s the problem Netflix has - they “make a profit” but spend more than that profit making new content and amortising the old content just to try and keep $5 subscribers on board.
No they don’t recognise $14.99 when the user pays $1. That would be artificially inflating income and that’s illegal. Lol the shit you read on these forums.
 
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so when Sony will do it will be sustainable isn't it? :) We've all been saying this for over a year now gamepass is revolutionizing the video game business and it's so convenient (for users) that it's just silly not to accept it. If then whoever launches the service will be able to have 60/80 million users. it will earn so much that no one will want to return to the previous business anymore. Sony will copy gamepass is just a question of when not of if. Jimbo says what he has to say at the moment will change tone when will launch their own gamepass service
This. Sony and companies in general have done this countless times. PR departments word is only good for the moment it's said, hell at times in history not even that has held true.