Support NeoGAF

[LeftThumbstick]

And do you think they need 1 billion per year to cover the operating expenses of the gaming division (cloud cost + first-party game dev + 3rd party GP deals)? "What school did you go to lmao"

No, you tool of a person. They made at least 16 billion last year in revenue across the whole of Xbox.

Gamepass is a small piece of the pie, and they clearly make the money up elsewhere through hardware sales, actual game sales, DLC and probably a good portion comes from the share they make on 3rd party game sales too.

That said though, regardless of how much Xbox makes for Microsoft, it doesn’t even matter because MS themselves can afford to bankroll whatever they want to do. They can make consoles at a loss, fund first party IP and buy 3rd party exclusives if they want to. They just acquired two publishers at a cost 6x more than their yearly revenue.

They’ve only been doing it for 20 years now and 4 generations later. They’ll be around for more too so you can stay being salty about that.

 

[Tiago Rodrigues]

The irony is that if you asked an 8 year old Japanese kid what he prefers, he likely wouldn't know what a Playstation is. That's how dominant the Switch has been in the past couple years.

Does PlayStation even target that audience? Can't think of a single game that could interest an 8 year old. Fortnite maybe?

 

[PropellerEar]

I know that you don't see the irony, but I do, so it's funny to me.

See what you see..
you assume, but know shit-all.

 

[Big Baller]

If so, where is their Halo killer

 

[K2D]

MS doesn't lose money on Gamepass. The CEO of Microsoft gaming said that Gamepass is "already sustainable".

We don't know what mental gymnastics he did when making that claim. He might be taking into account projected numbers.

 

[PropellerEar]

If so, where is their Halo killer

Can't kill what's already dead.

 

[assurdum]

But the article clearly mentions they’re #2, behind Tencent.

 

[Tiago Rodrigues]

MS doesn't lose money on Gamepass. The CEO of Microsoft gaming said that Gamepass is "already sustainable".

He said "sustainable" and not "profitable" for a reason. Sustainable could be a lot of things.

 

[ACESHIGH]

Well... you know what they say about a jack of all trades.

I just don't see how investing money on movies and TV series can be a wise choice. Game movies have been around forever and we're mediocre at best (Mario bros, tomb raider, assassin's Creed, doom, far cry, hitman ,final fantasy) not sure why this time it will be any different.

 

[Bernd Lauert]

He said "sustainable" and not "profitable" for a reason. Sustainable could be a lot of things.

He said sustainable because it's likely not profitable, since they're re-investing all the money they make off it.

 

[mejin]

I know that you don't see the irony, but I do, so it's funny to me.

Grubb is one the biggest X-boy out there. No doubt it's fun to see him make a piece like that and I bet this article annoyed more his fans than sony fans lol

It is better to have loved and lost than never to have loved at all.

Yep and you can't love with money. That's a big problem.

PlayStation is like Nintendo now, you can’t kill Nintendo.

They work with 20 million selling games these days, and as their PC market grows they will start working with 30 million selling games.

People also forget Sony doesn’t put their mobile market in PlayStation financials.

Their push for more live service games isn’t a shift in strategy either, they are simply adding.

If they can get a compelling service in Spartacus that focus on indies and starts adding major releases say 12 to 24 months after their launch, that’s another ace in the hole.

They will be fine. Still think they should buy Capcom/SE

Yep. People don't understand this is not a situation of start first, but start better.

He said sustainable because it's likely not profitable, since they're re-investing all the money they make off it.

to reinvest you need profits lol

 

[yurinka]

I forgot that I could look at the FGO and Sony Music's gaming numbers, but FY20 was 1.3bn and currently in FY21, its around 786m. Down YOY around 16.7%.

I don't know the current currency conversion, but as I remember it did over $1B in the natural year 2021.

Btw, last month they acquired the gamedev studio behind the game. I always felt they have a weird organization, I don't understand why don't they they put all their cinema/tv/animation businesses under Sony Pictures, all their gaming businesses under SIE, all their music busineses under Sony Music etc. They could do it while keeping using their different brands.

 

[yurinka]

If so, where is their Halo killer

They have Bungie, a studio of former Bungie and Apex Legends or a studio of former CoD BO, plus at least Guerrilla with the Rainbow Six Siege director that I'd bet may be working on something like that.

