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[Brad Grenz]

People aren't smart enough to figure this out. This thing would still sell BOATLOADS at even this ridiculous price. Sometimes I hare living on this planet.

People don't have to "figure it out", Sony will just run ads saying, "$399, no contract, no early termination fees, no bull."

Subsidized is not meant to be a deal.... it is meant to lower the upfront costs and charge an extra "fee" on top of it for the trouble of them having to charge you monthly. Go check out rentacenter or other "lease to own" companies. You always pay more than upright buying the item. However you can do monthly payments which enable "lower income" (or people with little extra spending money) the opportunity to enjoy higher priced items they ordinarily would not have the option to.

If the nextbox requires live (and a subscription) to function it will be even worse than cell phone plan subsidization. At least in that case you can still do things with the phone even if you can no longer do calls.

But actual subsidies in other industries ARE a deal. If you don't upgrade your smartphone on contract every two year you're losing money since your cell bill is the same whether they knock $400 off the price of a phone for you or not, and you can probably sell your old iPhone off contract for as much as the on-contract price of your new phone. What Thurrott describes isn't really a subsidy, it's a financing offer. They triple price of Live before they offer the point of sale discount. You're taking out a loan, and your credit account just happens to include most of the features of a Gold subscription. That's more like your rent-to-own example which is emphatically NOT a subsidy (though Microsoft's financing terms aren't nearly as egregious as most rent-a-centers where you usually end up paying 5 times retail).

 

[alstein]

Wouldn't be surprised if free online persisted on PS4 in some way, but in an incredibly gimped and unappealing form; maybe even limiting how much you can play online, for example. That way they can still advertise their console as having free online and still nab some goodwill with that.

That won't work. I really think there would be massive outrage if Sony started charging, enough to derail the console.

I can see minor gimping, but Sony fans have had years of not paying, and folks really don't like paying something for what they think should be free. Microsoft fans have had years of paying the junk fee, they're used to it.

 

[rdrr gnr]

That won't work. I really think there would be massive outrage if Sony started charging, enough to derail the console.

I can see minor gimping, but Sony fans have had years of not paying, and folks really don't like paying something for what they think should be free. Microsoft fans have had years of paying the junk fee, they're used to it.

Nope. People will still pay. We might have to face the unfortunate reality that sectioning off multiplayer behind a paywall is more influential than most any "feature" Sony could offer. Do we have numbers on the PS+ adoption rate?

 

[Brad Grenz]

No, but MS does not release official Gold figures either. Anecdotally, about half the people on my friends list have PS Plus badges on their Avatar. That's not to suggest 50% penetration among all PSN accounts, of course, but I would guess it's far more successful than a lot of people realize.

 

[spisho]

Nope. People will still pay. We might have to face the unfortunate reality that sectioning off multiplayer behind a paywall is more influential than most any "feature" Sony could offer.

Well that's depressing.

 

[Miles Quaritch]

No, but MS does not release official Gold figures either. Anecdotally, about half the people on my friends list have PS Plus badges on their Avatar. That's not to suggest 50% penetration among all PSN accounts, of course, but I would guess it's far more successful than a lot of people realize.

We have some numbers, at last count the number of Xbox Live subscribers (I assume that means just having a live account regardless of gold/silver) was 46m.

And if I'm not mistaken (although I can't seem to find the site that claimed this), the last numbers for gold were just shy of 20m. Again, I can't find the site that claimed this back in early 2012 nor do I know if the site was trustworthy, but we do have some numbers...

 

[EvB]

I'm Microsoft said that 50% of the 50million love accounts are gold.

It's hard to know how many actual PSN accounts there are, as they amalgamated various other Sony accounts into the figures. At one point they claimed they had X many PSN accounts, but the figure was even higher than the number if consoles they had actually sold.

 

[Maximilian E.]

I'm Microsoft said that 50% of the 50million love accounts are gold.

It's hard to know how many actual PSN accounts there are, as they amalgamated various other Sony accounts into the figures. At one point they claimed they had X many PSN accounts, but the figure was even higher than the number if consoles they had actually sold.

if 50% is true, then its quite impressive to have 25 million paying customers every month.
Not too freaking shabby!

