Bernd Lauert
Banned
This makes his claims even more funny, tbh.
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Sony CFO insists AAA game quality ‘will deteriorate’ if it adopts Game Pass-style strategy
- Thread starter IbizaPocholo
- Start date
- Opinion Game Dev Platform
StreetsofBeige
Gold Member
High budget games on sub plan isnt so much a yes or no.
It's more of a when.
Sony's own first party games come to PS Now. And they even said their new sub plans in June (I think the premium tier but not sure) will even have Returnal and some other PS5 games.
It's more of a when.
Sony's own first party games come to PS Now. And they even said their new sub plans in June (I think the premium tier but not sure) will even have Returnal and some other PS5 games.
DeepEnigma
Gold Member
I believe they have access to information that can correlate his claims with development costs for current AAA being sustainable on a monthly release basis.
Bernd Lauert
Banned
And Jimbo said they will pivot if necessary. It's not like he's categorically saying no to it. It's just much riskier for Sony compared to Microsoft (money wise).
Kssio_Aug
Member
I think that's just an excuse for them to justify why they won't do a Game Pass like service. But at the same time, I think it's alright... not every company needs a subscription service like that; and maybe that's not feasible for them. I don't buy this argument though, and it feels to me they took the opportunity to poke on MS.
Also, if I'm gonna be honest, although Sony biggest 1st party games being undeniably awesome in terms of production value, I really think it's time for them shake things up a bit. Their games have been becoming too formulaic too.
Also, if I'm gonna be honest, although Sony biggest 1st party games being undeniably awesome in terms of production value, I really think it's time for them shake things up a bit. Their games have been becoming too formulaic too.
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Punished Miku
Human Rights Subscription Service
Probably an investor question. Everyone's reporting quarterly results now. Pretty common question for almost all entertainment companies now.
ManaByte
Member
So you defended Layton for claiming a steaming service needs $5 billion a month to be viable and then couldn’t back up that defense. Got it.
SSfox
Member
i agree with him , dude is honest
I trust this guy over Phil Spencer any day of the week
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Bernd Lauert
Banned
You don't have to trust CEOs and CFOs, you can do the math yourself, since math doesn't lie.
Mibu no ookami
Demoted Member® Pro™
That largely ignores the price elasticity of subscription services, which is already impacting services like Netflix. It's a super delicate balance and for a company like SIE it really doesn't make sense when you can have your cake and eat it too.
They don't need their subscription service to have as much return as Microsoft's when their first party revenue and 3rd party royalties add up to significantly higher revenue and more importantly higher profit margins.
A subscription model that directly eats into Sony's primary profit stream makes no sense. Microsoft on the other hand never really had this profit driver. Their hardware sold less than Sony, their 3rd party revenue was less than sony, and their first party revenue was significantly less than Sony.
adamsapple
Or is it just one of Phil's balls in my throat?
5 billion ? jesus does *ANY* entertainment industry make that kind of money in a month ?
I think nothing short of defense contractors would come anywhere close lol.
DeepEnigma
Gold Member
And you can't back up your claim as why it can't with their current AAA model, infrastructure (Sony doesn't own massive data centers), etc.. Context and nuance matters, I know that falls short on you often.
Present the math.
Present the math with Sony's infrastructure operating costs, AAA development investments, overhead, etc...
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yurinka
Member
Sony isn't against putting 1st party games on a subscription, they have been making this since before MS started to do it. Sony is against putting them day one in the subscription because unlike MS they want to continue having a profitable business with their AAA games.
Sony's current strategy of selling their games and only including them in a sub once they completed their sales lifecycle is way more successful: they make more revenue, profit, consoles sold, active userbase and even game subs and revenue from game subs than MS. Sony are the market leaders and have the winner strategy, there's no reason for changing their strategy for an unprofitable one that performs worse.
That 'infrastructure' thing is total bullshit. Sony has their own PSN, PS+ and PS Now servers and infrastructure, plus many related patents and they can put them in any data centers they desire. Like any other huge company has their own some data centers but most of the ones they operate are from external companies because it's cheaper than to build, own and mantain them specially when you have a huge scale of online multiplayer and cloud gaming, which requires to have servers if not in the same country/region of the player, almost.