But more than targeting Halo, I think they are targeting something more currently relevant, like Fortnite, Destiny, CoD, GTA Online, hero shooters, battle royales, tactical shooters, etc. Probably a mixture of several of them iterating the concepts to try to go a step beyond, I assume that adding some narrative and social aspects.

 

[Bernd Lauert]

to reinvest you need profits lol

Wrong, you need revenue.

 

[PropellerEar]

He said sustainable because it's likely not profitable, since they're re-investing all the money they make off it.

 

[Bernd Lauert]

 

[reksveks]

I don't know the current currency conversion, but as I remember it did over $1B in the natural year 2021.

Oh yeah. It's still just above 1b for the calendar 2021: 1.033bn using the current currency conversion rate.

 

[reksveks]

to reinvest you need profits lol

Might want to tell Amazon that, historically went many years without great profit margins.

 

[Topher]

Surprised to see something so pro-Sony from Jeff Grubb, but not going to say anymore about that.

"Through nearly three decades of PlayStation, we haven’t seen Sony leverage this kind of synergy before. It is now because Sony Pictures, like the rest of Hollywood, wants to bet on familiar IP. The timing also makes sense because PlayStation is now Sony’s obvious crown jewel. Everything else is now working to support that business."

Agree. People have been saying for quite a long time that Sony's heavily separated business segments are doing its IP a disservice particularly when it comes to movies/TV and games. Sony Pictures and SIE need more collaboration. Seems the movies/TV side is spinning up nicely with Uncharted and The Last of Us and although it isn't the most intriguing IP, the rumored Men In Black game would be a good start for Sony to bring something over from SP. Just sad that that it took Sony so longer to figure out these possibilities.

 

[Shmunter]

But it can’t do VRR!

 

[On Demand]

Jeff Grubb wrote this article.

So yeah.....

 

[Heisenberg007]

But can PlayStation tell me why she left?

 

[sircaw]

There is one thing that Sony can't do, that's produce enough ps5's sigh.

Other than that, "The right stuff"

 

[Swift_Star]

Finally an article that is not doom and gloom.

 

[Fess]

You were all about Nintendo in your last post, how much are you paying for Nintendo games per year?

No I was all about Nintendo+Playstation, very important, they’re both essential imo. Haven’t add up the yearly cost on Switch, maybe $200? But it’s the kids console so it’s a bit different. Personally I only played Metroid Dread last year, hopefully they have more games for core gamers coming this year.

 

[Belthazar]

What school did you go to lmao.

Even with the 25 million subs they have right now, they are making upwards of 150mil every month, assuming that most are paying the asking price of the subscription.

Over twelve months they are probably pulling in over a billion just on the subs alone, more than enough to fund first party game development.

That’s not even taking into account the people that don’t use GP and still purchase games at full retail price.

Well, a very successful game can make more than a million alone, and Sony has a few each year... so making that in a year is not very enticing. Also, people seem to forget they have to take into account the very high cost of picking third party content (having something like GTA V on the service alone must cost an absurd amount of money, which is why it's always coming and going from the service).

And not to mention that assuming the bulk of people subscribed paid the regular asking price is not reasonable, when Microsoft gives very generous deals very frequently (I mean, people were converting 3 years of gold for 3 years of GPU for $1 until very recently, so who knows how many of those 25 million subs are part of that and will cancel when those 3 years expire). Those deals are always very well advertised too, being the first thing anyone willing to sign up for the service sees in their front page.

 

[Rudius]

I don't care about the movies and TV shows, what matters to me is that Sony is the only one out of the 3 investing in VR. Just by doing that they already got me to choose their platform.

 

[SEGA_2012]

IMHO the biggest strength of Playstation, historically speaking, is their third party exclusive line up, specially coming from JP Developers.

 

[Tiago Rodrigues]

Finally an article that is not doom and gloom.

The funny thing is ever since the Bethesda acquisition it has only been "doom and gloom" for Sony but it's only fake outrage from the media.
Every single metric and numbers from Sony doesn't show any signs of PlayStation slowing down.

Something just doesn't add up.

 

[Punished Miku]

For me, Playstation's strength is their exclusives. They're positioning themselves closer to Nintendo in that they will be seen as an exclusives box with must have games.

