![Talking Point: Was Sony Right to Resist Adding PS5 Exclusives to PS Plus on Day One? 1](https://cdn.statically.io/img/images.pushsquare.com/b1186f8cdba16/talking-point-was-sony-right-to-resist-adding-ps5-exclusives-to-ps-plus-on-day-one-1.900x.jpg)
One of the major plot points from the opening exchanges of this generation was Sony’s resistance to adding first-party PS5 titles to PS Plus on day one. Whatever your personal opinion of the strategy, the Japanese giant was heckled and harried by both media and fans, repeatedly accused of ripping off its consumers by not following in the footsteps of Xbox’s acclaimed Game Pass proposition.
Despite question marks over its profitability, Microsoft repeatedly assured journalists and consumers alike that the business model was sound, and wasn’t being propped up by its parent company’s obscene riches. This is despite it switching to a financial reporting strategy that obscured the true nature of its numbers, focusing on revenue rather than cold hard profits.
![Talking Point: Was Sony Right to Resist Adding PS5 Exclusives to PS Plus on Day One? 2](https://cdn.statically.io/img/images.pushsquare.com/eb7d6a4c7f197/talking-point-was-sony-right-to-resist-adding-ps5-exclusives-to-ps-plus-on-day-one-2.900x.jpg)
PlayStation, on the occasions it was asked, said that the strategy was simply not “sustainable” – a line it would go on to repeat multiple times. “We are not going to go down the road of putting new releases titles into a subscription model,” then boss Jim Ryan told Games Industry.biz. “These games cost many millions of dollars, well over $100 million, to develop. We just don't see that as sustainable.”
He was, of course, accused of being a profiteering liar – and it became another arrow in the quiver of Ryan’s biggest detractors, many of whom felt he was poor fit for leading PlayStation despite his unprecedented business success.
Sony did go on to reinvent its subscription offerings, combining PS Plus with PS Now to create a more compelling trio of tiers that included a wider selection of PS5 and PS4 games. And it would later experiment with adding smaller, day one titles to its offering, like Tchia, Humanity, and more recently Animal Well. While there are still question marks over the more expensive PS Plus Premium, the value of PS Plus Extra has largely been applauded.
![Talking Point: Was Sony Right to Resist Adding PS5 Exclusives to PS Plus on Day One? 3](https://cdn.statically.io/img/images.pushsquare.com/7be89aca0dd19/talking-point-was-sony-right-to-resist-adding-ps5-exclusives-to-ps-plus-on-day-one-3.900x.jpg)
Still, while the experiment has proven a success for PlayStation’s bottom line, allowing Sony to extract more revenue on average from each individual subscriber, the total number of PS Plus members has remained static overall – hovering just under the 50 million mark. Despite this, in the United States specifically, consumer spending on gaming subscriptions has hit a brick-wall, with year-over-year growth as low as one per cent during some months of the year.
That’s all culminated in some seismic changes to Microsoft’s business model overnight: including the introduction of a Game Pass tier which no longer features day one first-party releases. Effective from September, a new subscription named Game Pass Standard will remove the promise of day one games – despite still commanding a substantial $14.99 per month fee.
The Redmond firm is not doing away with the concept entirely, but those who want to play titles like Fable and Call of Duty: Black Ops 6 at launch will now have to cough up $19.99 per month to do so. PC Game Pass will retain the promise of day one games, although its price is also increasing from $9.99 to $11.99.
It means that, if you factor in the recently renamed Game Pass Core, there are now two subscription offerings from Microsoft which don’t fulfil its promise of “play it day one with Game Pass”. Of course, it’s true that all subscriptions – including Sony’s own PS Plus – have been increasing in price recently, but this is a tacit admission from Microsoft that the model hasn’t been working as well as it previously implied.
In fact, this sudden change retroactively suggests that Sony – and, yes, Jim Ryan – may have been right all along: the model isn’t sustainable after all. With games generally lasting longer and requiring a more active attention span than movies and music, the dream of a ‘Netflix for Games’ is fading fast.
Do you think Sony was right to resist adding its first-party games to PS Plus on day one? Do you still think this is a business model the platform holder should explore, or is Microsoft begin to show it’s not sustainable? Let us know in the comments section below.
Should Sony add its first-party games to PS Plus day one? (2,084 votes)
- Yes, a good deal is still a good deal
- Maybe, but it doesn't appear sustainable
- No, I prefer to own my games anyway
- I really don't know to be honest
Comments 163
I'd rather buy and re sell the games I want day one, I only use playstation plus Extra for games I wouldn't buy day one or games I want to play but haven't got round to buying them in a sale yet.
But for gamepass it was inevitable that prices were going to keep going up as with bigger budget games getting added it then becomes more and more unsustainable. How long before they remove EA Play from gamepass.
