phil_t98
#SonyToo
Server costs, bandwidth costs. Different stores different costs. It’s not like it doesn’t cost them money to maintain servers or stuff like that.
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Server costs, bandwidth costs. Different stores different costs. It’s not like it doesn’t cost them money to maintain servers or stuff like that.
Calverz
Member
Topher
Gold Member
Ghost of Caelid
Banned
They should...its an exploitative fee in every single case. Didn't Xbox reduce theirs to 12%? Far more reasonable. That should be the standard.
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Calverz
Member
The marginal cost of selling a game is effectively 0 since all the storefront does is assign a new license. Servers are bought once and bandwidth is purchased on long term contracts. Digital storefront costs are roughly fixed while the amount of products they can sell is infinite. 30% is only "standard" because each major digital storefront operates a local monopoly.
Physical retailers take roughly the same cut but they have significantly higher costs. Physical retailers also lack a mechanism to get customers to pay for the upkeep of the store in the way that console makers lock online play behind a paywall.
FF:Enhanced_Reality
Member
30%
Literally my exact thought and if you knew why it's been that way for nearly 30 years, you'll be thanking Sony very much so.
Nintendo and SEGA used to have fees on their products and services that bad that on a £40/$40 game, the developer might receive £12/$12 at best due to the fact that SEGA and Nintendo had additional licensing charges and they controlled the manufacturing of cartridges and other materials. The exception being the yellow tab SEGA cartridges which were unofficial but you better believe they tried shutting that shit down in court.
Games come out at varied prices whether you buy digital or physical. They go on sale and they drop in price. Publishers and developers who are independent choose their own pricing and Sony don't control all of that. They could, but it would probably damage their relationships with some publishers and developers. That 30% to the best of my knowledge applies to Nintendo and Microsoft, albeit Nintendo used to charge much much more. The cost of developing games continues to rise and the costs of games go with it. It is what it is. Not every game is £70 and I think a lot of the merit here is misleading.
This sounds more like a response from gamers who are milking game pass which for the cost of running the service, virtually gives games away for free. That £10 a month you pay even with millions of subscribers doesn't even begin to cover the cost of the project.
The 30% fee that's industry standard for decades?
Literally my exact thought and if you knew why it's been that way for nearly 30 years, you'll be thanking Sony very much so.
Nintendo and SEGA used to have fees on their products and services that bad that on a £40/$40 game, the developer might receive £12/$12 at best due to the fact that SEGA and Nintendo had additional licensing charges and they controlled the manufacturing of cartridges and other materials. The exception being the yellow tab SEGA cartridges which were unofficial but you better believe they tried shutting that shit down in court.
Games come out at varied prices whether you buy digital or physical. They go on sale and they drop in price. Publishers and developers who are independent choose their own pricing and Sony don't control all of that. They could, but it would probably damage their relationships with some publishers and developers. That 30% to the best of my knowledge applies to Nintendo and Microsoft, albeit Nintendo used to charge much much more. The cost of developing games continues to rise and the costs of games go with it. It is what it is. Not every game is £70 and I think a lot of the merit here is misleading.
This sounds more like a response from gamers who are milking game pass which for the cost of running the service, virtually gives games away for free. That £10 a month you pay even with millions of subscribers doesn't even begin to cover the cost of the project.
Ghost of Caelid
Banned
I think more money going to the developer per sale is a good thing. It may not go to the consumer in sales but if properly managed that extra fund going into the developers pockets means game development for them can be more stable. Even if that extra money goes into a void, I'll probably sleep a little better knowing that exploitative companies are making slightly less.
Topher
Gold Member
No, Xbox is 30% as well. Windows store is 12% as they are desperately trying to attract more publishers and devs.
I have no problem with developers getting a larger take. I'm just reading people saying consumers are paying more because of this and that just isn't the case.
FF:Enhanced_Reality
Member
Also, for those interested, read this article.
https://www.tweaktown.com/news/7915...is-required-to-build-xbox-consoles/index.html
Microsoft do exactly the same thing, as do Nintendo. Microsoft admit if they don't, their business is in danger.
This fee pays for research, development, wages, infrastructure, the hundreds of thousands of servers for hosting your games and network services, the logistics, the legal side of games. Etc.