What the article is right about is that PS is going to be fine and we'll be looking at a 3 console future for as long as we have consoles. But I think the reason for that is their exclusives mostly, and that's it. TV is not a factor for me. Their sub services doesn't sound like it will be fully competitive with GP yet, but may be a nice way to play older games. That's it. Exclusives. Everything else is kind of a wash at this point, or they're slightly behind on.

 

[Papacheeks]

For me, Playstation's strength is their exclusives. They're positioning themselves closer to Nintendo in that they will be seen as an exclusives box with must have games.

What the article is right about is that PS is going to be fine and we'll be looking at a 3 console future for as long as we have consoles. But I think the reason for that is their exclusives mostly, and that's it. TV is not a factor for me. Their sub services doesn't sound like it will be fully competitive with GP yet, but may be a nice way to play older games. That's it. Exclusives. Everything else is kind of a wash at this point, or they're slightly behind on.

Behind or maybe they are not putting the cart before the horse. Past two years in TV/FILM they have exploded. They now own Crunchyroll and Funimation. No way home is the 3rd largest Movie in Domestic market in film history. They had a great 2021 with just off titles like Venom, Cobra Kai, Ghost busters.

Morbius is this year and so is Sequel to Into the Spiderverse which will do gang busters.

If uncharted does ok at box office it signifies that they can take their Playstation brand beyond games with good financials. ALso recently they bought developer who makes Fate and grand order which has made like billions for them on mobile.

And when we talk about specifically strength in Playstation, VR is going to be big, their integration for Discord will be fully realized once Tournaments start getting used widespread.
And Sparticus sounds like they are being particular in what they are going to offer. ANd similar to how Disney+ and Netflix get compared content wise, disney+ has literally got as many subs as Netflix and its been out for like little over 2 years.

Content is king, and Sony as a entertainment entity has proven that they still are kings in this domain of entertainment either it be music/TV/FILM/GAMING.
It is Microsoft who is playing catch up hence spending 70Billion for a publisher and fast tracking Halo series to paramount+ after initially they were suppose to do this last gen and canned their whole entertainment sector they created.

Sony has the heritage, Know how, and pedigree to make their brands reach beyond.

Word is still out on Microsoft in handling of IP's, studios and brands.

 

[Pedro Motta]

But can PlayStation tell me why she left?

They tell you every year with the Playstation wrap-up.

 

[Javthusiast]

 

[Punished Miku]

Behind or maybe they are not putting the cart before the horse. Past two years in TV/FILM they have exploded. They now own Crunchyroll and Funimation. No way home is the 3rd largest Movie in Domestic market in film history. They had a great 2021 with just off titles like Venom, Cobra Kai, Ghost busters.

Morbius is this year and so is Sequel to Into the Spiderverse which will do gang busters.

If uncharted does ok at box office it signifies that they can take their Playstation brand beyond games with good financials. ALso recently they bought developer who makes Fate and grand order which has made like billions for them on mobile.

And when we talk about specifically strength in Playstation, VR is going to be big, their integration for Discord will be fully realized once Tournaments start getting used widespread.
And Sparticus sounds like they are being particular in what they are going to offer. ANd similar to how Disney+ and Netflix get compared content wise, disney+ has literally got as many subs as Netflix and its been out for like little over 2 years.

Content is king, and Sony as a entertainment entity has proven that they still are kings in this domain of entertainment either it be music/TV/FILM/GAMING.
It is Microsoft who is playing catch up hence spending 70Billion for a publisher and fast tracking Halo series to paramount+ after initially they were suppose to do this last gen and canned their whole entertainment sector they created.

Sony has the heritage, Know how, and pedigree to make their brands reach beyond.

Word is still out on Microsoft in handling of IP's, studios and brands.

If you're into TV and movies, then that makes sense. Lots of people are. For me it's not a factor honestly. I haven't even seen the Spider Man movies, and that's probably the best thing Sony has going by far.

PSVR will be cool for sure. Forgot about that. But I'm waiting to hear the price point, game line-up, and supply issues. I have a Quest 2 and VR is awesome, so I'm sure people will love it. But will it capture a significant portion of the market to be a real player? Hopefully. Guess we'll see. If it sells 5 million or less total, then it's still a pretty niche device. But I think hunger for VR is growing compared to last gen, so I expect it to do well.