 

[alstein]

No, but MS does not release official Gold figures either. Anecdotally, about half the people on my friends list have PS Plus badges on their Avatar. That's not to suggest 50% penetration among all PSN accounts, of course, but I would guess it's far more successful than a lot of people realize.

It's about 15-20% on mine. Odds are the truth is somewhere in the middle. That said, my FL is nearly entirely VF players who don't play many other PS3 games, so PSN is less valuable for them.

The question for me is whether folks with a PS3 are less tolerant of paying than 360 folks. I wouldn't be surprised if this is the case. The next question is if Sony decides to add the junk fee, what do those folks do- I suspect many would walk- a console isn't the big deal it was last gen, especially with PC gaming now being a more popular alternative, and many of these gamers being older.

I do think enough people would pay that it wouldn't hurt Sony, but it could hurt the publishers, as a lower install base= lower sales.

 

[Chittagong]

Given that the average console will be in use for over 2 years, a smarter and simpler way would have been to position this as a "Xbox Live Pro" version of the console, which simply requires a "Live Pro" $15/month sub to run.

This would avoid messaging complexity around timeframes, subsidies etc. Plus probably would end up making more money to them this way, since gamers would end up extending that $15 over the 2 years.

 

[monome]

So we know the price and we still excpect a magic specs bump.

Live needs to offer more value.
MS Will have a hard time keeping up with expectations and fighting on all fronts

 

[Brad Grenz]

We have some numbers, at last count the number of Xbox Live subscribers (I assume that means just having a live account regardless of gold/silver) was 46m.

And if I'm not mistaken (although I can't seem to find the site that claimed this), the last numbers for gold were just shy of 20m. Again, I can't find the site that claimed this back in early 2012 nor do I know if the site was trustworthy, but we do have some numbers...

Right, we know there are 46 million Live accounts, and MS has said before something like half of Live accounts are gold so we can guess it's somewhere like 20-30 million Gold subscribers. But MS very pointedly does not give out the exact number, nor do they say explicitly how much revenue Gold subscriptions bring in each year.

I think it's possible Sony will use the anniversary of the IGC's introduction this E3 to tell us how many members the service has. My guess would be somewhere in the 6-10 million range. At $50 a year per person that's actually a nice chunk of change. Spend about half on content deals for the service and keep the rest as profit!

 

[Metal Gear?!]

So Sony should have charged $900 or whatever the true cost was for PS3 at launch?

That's a different (though similar) issue. The point is using contracts to subsidize hides the true cost and can really mess with the expectations of consumers in the market - just look at the cell phone market in the US and Canada. People think the latest and greatest phones "cost" $200 because that's all they pay upfront. Of course in the cellphone market the subsidies are almost always forced so that's a bit different than when they are optional.

 

[Miles Quaritch]

Right, we know there are 46 million Live accounts, and MS has said before something like half of Live accounts are gold so we can guess it's somewhere like 20-30 million Gold subscribers. But MS very pointedly does not give out the exact number, nor do they say explicitly how much revenue Gold subscriptions bring in each year.

I think it's possible Sony will use the anniversary of the IGC's introduction this E3 to tell us how many members the service has. My guess would be somewhere in the 6-10 million range. At $50 a year per person that's actually a nice chunk of change. Spend about half on content deals for the service and keep the rest as profit!

And 20-30m paying nearly $60 is a much more nice chunk of change. I'm not sure why you seemingly disregard the revenue gold brings in because MS haven't said how much they make from the service, but are more than happy to play up the revenue plus brings in for Sony.

 

[Brad Grenz]

I didn't disregard anything. Gold is a firehose of free money for MS, well over a Billion a year. They are literally charging people for the right to host their own games. The overhead is miniscule compared to the intake.

But that doesn't mean Sony will emulate that model. I think Gold is borderline unethical. Sony may agree and prefer to make money on a service that adds value rather that artificially punishing non-member users with an arbitrary pay wall. My point was PS Plus as it is can be highly profitable for Sony without stooping to holding basic internet features hostage.

 

[shinra-bansho]

Gold is a gold mine. But if Sony puts up a paywall against online function they lose a strong USP. I don't know if it would be worth the additional revenue when they can just charge for added-value services, which would probably sell well to early adopters.