Take the 30% away from any company and there's no point being in the games industry. Reduce the price of digital games, maybe, but then you're in a rock and hard place because you'll kill physical retail and they'll sue you saying you did it with prejudice as you make more money on digital games. If it was 50%, I'd understand, but regardless of if a game is £19.99, £34.99, £59.99 or £69.99, that flat fee is 30%. And Sony have decreased that as a bargaining tactic in the past. I bet Nintendo and Microsoft have too. Would that make games cheaper for us? Not necessarily because independent developers and publishers decide their pricings in house.
https://www.tweaktown.com/news/7915...is-required-to-build-xbox-consoles/index.html
Microsoft do exactly the same thing, as do Nintendo. Microsoft admit if they don't, their business is in danger.
This fee pays for research, development, wages, infrastructure, the hundreds of thousands of servers for hosting your games and network services, the logistics, the legal side of games. Etc.
Take the 30% away from any company and there's no point being in the games industry. Reduce the price of digital games, maybe, but then you're in a rock and hard place because you'll kill physical retail and they'll sue you saying you did it with prejudice as you make more money on digital games. If it was 50%, I'd understand, but regardless of if a game is £19.99, £34.99, £59.99 or £69.99, that flat fee is 30%. And Sony have decreased that as a bargaining tactic in the past. I bet Nintendo and Microsoft have too. Would that make games cheaper for us? Not necessarily because independent developers and publishers decide their pricings in house.
Jim Ryan other Clone
Banned
Why it matters to you if Sony or Microsoft take 30% from Blizzard to put on their store diablo 3 and why it's not fair? They provide the consoles and the marketplace for you to sell your product, many times marketing and player base to sell you game. Do you know how much the local supermarket charge for a food factory to put their food in the store? Why you don't complain about it?
In Greece the farmer is selling goat milk for 1.30€ per liter and the supermarket is selling it 3.30 is anyone crying why the supermarket is supercharging for every product? I was working in fish factory, we were buying octopus 0.50€ unprocessed per kilo from Indonesia and after processing we were selling it 5-6 € to supermarket with their branding and they were selling it 12€ per kilo. Stop crying and educate yourself. No market place is free, no one would put your product in their store for the soul of your mother..
phil_t98
#SonyToo
So there isn’t staffing costs? Maintenance costs?
You have no clue what it costs to run that type of business. All the big three charge the same
lostinblue
Banned
I already paid for the console, why do I have to agree with a 30% fee for everything I buy being fair?
I already pay VAT, and it's not as high. I believe their margins will go down eventually precisely due to scrutiny, they're just fighting to keep them this high for as long as possible.
The case has no merit, but the bigger the scrutiny the better.
Well I'm not saying the supermarket is right, I think they should be taxed accordingly and be obliged by law to give their employees raises comparable with their profits, not just their CEO's.
Hitting all time high profits while inflation is hitting all time highs screams monopoly. Anyway, a 30% fee for every sale on a digital marketplace should be forbidden if you ask me, it has no handling, no limit of sales, nothing. It's just free money. And massive markups should pay extra taxes as well. Luxuty items should pay more taxes.
Of course they do.
They can't charge more and they don't want to charge less. But they can certainly charge less.
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Jim Ryan other Clone
Banned
You are correct at your thoughts that you have the console why to pay more but even if they take 0% you would be pay the same price because the publisher would not allow his game to be sold 30% lower. It would be good but if you see EGS and steam that charge less their games cost the same.
Topher
Gold Member
Good find.
"According to Lori Wright, Vice President, Gaming, Media & Entertainment at Microsoft, the company's 30% revenue commission is "required" for Xbox consoles to be manufactured or sold. All Xbox hardware has been sold at a loss, and not a single generation's hardware sales have been profitable.
"Your justification for the 30% commission is because the hardware doesn't make money," Apple counsel asked in the trial.
"My justification is that the commission is required for us to even build the console," Wright replied.
phil_t98
#SonyToo
you don't have to agree to 30% you can go buy the disc or if you want even less buy second hand. the choice is yours.
also they will take 30% of a cut after VAT so its even less than you think that they make. how much do you think the supermarket is making on a game when they sell it?