Spartacus could do well? I just need to see what the hell it even is. I can't imagine it will ever have their first party games on it for years and years when black Friday deals for a 1 year old game is $50 at retail.

Other than that, the two boxes are basically the same and it comes down to services and exclusives. The boxes have basically been almost irrelevant for two gens now, and it's just down to exclusives. All 3 players now have enough exclusives to remain competitive, so we'll be seeing all 3 for quite some time. On services, I'm giving the edge to MS right now, and on pricing. The two systems are largely the same for me, but I give Sony the edge on having a better controller. All that even matters after that is exclusives.

 

[yurinka]

Regarding Sony's movies using gaming IP for synergies, we also have to remember that in addition to make the Sony game IP ones, they also have related movies like Metal Gear Solid, Resident Evil, Monster Hunter, Ratchet & Clank, Final Fantasy, Spider-Man or Venom. Their catalog soon will be pretty huge.

If they make a Netflix-like service merging there their anime subs plus all their cinema & tv stuff, specially these kind of related PlayStation content (+things that may fit like Ghostbusters, Bad Boys, Cobra Kai...) they could be so successful inside (and outside) PS with that too.

Spartacus could do well? I just need to see what the hell it even is. I can't imagine it will ever have their first party games on it for years and years when black Friday deals for a 1 year old game is $50 at retail.

Even if it would be to rework of PS Now bundling it with PS Plus and rebranding it to call it PS Plus Cloud or something like thtat it would mean that it start with the ~50M subs PS Plus already has. We know that soonish they'll add PS5 games to PS Now and that will release it on smartphones, tablets and smart tvs.

If they also really add a PS Now tier with only the downloadable games part, making it available worldwide unlike with the cloud tier (same as GP), and if they really push the catalog adding more games from all gens as Bloomber said, then it would help it grow.

This generation they released over half a dozen 15/20M sellers and they have almost 50M subs, so don't expect to see their big games day one or soon after release on a game sub. I think they'll contitnue adding their games to PS Plus/Plus Collection/PS Now prettty likely at the same time they did until now, but maybe they do it in a more permanent way and with more games to grow and solidify the catalog.

 

[FrankWza]

He said sustainable because it's likely not profitable, since they're re-investing all the money they make off it.

 

[Godot25]

Good counterpoint. My question is, "what is the sweet spot subscribers wise before it becomes the behemoth Microsoft is betting on". We already have many that subscribe to Gamespass boast about not having paid for a retail Xbox game in years. Even Microsoft will want major profits from Xbox eventually.

Well. If you have 60 million GP subscribers at 10$ per month (some people pay more for Ultimate, some people less) you have 600 million dollars per month and 7,2 billion per year. That's literally 3 AAA developed per month. Of course, there are other expenses as your first-party stuff, but on the other hand, gaming subscription is not like Netflix, where subs are your only revenue stream. You still have microtransactions, season passes, DLC's and people are still buying games (may I remind, that more then 4 million players bought Ultimate version of Forza Horizon 5 despite fact that game was on Game Pass?)

So I think that 60 million is more then enough.

 

[Godot25]

We don't know what mental gymnastics he did when making that claim. He might be taking into account projected numbers.

Jim Ryan: "It does not make any financial sense to put our games into subscription day one"
GAFers: Yeah, he is telling truth
Spencer: "Game Pass is already sustainable"
GAFers: HE IS LYING!

It's funny, because you can't verify both of those statements. But GAF somehow believe that Ryan is telling truth, but Spencer is not...
Wonder why...

 

[Tiago Rodrigues]

Behind or maybe they are not putting the cart before the horse. Past two years in TV/FILM they have exploded. They now own Crunchyroll and Funimation. No way home is the 3rd largest Movie in Domestic market in film history. They had a great 2021 with just off titles like Venom, Cobra Kai, Ghost busters.

Morbius is this year and so is Sequel to Into the Spiderverse which will do gang busters.

If uncharted does ok at box office it signifies that they can take their Playstation brand beyond games with good financials.