I also don't understand how exactly it would work across their devices. They would charge for online on the PS4, but not on the PS3, in which case they would essentially lose a USP against their own prior product.

Or are people implying they'd start charging on the PS3 as well?

 

[Nachtmaer]

Gold is a gold mine. But if Sony puts up a paywall against online function they lose a strong USP.

It's obvious that Sony would to like have the money MS gets from their subscriptions but it would be wise to keep the free online with PS+ as a nice addition as a big selling point. I wouldn't be surprised if they go this route again.

 

[Family Fry]

Is everyone forgetting what Yoshida said when they were asked if online play was staying free?

"We totally believe that we want to provide more functionality and more services and more content on the network. And so we are looking at how we are going to structure that. And we are not ready to talk about that.”

Seems like they want to start charging but want to add some value to it other than locking down online play.

http://www.thesixthaxis.com/2013/02...owned-the-last-guardian-and-free-online-play/

 

[Petrae]

Gold is a gold mine. But if Sony puts up a paywall against online function they lose a strong USP. I don't know if it would be worth the additional revenue when they can just charge for added-value services, which would probably sell well to early adopters.

I also don't understand how exactly it would work across their devices. They would charge for online on the PS4, but not on the PS3, in which case they would essentially lose a USP against their own prior product.

Or are people implying they'd start charging on the PS3 as well?

If so, that's a shame for Sony from a business perspective. The free online play (when maintenance isn't going on) wasn't a significant enough value in the last generation and arguably cost Sony millions in revenue here in the US, plus the PS3 will have finished dead last in console hardware sales here.

The Xbox LIVE Gold model proves that consumers are willing to pay to play online, even if those consumers aren't people on Internet message boards. If Sony was to do the same this gen and charge for online (which, to your argument, might be tough to do), I don't see any kind of mass exodus. Where are those people going to go? Wii U? Not likely. PC? That's possible. Xbox? Same situation applies over there.

Paying to play online has become an accepted expense in today's console video game economy. We may not like it here-- I no longer buy ANY subscriptions, PS+ or XBL Gold-- but we aren't the majority. At least not right now. As the console sector contraction continues, though, that may change in the months and years to come.

 

[Brad Grenz]

2/3rds of 360 users don't pay for Gold. No one on PC, PS3 or Wii/WiiU pays for basic multiplayer and voice chat either. If anything, the number of people willing to pay for online is a very small fraction of the total market. Not that 20 million suckers can't provide a huge, reliable revenue stream, but it's silly to pretend they represent the "majority" opinion in a market that exceeds 200 million installed.

 

[Kyoufu]

Is everyone forgetting what Yoshida said when they were asked if online play was staying free?

"We totally believe that we want to provide more functionality and more services and more content on the network. And so we are looking at how we are going to structure that. And we are not ready to talk about that.”

Seems like they want to start charging but want to add some value to it other than locking down online play.

He doesn't say they want to charge for online multiplayer. He says they want to add services that consumers will find value in. PS+ is one. Gaikai must be another.

 

[XenodudeX]

What are the chances that you'll have to pay a monthly fee for xbox live gold along with the 2 year fee for the subsidized version?

 

[Petrae]

What are the chances that you'll have to pay a monthly fee for xbox live gold along with the 2 year fee for the subsidized version?

Depends on whether or not XBL Gold has a tiered program for extra features or not, and whether subsidy consumers want to be in those higher tiers.

 

[Family Fry]

He doesn't say they want to charge for online multiplayer. He says they want to add services that consumers will find value in. PS+ is one. Gaikai must be another.

The question was.

Will online play remain free?

The above was his reply.

 

[Angelus Errare]

Logically it's a great idea and plays to the average consumer's lack of research or care. Honestly MS could probably get away with $19 a month if they really wanted.

 

[Kyoufu]

The question was.

Will online play remain free?

The above was his reply.

He's not allowed to give details like that. Can't talk about region-free yet either.

 

[Family Fry]

He's not allowed to give details like that. Can't talk about region-free yet either.

Well I was just highlighting what he said when asked about free online play.

He of course gave the corporate answer, which is to be expected since they haven't talked about that aspect of PS4 yet.