Why don't you tell me how much you think running something like PSN costs instead of trying to discredit me? I'm quite curious to see what you can come up with.
GHG
Member
There are some idiots out there who believe no company should ever make any profit but at the same time still want to be able to afford to pay their bills and put food on the table.
phil_t98
#SonyToo
Your the one that made the claim that it costs 0 to sell the game on a store front so where you getting this info? You have made a claim right there so where you get this info from?
lostinblue
Banned
Their service is worth a cost, make no mistake (should come with more obligations of maintenance/quality of service though). I don't think games would get any cheaper for me as a consumer but I don't think we would be talking about $79.99 games this generation either.
I just think 30% is a high sum, that could benefit the publisher and fund more games being developed or being more polished in the process. More money going around also means more work for people who work in the industry. My issue with high margins in supermarkets, online services, etc, is how that money only funds rich people getting richer, they charge 30% but we're not getting a better service due to it, and won't. Their service doesn't cost that so it's basically like a mafia system, your business has to go through them so you pay their fee and shut up.
If this service actually cost a lot and re-investment was high, or their employees benefitted a lot with equality distribution I think it's more justifiable. I think situations like Amazon locations feeling like slavery are insane when the guy is building rockets to spend 15 seconds in space. My whole issue is most of the money not being reintroduced to the economy in some way shape or form, basically.
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You should look up what "marginal cost" means then reread what I wrote. Ask if you don't understand a term next time.
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GHG
Member
Since you've got it all figured out and it's so simple then why don't you start your own PC game storefront? It's a free market, what's stopping you?
Opportunity of a lifetime my friend.
lostinblue
Banned
Issue is when, for them to make a profit, they force their suppliers to have really low margins, and effectively go bankrupt.
A lot of these supermarket companies also have 90 day payment schemes. Imagine you sell meat to them, Meat is badly refrigerated on the way by them, rendering the meat unusable They pay you 0 dollars for that meat because they were unable to sell it. (and it's likely that they won't tell the supplier that happened before the 90 day window is up) This usually doesn't happen of course, but it's normal for the end payment to be lower than the original value of the product you sold to them. I've seen supermarkets deducting the cost of vases that clients trashed, from the amount to be paid to the seller and plenty other things.
Expensive bottle that fell from the bracket and broke? not their problem, which is why they never tell you you have to pay something you broke.
I've also seen them deducting/charging a fee because their product appeared on their pamphlet (which the supplier didn't ask for, nor agreed to pay for). I imagine the seller being, "Jeez, thank you I guess?" That also results in getting less money than they would if the product got sold and they didn't get charged for advertising.
Supermarket Retail is nuts if you ask me. Also disgusting.
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GHG
Member
No, if the suppliers go bankrupt then they had a bad business model (or product) to start with, it's nobody else's fault. If those businesses are pointing the finger elsewhere then they have a problem that is unfortunately endemic in our society today - nobody wants to admit fault or take accountability and will instead blame others for their own plight.
In all of the examples you've given there is something the business could have done to mitigate the issues they faced. How do I know that to be true? Because if not nobody would succeed, everyone would go out of business and shelves everywhere would be empty. But alas, supermarket retail isn't even the topic of discussion here.
You seem to have a very simplistic view of how businesses work and are run. It is common that businesses will have low (or even negative) margin areas of the business that will be offset by high margin products/services in other areas.
Running a business that has multiple streams of income is not a case of 1+1=2. The decisions that are taken to exploit opportunities for higher margin in certain areas are often taken in order to maintain overall business health. In addition to that, it's very rare that you will find a business that offers an ongoing service without them also having to deal with ongoing maintenance costs in the background.
You seek a utopia that doesn't exist, it's delusional.
lostinblue
Banned
I respect your points but disagree. And anything we say here will always be simplistic, even if you get into details you'll always be scratching the surface which is what me and you are doing with our posts and separate viewpoints. I also think yours is simplistic, you think market surveillance and law enforcing is utopia/delusional, I think it's the lack of it that is.