Yeah...did something change at Sony Pictures? They have come such a long way since 10 years ago. Even movies that critics try to trash, they not only succeed but get sequels.
People complaining and laughing at Uncharted's Rotten Tomatoes should look at Venom. It got a 30% in there...got a sequel that's at 58% in there and outgrossed all MCU movies last year besides Spider-Man...another Sony movie.

in 2020 Sony had 2 of the 3 biggest movies of the year at the cinemas, they got #1 for last year and this year already looks promising.

They weren't doing this good just a few years ago.

 

[Thirty7ven]

What school did you go to lmao.

Even with the 25 million subs they have right now, they are making upwards of 150mil every month, assuming that most are paying the asking price of the subscription.

Over twelve months they are probably pulling in over a billion just on the subs alone, more than enough to fund first party game development.

That’s not even taking into account the people that don’t use GP and still purchase games at full retail price.

Yo I hear that if just create a subscription and set a price, people start pouring in and devs start giving you their games, free money yo

 

[Swift_Star]

Yo I hear that if just create a subscription and set a price, people start pouring in and devs start giving you their games, free money yo

I don’t understand why people never factor in the cost of maintaining GP. Do people really believe it’s cheap to keep big AAA games in GP?

 

[CrimsonSquall]

He also didn't say it was "profitable" right now either. Anyways, its only a matter of time before it becomes a major revenue provider for Microsoft.

You don't invest close to 100 billion dollars in content, without knowing if a market is going to be sustainable or not. Microsoft knows how to make money.

Microsoft knows how to spend money

 

[lastmessiah]

I think it's important to understand that the quality of PlayStation Studios game is because they rely on retail sales and don't give away their games on a subscription service.

Err, no. They rely on online services revenue from titles like CoD and FIFA.

 

[kingfey]

I was about to post this one, then I saw his Twitter post.
I don't know, whether he is genuine or trolling.

Genie Park tweet made me question his article.

 

[kingfey]

He also didn't say it was "profitable" right now either. Anyways, its only a matter of time before it becomes a major revenue provider for Microsoft.

You don't invest close to 100 billion dollars in content, without knowing if a market is going to be sustainable or not. Microsoft knows how to make money.

Its on growth period of time.
Profits would come, when the subscribers number is higher. Around 50m, we should see some profits for them.

Right now, it's all about securing contents, and getting a head of everyone. Netflix managed to hit the market that way, and everyone knows the name of Netflix, unlike Hulu or Disney plus.

 

[kingfey]

I think it's important to understand that the quality of PlayStation Studios game is because they rely on retail sales and don't give away their games on a subscription service. Who knows if they'll be able to maintain the same quality that we're all praising (and what you think is the reason PlayStation is a must-have console) if they start putting their games day one on a $10 subscription service?

I can bet that the quality will suffer.:

• PS Studios will get lower budget for development
• More games will be half-baked and less ambitious and less detailed
• Even important features will roll out over a period of months and get more money per subscriber per game (to keep subscribers, ala Halo Infinite Forge and Co-Op launch)
• Games will be more buggy which will be patched over months
• Games will be more of live-service type
• Fewer single-player games
• Most importantly, the focus will shift on quantity instead of quality because they would want to keep the content pipeline full. Sony could delay Horizon Forbidden West because it wasn't ready in Fall 2021 and then release it 2 weeks before Gran Turismo. A subscription service model doesn't allow that.

What I'm saying is that yes, a subscription service might sound amazing and more cost-effective at least in the short-term, but it's near-sightedness to imagine that it comes without any cost or baggage. It does. The only thing remains is whether you're okay with that cost or not.

I'm not. I want Sony to continue making these $200 million blockbuster games that no one else does.

You are acting as if subscription service is 1 time payment.

Subscription service guarantees you monthly payments. In 4 years, at $2b revenue a year, you are netting $8b just from subscriptions. And that money, can fund alot of projects.

Sales are risky, because 1 bad project, and your money is in the drain. You are setting $60 price tag. If 20m bought that, that is $1.2b.
If Sony has 20m ps+ ultimate at $15. They can get $300m a month, or $3.6b a year. You gain 60m sales of that $60 copy sale, in just 1 year. That is the power of subscription. In just 4 years time, that is $14.4b. That is alot of funding for their studio's.