Just it's something that could happen and I would see Sony maybe taking a different approach with it, like they did PS+.

Then again the uptake of PS+ may force MS to re-evaluate their own online subscription.

 

[GavinGT]

That's a different (though similar) issue. The point is using contracts to subsidize hides the true cost and can really mess with the expectations of consumers in the market - just look at the cell phone market in the US and Canada. People think the latest and greatest phones "cost" $200 because that's all they pay upfront. Of course in the cellphone market the subsidies are almost always forced so that's a bit different than when they are optional.

But companies try their best to distort the true price of their products all the time. It just seems weird to call them out for this particular practice.

 

[Kyoufu]

Well I was just highlighting what he said when asked about free online play.

He of course gave the corporate answer, which is to be expected since they haven't talked about that aspect of PS4 yet.

Just it's something that could happen and I would see Sony maybe taking a different approach with it, like they did PS+.

Then again the uptake of PS+ may force MS to re-evaluate their own online subscription.

Well, there is always the possibility of it being region-locked and/or online play being put behind a paywall.

Thinking about it logically, I don't think it'd make any sense to charge for online play when PS3 and Vita do not. Whilst the PS3 may be old enough where they can abandon its philosophies, the Vita itself is relatively new and since it's a companion to the PS4 with many functions it would not make sense for one to charge and the other to be free.

What I think is more probable is it being region-locked, but I'm crossing my fingers it's not.

As for Nextbox, I fully expect MS to continue charging for online play but this time with added value of maybe Netflix subscription being included and/or TV stuff. Maybe even free games à la PS+. I don't see Xbox Live Gold standing still. They'd get too much backlash IMO.

 

[statham]

Is everyone forgetting what Yoshida said when they were asked if online play was staying free?

"We totally believe that we want to provide more functionality and more services and more content on the network. And so we are looking at how we are going to structure that. And we are not ready to talk about that.”

Seems like they want to start charging but want to add some value to it other than locking down online play.

His answer was dodgy. They wanted to make sure everything coming out of the event a controlled positive reaction. Even on used games we got mixed responses.

 

[Bluekaveli]

People aren't smart enough to figure this out. This thing would still sell BOATLOADS at even this ridiculous price. Sometimes I hare living on this planet.

You rabbit living on this planet?

That's strange but whatever.

another pastebin...well just something new to read

http://pastebin.com/CiKCVeiA

"Hi, I am a developer at a big studio (we are currently working on titles for the next generation of consoles) and I want to give you all an update about the current situation regarding the Xbox. I obviously can't tell you who I exactly am and where I work, and I have to be a little careful about what I say, because I fear some of the documentation and even the hardware our studio has received, contains individual values and terms which can be traced back to my studio in case of leaks, which would be very unpleasant for us.

I think at some time in the second half of 2012 Microsoft must have realised that their vision of a console powered by an APU with 1.23 TFLOPS graphics processing power will have a hard time competing with the PS4. It also became seemingly clear at that time, that Sony could quite easily upgrade the RAM in their new console, due to new chips being available with higher capacities. Although I guess they didn't *know* that Sony would really go with 8 GB at that time, they knew it was a possibility. The problem was, they were running out of time. Their old design was not very flexible, so they had to come up with something new.

So they completely scrapped the APU approach, and basically rebuilt the whole architecture from scratch with even more off-the-shelf parts. The current kits we have received a while ago have a discrete CPU and a discrete GPU. The CPU is still x86, has 8 cores and has still relatively low clocks, but it's not Jaguar as far as I am aware. I guess they did choose a CPU with a slightly bigger die now, because size isn't as important anymore as it was on the APU, but I don't know exactly because the cases are sealed and I can't take a look inside. The GPU is also new, and it is not GCN1, at least that's what I heard from our programmers. More about the GPU further down. There was also a big change regarding memory architecture: It is no longer a unified memory solution. There are now two memory pools: One with 8 GB DDR3 RAM (34 GB/s, 4 GB available for games), and one with 6 GB GDDR5 RAM (192 GB/s, all available for games). eSRAM is GONE! Technically the devkit has 16 GB DDR3 RAM, but the Xbox will ship with 8GB DDR3 (and 6GB GDDR5). The downside of going with a discrete CPU/GPU is loosing some of the APU synergy effects, but I guess it's not too bad and it was the only way to update the specs, because designing a new custom chip was certainly not possible in that time frame.