Of course suppliers can defend against that and survive, but that doesn't make it right or make the odds correctly stacked. Two or three bad deals can make a small company go bankrupt even if they're clever and do everything in their power to plan things out, if those were forced upon them by a set of companies that has more power over their product than they do, is it still their fault, are they wrong in saying they were wronged by big companies who were defending their own interests in spite of theirs? (most companies and owners don't even say anything, they just disappear and don't have a voice) Note that in the current economy it's already quite easy for small companies to bite the dust due to sudden consumer habits or increases in the money they spend to produce something. Legislation plays a big factor here, as does the lack of it.
It's also curious that every normal company suffers but the big ones don't, because they curb themselves out of any risk at the cost of placing all that risk elsewhere.
Someone mentioned milk, the cow milk industry is getting squandered where I live due to supermarket margins and how low they actually pay for the product. Is the fault in the manufacturers? all of them who've been complaining for years now? Supermarkets will pay the minimum for as long they can get away with it, and then raise only the minimum to keep it going again, every cent that they don't spend counts. Meanwhile the sector is very unprofitable and soon we'll start to import instead.
These situations are also probably not the same in every country. I have to say that where I live it's pretty bad because the economy is weak, legislation and surveillance is low and the supermarket companies are very big, there are proven complaints of price concertation and the like, but it never goes anywhere.
Regardless, I think I've said all I can about this topic. I agree to disagree on everything else, but don't paint me as a loom.
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phil_t98
#SonyToo
No come on, you got it all figured out what it costs them . You said it costs 0 to sell a game in your previous post so come show us where you have found this amazing data to back up your claim
So how much is Sony paying Microsoft for the use of the severs to host all this? It must be free as you said it costs 0 to sell a game on a storefront such as PSN
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THE DUCK
voted poster of the decade by bots
Well I assume in some markets Sony has share dominance. I don't think smaller players doing something potentially wrong would obsolve them.
THE DUCK
voted poster of the decade by bots
Well sure, but most of these are 2-5%, not 30%.
DaGwaphics
Member
It's called waiting for a sale.
Thou shalt not purchase without a sale. I think that's in the official terms somewhere.
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DeepEnigma
Gold Member
It's almost like we live in a world where all digital storefronts from every big player, never have sales.
Well, maybe not Nintendo.
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Kataploom
Gold Member
It's about... ehmmm... justice... and the gamers... and stuff... you know, just pure charity and stuff...
Captain Toad
Banned
How dare you charge the same amount as every other major platform holder Sony? You must be held accountable!
IFireflyl
Gold Member
Market share dominance by itself is irrelevant. Sony isn't abusing their market share dominance in order to strong-arm the industry. The keywords in that statement are "abusing" and "strong-arm". Just because a company is sitting on top doesn't mean that any action they take is anti-competitive. The company essentially has to attempt to bend the industry to their will, or attempt to steamroll the competition.
For example, if Sony told a third-party publisher that in order to release a game on the PS5 that they could never release a game with a Nintendo or Microsoft, that would be anti-competition. That would be a company Sony abusing their market share dominance in order strong-arm the industry (in this case, steam-roll publishers to the detriment of Nintendo/Microsoft).
What we have here is a company (Sony) who is adhering to already established industry norms (the 30% tax). There are no laws established that make the 30% tax illegal, and the 30% tax that has become an industry standard is no more Sony's fault than it was Apple's fault. This isn't an anti-competition issue. I struggle to see how it is even an anti-consumer issue since it's really the publishers/developers that get screwed over by it, and not the consumer. There is no evidence that the 30% tax has any impact on the consumer, and unless the prosecutors can come up with hard evidence for this then the whole case is dead in the water.
THE DUCK
voted poster of the decade by bots
I'm not even generally against what you are saying here, but one would think ot has a least a weak set of teeth from some angle.
IFireflyl
Gold Member
I'm telling you what the law says. Nothing more; nothing less. We already saw virtually the exact same lawsuit against Apple by Epic Games, and Epic Games lost badly. The only stipulation there was that Apple couldn't prevent developers from linking to third-party payment sites. I'm telling you, based on the law this lawsuit is going to face plant. Especially since it's not only Sony with the 30% fee. All Sony has to do is say, "Almost everyone else is doing the same thing. This is an industry standard in all but name."