With talented studios at Sony disposable, they can make alot of higher quality games with that money.


Edit: That money can also give their studio's manpower to fix the game.

 

[yurinka]

Exclusive game Output wise, MS will be putting more Exclusives out for the Xbox than Sony can physically do with their studios.

I highly doubt it. Sony has a way bigger output of exclusives, as an example this H1 they have Uncharted Legacy of Thieves Collection, GoW PC, Sifu, Horizon 2, GT7, Ghostwire Tokyo, Stray, Forspoken and some more I may foget.

Regarding MS acquisitions, so far everything they published since acquired is on PS too, they said their strategy for Bethesda is 'first or better' on their platforms and that they want to keep on PS CoD and the other big ABK IPs. We'll have to see what games of these studios are multi, which timed exclusives and which full console exclusives.

In addition to this, we also have to remember that Sony is highly growing all their internal development studios, are also making acquisitions plus signing many 2nd party an 3rd party exclusive deals.

You are acting as if subscription service is 1 time payment.

Subscription service guarantees you monthly payments. In 4 years, at $2b revenue a year, you are netting $8b just from subscriptions. And that money, can fund alot of projects.

Sales are risky, because 1 bad project, and your money is in the drain. You are setting $60 price tag. If 20m bought that, that is $1.2b.
If Sony has 20m ps+ ultimate at $15. They can get $300m a month, or $3.6b a year. You gain 60m sales of that $60 copy sale, in just 1 year. That is the power of subscription. In just 4 years time, that is $14.4b. That is alot of funding for their studio's.

With talented studios at Sony disposable, they can make alot of higher quality games with that money.


Edit: That money can also give their studio's manpower to fix the game.

Sony has many money from the game sales and many money (more than MS) from the subscriptions. In fact they make way more money from the games sold (the double not counting DLC).

This is better than to sacrify most game sales and have only the money from the subscriptions, because it's way more money.

Why they would want to lose the money of the sales? They don't need to give away their games to give attention or to grow their subscriptions, they are already very big (if their game subs make $0.9B/quarter, this almost $4B/year).

What school did you go to lmao.

Even with the 25 million subs they have right now, they are making upwards of 150mil every month, assuming that most are paying the asking price of the subscription.

Over twelve months they are probably pulling in over a billion just on the subs alone, more than enough to fund first party game development.

That’s not even taking into account the people that don’t use GP and still purchase games at full retail price.

See above, Sony makes almost a Billion per quarter, not per year, from their game subs.

 

[LiquidMetal14]

Well yes. No argument here.

 

[Banjo64]

I highly doubt it. Sony has a way bigger output of exclusives, as an example this H1 they have Uncharted Legacy of Thieves Collection, GoW PC, Sifu, Horizon 2, GT7, Ghostwire Tokyo, Stray, Forspoken and some more I may foget.

Regarding MS acquisitions, so far everything they published since acquired is on PS too, they said their strategy for Bethesda is 'first or better' on their platforms and that they want to keep on PS CoD and the other big ABK IPs. We'll have to see what games of these studios are multi, which timed exclusives and which full console exclusives.

In addition to this, we also have to remember that Sony is highly growing all their internal development studios, are also making acquisitions plus signing many 2nd party an 3rd party exclusive deals.

In bold, nothing to do with Sony’s output.

Underlined, old ports.

So 2 games.

 

[kingfey]

I highly doubt it. Sony has a way bigger output of exclusives, as an example this H1 they have Uncharted Legacy of Thieves Collection, GoW PC, Sifu, Horizon 2, GT7, Ghostwire Tokyo, Stray, Forspoken and some more I may foget.

Regarding MS acquisitions, so far everything they published since acquired is on PS too, they said their strategy for Bethesda is 'first or better' on their platforms and that they want to keep on PS CoD and the other big ABK IPs. We'll have to see what games of these studios are multi, which timed exclusives and which full console exclusives.

In addition to this, we also have to remember that Sony is highly growing all their internal development studios, are also making acquisitions plus signing many 2nd party an 3rd party exclusive deals.

MS has bigger output exclusives, which is announced already. Sony on other hand, is cooking something, and we have no idea what it is.

If you add activision to MS, their exclusive output rises alot.