There is currently some confusion about clock speeds and processing power, I cannot give you exact numbers, because they are... a little bit odd right now, and as I wrote above I suspect it's a way of tracking leaks. When we received the kits, we where a bit suprised because they had the same cases as the old ones, which seems strange because a discrete CPU/GPU with split RAM obviously needs a little bit more space / cooling. And they where loud. Really loud. Shortly after we received the kits we got an update which reduced clock values slightly, because some devs have reported problems with heat. As it stands now, the GPU has ~2.3 TFLOPS (it was ~2.7 when we received the kits - again, sorry for not giving you the *exact* number). I have no idea if this is the final number or if they will work on a better cooling solution or something like that. It probably could even go further down, I don't know, so don't be too excited - our games are currently built with lower specs in mind. A personal theory of mine is that they postponed the reveal to work on an updated case, which is better suited for the updated specs.

Kinect has received some updates, but we only have implemented a few voice commands for our game. Not sure if they will include Kinect with every console. Would make sense so that more games use this, but in the end it's Microsoft's decision. Our dev kits are currently "always-on", meaning they need a internet connection to start and all, but I am not sure if this will carry over to the final Xbox, I guess it's just a way for Microsoft to track dev kits right now. Our game doesn't need to be always-on. Which doesn't mean it won't be there on a OS level, I just don't know. I also have no idea how Microsoft will price this thing, I guess $500, as rumored, makes sense somehow. I don't have much insight into their internal strategies. I hope I could give you a nice sneak peak at the reveal, our game will also be there, too, and it's a secret title, very excited!"

These people have too much time on their hands lol

 

[fi3rypho3nix]

I can afford to buy all the consoles outright. That said if these prices remain true, which I doubt, I may buy the subsidized model.

Why? Because, the subsidized model will require a warranty that matches the terms of the agreement. Depending on the price of warranties on the standard model, you could actually save money. $40 over on the subsidized model may be cheaper than buying the warranty outright.

Food for thought.

 

[C4Lukins]

I really enjoy the posts in this thread that state something along the lines of "I am now not going to buy the new XBOX because they are offering a purchase plan that will cost me more in the long run, but will have an initial lower price." As if you were fooling anyone and this decision was the one that fucked it up for you.

 

[Iced_Eagle]

What are the chances that you'll have to pay a monthly fee for xbox live gold along with the 2 year fee for the subsidized version?

Based on what Thurrott said, it will be one subscription for both your console and live.

 

[Satchel]

That won't work. I really think there would be massive outrage if Sony started charging, enough to derail the console.

I seriously doubt that. Especially now given Sony already has people paying for plus. People already paying for plus won't know the difference.

The others would either not play online, or just pay because the competition is charging anyway.

 

[Louis Cyphre]

Why would a subsidized product be the same price in the end of a non-subsidized product? It's like most things, personal loans, leasing a vehicle, cellphone contracts.

$15 a month x 24 = 360

If the system is normally $500 that's only $160 more in the end and you will also get 2 years of Xbox Live Gold which is $60 per year. This is an issue? It's actually a smart strategy, you get a lower price point at first and you also get owners to get used to monthly fees for when Live expires. Of course the real issue is Microsoft trying to convince gamers they should keep paying Live fees because this looks to confirm they will continue to do just that. It also looks like there will be multiple pricing strategies for Xbox Live Gold. One that may include TV channels.

 

[shinra-bansho]

If so, that's a shame for Sony from a business perspective. The free online play (when maintenance isn't going on) wasn't a significant enough value in the last generation and arguably cost Sony millions in revenue here in the US, plus the PS3 will have finished dead last in console hardware sales here.

The Xbox LIVE Gold model proves that consumers are willing to pay to play online, even if those consumers aren't people on Internet message boards. If Sony was to do the same this gen and charge for online (which, to your argument, might be tough to do), I don't see any kind of mass exodus. Where are those people going to go? Wii U? Not likely. PC? That's possible. Xbox? Same situation applies over there.