I wrote that the marginal cost of selling a game is zero. That is not the same as saying that the cost of selling a game is zero. Marginal cost is a basic accounting term which is used to identify the incremental cost of producing or selling an extra unit of something. That number is zero for the console makers because it costs nothing to sell an additional copy of the game. Sony does not buy a new server every time a copy of HFW is sold because the same server can sell an infinite number of copies. Microsoft does not add a new fiber line to its data center every time a copy of Forza is sold because bandwidth at enterprise scale is a fixed cost. Neither copy needs to worry about locking up capital in inventory because any number of customers can download the same copy. Server, bandwidth, and maintenance costs exist but they remain the same regardless of how many games are sold on the storefronts hence the marginal cost is 0.
I also said that the console makers get others to pay for their services. That is what PS+ and XBL are for. Console makers normalized an annual $60 licensing fee to play online. Sony or Microsoft would have to create a robust account system for their storefront anyways hence why online was free for the non-MS consoles for generations. Instead they found a way to make their users cover the cost of infrastructure. PS+ has around 50 million subscribers. That works out to around $3,000m in revenue or equivalent to the municipal budget of San Diego. Do you really think that the fixed costs of the PlayStation network are so high? The cost of 10,000 employees at a blended salary of $0.1 million per year is only $1,000 million. That leaves around $2,000 million to cover operations before a single game or console is sold. Costco is the only analog in physical retail that I can think of. It sells goods at a lower price because it receives around $4,000 million in revenue up front. If Costco can offer lower prices to its customer while dealing with the high cost of retail then there is no excuse for why the price and cut of game storefronts is static.
Thirty7ven
Banned
That law suit is literally a bunch of nothing that also affects Nintendo and Xbox.
Justin9mm
Member
So let me paint a picture, you only own a PS5 and you bought the digital edition. This is the case for a lot of people. Some people can only afford one gaming platform, some people could only afford or get a hold of the digital edition, next gen digital edition may be the only option. How does Sony not have the monopoly?
phil_t98
#SonyToo
so where has the marginal cost of 0 which is still zero coming from? do you have facts to back this up?
are these just numbers your made up yourself or do you have facts to back them?
Digital goods have a marginal cost of 0 in a perfect market. Not my opinion btw, the entire digital economy is based on that concept. You keep repeating yourself because you don't understand marginal cost. I've explained why several times and even linked you to an article which described the term in detail. If you understand what I wrote then explain which of my statements is incorrect in detail and why selling games has a significant marginal cost.
phil_t98
#SonyToo
I dont think you understand the costs of running a digital network and market place. servers and bandwidth comes at a cost, digital security for that market place comes at a cost. remember that Sony are paying Microsoft to use the azure servers and that wont be cheap. You just pulling figures out of the sky with no evidence to back it up
I do. You don't. Thats why you keep repeating yourself and saying things which only sound good because you don't have any background.
phil_t98
#SonyToo
So bring the evidence to back up your coatings that it cost Sony or Microsoft or Nintendo 0 to host a digital store and sell games
Depends what side of the pond you are. "are" is grammatically correct for a company too.
Panajev2001a
GAF's Pleasant Genius
It does not and we ignore recouping investment, maintenance/improvements/re-engineering (migrations of frameworks, cloud solutions, etc…)/salaries/etc…, we ignore gasp trying to make profits, etc…
We are going in the accounting technicalities trying to justify that if you look at things from a certain angle it appears that there is no cost in selling games digitally (well to be fair the platform fees are not just on digital and unfortunately it is common that the convenience we get not having to manage discs ourselves, disc rot over time and space, and having all these games delivered to us effortlessly is something people are charging for.
That is the misleading part of the equation: the production and inventory management costs went down with the movement to digital (less middlemen too) but prices of software stayed the same or increased. This is orthogonal to platform royalties though.
rofif
Can’t Git Gud
The server farms are very expensive and require constant upkeep.
It probably costs more than to print games on discs.... and printing a game is one and done deal.
Of course you still need to host patches but it's less than whole games.
Anyway - I always buy physical games and it's usually much cheaper than on psn
It probably costs more than to print games on discs.... and printing a game is one and done deal.
Of course you still need to host patches but it's less than whole games.
Anyway - I always buy physical games and it's usually much cheaper than on psn
phil_t98
#SonyToo
Your replying to the wrong person. I ain’t the one saying it costs virtually nothing to sell digital games