What Sony says is that AAA games cost hundreds of millions of dollars to be developed plus hundreds of millions of dollars to be marketed. And that if you want to keep doing them and have a profitable business the only option is to sell them and not giving them away in a game subscription day one. They say that having the biggest known game sub in terms of revenue, subbers, amount of games and years of experience running a game sub or cloud gaming.
We don't have a single number proving that it's profitable to run a gaming business putting your AAA games on a game sub day one. There is absolutely nothing to back the claim that it's profitable to put a AAA game behind a game subscription day one and/or that it's more profitable that to do it years after the game has been only being sold.
It isn't an excuse, it's common sense. Sony is the market leader in console and AAA game subs. Sony's game subscription strategy is way more successful and unlike the Game Pass one allows to have a profitable business.
It doesn't make sense at all for them to put their full AAA games day one on a game sub, because it's a financially suicide choice and Sony wants to keep having a profitable business instead by selling their games and once they stop selling including them on a game sub.
Each AAA game costs hundreds of milliions, they release many of them per year and a game sub doesn't generate enough money to pay them, even Sony's subscription which is the most successful one. A company like Sony uses the revenue from the sales not only to pay the costs of that game, but also to fund the development of the other games being developed at this studio and also to reinvest it to grow these teams.
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SLB1904
Banned
I googled and I can't find anywhere where he said you need 5bil. Do you have any links?
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nominedomine
Banned
They already have a subscription service that has close to 50m subscribers on their platform, like it or not. I really don't understand where people are coming from thinking that somehow Gamepass is a massive money maker at $15 (at most, since that's the price of Ultimate) but somehow what Sony has can't compete.
Sony games keep selling better than ever, their hardware keeps selling out, their subscription service keeps selling (and now they'll attempt to get more people to move to the higher tier to make an extra $5/$7).
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Bernd Lauert
Banned
AAA games cost $100m-$150m on average. Which means you can make 30+ AAA games for 5 billion dollars. And he claims you need to make 5 billion a month to sustain something like Gamepass. Doesn't add up at all, unless you expect Microsoft to release 30 AAA games a month.
DeepEnigma
Gold Member
Bernd Lauert
Banned
Roxkis_ii
Banned
I don't think the pressure is from Sony fans lol
DeepEnigma
Gold Member
Now do the cost for infrastructure (Sony doesn't own an Azure), 1 AAA game a month (this is what MS tried to claim as a goal or was it fan hopes?), third party deals, revenue sharing with all developers/publishers, etc, etc, etc vs a sub cost at low number of subscribers at the moment.
You leave out a lot of details with basic bitch napkin math.
nominedomine
Banned
It's so funny that you pretend to know what you are talking about but you seem think Gamepass cost is limited to the cost of developing AAA games.
How about the cost of xCloud investments, the cost of licensing games, the big chunk of the money that they would be making anyway just because of Gold (someone that moved from Gold to Ultima started paying only an additional $5 to them), the impact the service has on sale, etc.
If all you get from Gamepass are MS AAA games not many people will be paying $15 every months that isn't how the service is being promoted. There were ridiculous long stretches recently were MS had almost no internal AAA game hitting the service and now between Halo/Forza and Starfield apparently they'll go almost an entire year without another one (and that is with a new console releasing, something unheard off).
Subscription begging is worst than port begging (maybe on pair with acquisition begging). All time low point in this sort of behaviors online. You go into an enthusiasm forum, to discuss games and all people care about is paying just $15 to play all games no matter what. I don't relate at all to it.
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kingfey
Banned
If that is the case, then they need to shove their game sales on the face of those investors and media. And just tell them, our games sell that much copies. We don't need subscription service to sell our games.
The longer this saga prolonges, the longer Sony is digging their grave.
There is only 1 end game to these persistent questions, and it will end up ugly for Sony, if they do the thing they said will hurt their game quality.
Bernd Lauert
Banned
It's still no where close to what he claims, easily an order of magnitude less money is required.. MS goal is 1 AAA game a quarter btw.
SLB1904
Banned
LazyParrot
Member
It's deteriorating regardless of the business model lol. Higher development costs -> greater financial risk -> more pressure to move more copies -> more focus on copying what has sold in the past instead of coming up with new shit. It's inevitable.
Roberts
Member
Well, they keep talking about it seemingly every month. Somebody seems to pressure them. Otherwise why bring it up. Investors?
kingfey
Banned
Gamepass isn't extra service.