Paying to play online has become an accepted expense in today's console video game economy. We may not like it here-- I no longer buy ANY subscriptions, PS+ or XBL Gold-- but we aren't the majority. At least not right now. As the console sector contraction continues, though, that may change in the months and years to come.

I think it's difficult to discern how much free online play added to the value proposition of a PS3 over an XBOX 360.

In the US for the majority of the generation the 360 could be had for a much cheaper entry. It also had a year to build up a base that would help drive a bandwagon effect, wherein even when price parity or similarity occurred people would buy the system (and subscription) that their friends already had to play with them. There's no point in getting the system with free online when you'd have no friends to play with on that ecosystem.

Outside of a US, I think it may have served well in continental European territories. I suppose it could have just been the residual effect of the PlayStation brand, but essentially since launch, despite the higher price and "no games" the system has consistently sold better - I think the selling point of free online vs an (US- and Anglo-centric) paid online was useful.

I don't know if it would lead to a mass exodus per se, but I don't think you'd really get a huge number of subcribers that would make it worth the loss of the selling point and goodwill it brings.

 

[Mandoric]

Why would a subsidized product be the same price in the end of a non-subsidized product? It's like most things, personal loans, leasing a vehicle, cellphone contracts.

$15 a month x 24 = 360

If the system is normally $500 that's only $160 more in the end and you will also get 2 years of Xbox Live Gold which is $60 per year. This is an issue? It's actually a smart strategy, you get a lower price point at first and you also get owners to get used to monthly fees for when Live expires. Of course the real issue is Microsoft trying to convince gamers they should keep paying Live fees because this looks to confirm they will continue to do just that. It also looks like there will be multiple pricing strategies for Xbox Live Gold. One that may include TV channels.

Lots of short-term personal loans to boost sales -are- "free" (0% interest and no fees.) The mobile service industry is an outlier, and even then it's built around the idea that everyone pays $30-$40/mo over cost of a monthly plan and you're just a damnfool if you don't call up every two years and demand that that money goes toward a new iPhone.

 

[alstein]

I really enjoy the posts in this thread that state something along the lines of "I am now not going to buy the new XBOX because they are offering a purchase plan that will cost me more in the long run, but will have an initial lower price." As if you were fooling anyone and this decision was the one that fucked it up for you.

It makes sense if you like paying the junk fee. It means a $200 cheaper console, and one they'll replace during the contract if it goes bad.

I do think that Sony's decision on PS4 charging for online play will have a huge impact on how things go. I just don't think they'll be able to do it without losing a decent number of folks. How much does Sony/Microsoft get from someone buying a disc game this gen?

 

[Moneyhats2k5]

It makes sense if you like paying the junk fee. It means a $200 cheaper console, and one they'll replace during the contract if it goes bad.

I do think that Sony's decision on PS4 charging for online play will have a huge impact on how things go. I just don't think they'll be able to do it without losing a decent number of folks. How much does Sony/Microsoft get from someone buying a disc game this gen?

I remember in the PS1 era it was $10.

I looked up an old forbes article:

Console Owner Fee: 11.5% (about $7)
This is why Sony, Microsoft and Nintendo are laboring so mightily to make their machines to success: Each gamemaker that wants to roll out a new title has to fork over a fee for each unit sold. This may vary per console maker--some publishers say creating games for the PlayStation 3 is more expensive because of fees Sony charges to use its Blu-Ray DVD standard. "But that number can get smaller depending on the publisher's status," says Peer Schneider, vice president of content publishing at IGN, News Corp.'s gaming portal. "The fee can be waived for exclusivity to a platform--that will buy you a kickback."

This was for Gears 1, it's probably closer to 15% for non exclusive games

 

[jcm]

I can afford to buy all the consoles outright. That said if these prices remain true, which I doubt, I may buy the subsidized model.

Why? Because, the subsidized model will require a warranty that matches the terms of the agreement. Depending on the price of warranties on the standard model, you could actually save money. $40 over on the subsidized model may be cheaper than buying the warranty outright.

Food for thought.

My credit card doubles the warranty for me. So assuming they offer a standard 1 year warranty then it's still a bad deal, if you have the money to buy it outright.