Its part of existence service. The licence and everything there is to be paid by whatever gamepass makes.
One month old games are cheap to get and doesn't that much. Only expensive games are day1 games, especially day1 timed exclusive games.
Bernd Lauert
Banned
Source has been posted, it's a gameindustry.biz interview.
Topher
Identifies as young
"Peter Wyse, head of publishing for Xbox, reiterated the company's plans to reach 3 billion players by committing to enhancing user diversity across all of their platforms, writes PC Gamer. His claims come after the massive success of Microsoft and Xbox at this year's E3, where Game Pass mostly stole the show. "
Xbox Wants To Get to 3 Billion Players With or Without Consoles, Says Publishing Head
Xbox wants to gain a massive amount of market share in the future: 3 billion players and they plan to bring their games to people with or without Xbox consoles.
www.techtimes.com
Lol.
It is clear to anybody with brain cells that Layden's "you need 500 million subs to have a profit" is just bullshit.
500 million subs at 10€ per month is 60 billion in revenue per year. And that's ignoring all other revenue streams that games can have.
I do not have to be a CEO to say you this.
tmlDan
Member
you're making up numbers, you're clearly a doofus.
It's not as simple as this is how much it costs and this is how much i make on a service.....you have no idea what the overhead costs are and the actual figures for everything from production, employee wages, marketing, tech, travel, payment for exclusivity, royalty deals, paying for it to be on the service, R&D etc....
ManaByte
Member
I posted it above. Since you ignored it, here it is again.
He says you need 500m subscribers at $10 a month to be viable. That’s $5 billion a month.
DeepEnigma
Gold Member
And this post said it best.
There are more than 1 AAA game. There are hundreds of third party and still first party games you need to share money with. Then there is infrastructure costs, etc, etc..
They are speaking on their model and how it would work for them. They don't own any data centers.
Shocker, I know.
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Topher
Identifies as young
So how much revenue is required to fund and profit from all of Microsoft's studios as well as continue adding third party content to the subscription?
DeepEnigma
Gold Member
A2una1
Member
I actually don't know if they can't do it well since they never did one in recent memory. But if Bloodborne and Demons Souls count, they actualy can
.And up to now, no Microsoft RPG has been released yet, they were all bought afterwards...
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adamsapple
Or is it just one of Phil's balls in my throat?
Probably less than $5 bn a month if I were to take a guess.
Honestly, I consider Horizon a WRPG. God of War not as much, but Horizon is *very* WRPG.
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Guilty_AI
Member
So does MS
Roxkis_ii
Banned
Not to say these forums mirror life outside, but I've only seen Xbox fans waiting Sony to make a gamepass competitor. No one with business sense would ask a company to throw away profits.
I think for most Sony fans feel like if it not broken why fix it.
DeepEnigma
Gold Member
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Bernd Lauert
Banned
The latest estimate of Gamepass revenue is $2.2B a year, if I remember correctly. And Uncle Phil said Gamepass is not burning any money, so apparently that's the bare minimum you gotta make.
blastprocessor
The Amiga Brotherhood
Will first party PS5 (current gen only) be superior to Series S/X 1st party titles (current gen only) is a question that will be interesting to find an answer to later in the generation.
I do feel Sony have the upper hand overall from their 1st party studios on PS4 already.
I do feel Sony have the upper hand overall from their 1st party studios on PS4 already.
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MasterCornholio
Member
What makes a game "Quality" is the real question? Is it this...
Seems the loud majority have decided that 3rd person single player adventure games are the bar for which "quality" is judged. Beyond this one genre of games I don't see where Sony's "quality" is any better than any other developer.
For future reference people that post that picture usually get banned.
nominedomine
Banned
If Gamepass is making all that money at $15 at most and 25m subscribers and all the effort put into Gamepass then we must assume that Sony is making bank with close to 50m subscribers paying $10 and close to zero effort from Sony's part.
We'll see how many people Sony can convince to pay an extra $5 or $7 bucks now that it seems they'll make an effort to provide more value in their sub.
You guys can like Gamepass all you want but please stop with the proselytizing that Gamepass is the only way forward. To this day, Gamepass hasn't proved anything in terms of being a dominant business model for the game market. All people can hang on to are projections of how things will be in the future if X and Y happens.
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