They've added "early access" editions for gamepass games to try and get more money, they've raised the price once already, they are putting their games onto Playstation consoles, and now they've increased the price of gamepass again. It's pretty obvious it's not working and Sony were smart not to follow their strategy.
It certainly is baffling, but this is the problem with subscriptions, you hit that wall and all you can do is extract more money.
Same with games. Only so many people you can sell to before you have to start getting money elsewhere.
And actually, there is one subscription that didnt go up in price (Yet!): NSO. All they did was add another tier. The base tier is still getting new games and a new system last year, nothing has been removed apart from Pac-Man 99 so Bandai could try their own version that bombed, and the price remains $20 a year.
Will the price go up? Yes. But the fact it hasn't yet is......baffling.
Yes. Simply because paying £1 (or I suppose in the region of £15 these days) means that for every brand new game that is worth £50 on there, you lose £35 or more. Granted, a month later they aren't brand new, but you get the point.
Sony is doing the right strategy. GamePass cannibalizes Xbox’s own sales and then they have to do things like bring up the prices and introduce new tiers.
For a service that’s “profitable”, seems odd to be raising their prices and introducing more ways to get money from their customers.
I personally would like the option pay more for ps+ premium and then day 1 games go on there.
gamepass ultimate, ubisoft+, EA play pro all offer day 1 games
I think a better strategy for Sony would be to offer discounts on brand new first party games for those on Extra/Premium tiers.
Extra tier subscribers get 15% off whilst Premium tier subscribers get 30% off, it's still an incentive to subscribe without cannibalizing sales.
Well, Jim was right at the end. He knew his stuff. Sony rose and MS fell, this paints it quite well. And yes, I want to own my games.
People investing in gamepass need to really think about the value at $20 a month. That is $240 a year. If Microsoft only release 3 first party titles a year, that would cost $210 if you were to buy them outright at an assumed cost of $70 (and that assumes you can't buy them cheaper at physical stores, and you want all 3).
Microsoft's output each year has never been fantastic so it's unlikely you would see many more than 3 first party games you would want to play so there is alot of reliance on third party deals to bolster the line up - which recently look to have been a little weaker as developers either move away from subscription, or ask for more money than Microsoft is willing to pay upfront.
I just don't think the model is sustainable and it will be interesting to see how this goes. I expect many will migrate to gamepass pc which is cheaper (without the paid online requirement too).
Either way, Sony was absolutely correct not to drop its day 1 titles into PS Plus. They cost too much too make and the company would soon be on its knees if it followed microsoft's example as Sony simply can't afford to prop playstation up in the same way
@Haruki_NLI of course Nintendo haven't put the NSO prices up, all their games are 20+ year old roms.
Nope, the lack of new games coming to the service caused me to lose interest. I wouldn’t sub to PS+ in any capacity if you didn’t need it for online play. I’m going to be unsubscribing (again) from Gamepass due to the price hike. I’ll resub on occasion to save money on Day 1 games. NSO, weirdly enough, is the only one that seems to be the right price for the value.
In my opinion, I think the streaming service, GaaS, perpetual income strategy is irrevocably damaging the industry and the executives refuse to see that, but such ignorance is already having consequences and I suspect the consequences will continue to grow.
Of course Game Pass was going to increase in price. Everything else in the world has. What baffles me is the way Microsoft have confused things by introducing the random tiers.
I have Game Pass Ultimate so the day one changes won't affect me personally.
Version of this question has been asked multiple times since PS Plus re-imagining, and every time I have voted against adding first party games day one.
Decent permanent discounts however, would be a great addition.
@Rob_230 For me, Game Pass has been more about finding games I would never have tried without the service. Plus if I like them, getting a 20% if I choose to buy.
Yes they were right. I've never believed this strategy has longterm sustainability. Either the consumer eventually gets priced out, or the quality drops because the subscription numbers can't support it.
Microsoft really backed themselves in to a corner with the day one promise, once you've set that stall out it's hard to walk it back. I'm sure they believed it would generate consistent growth but that hasn't been the case.
The two week early access to Starfield for a premium was the first sign this model wasn't performing well, the base tier no longer supporting day one only cements that for me.
Jim Ryan was picked apart by bias media and xbots for not doing day 1 games. Most knew it is not sustainable and you would lose the quality of the game by doing so. The problem with him is focus on live service and pushing away from importance of japan titles as western games are going down the drain in DEI more and more
I wouldn't even look at ps plus if it wasn't required for online play. My subscription expires on November and I'm tempted to buy my fighting games on steam and forget about it.
@Rob_230 if Microsoft only release 3 first party games a year sign up for a month play all three bargain. why sign up for a year
Nope.i prefer to add my own games.x box need it.playstation dont.people still is going to buy PlayStation games.word up son
@__jamiie Raising prices is one thing, but nerfing the primary tier to remove half the reason for using it while doing so is quite another.
Microsoft's attempts to push subscribers up are backfiring and I can't see see this helping. They rebranded Gold in order to count its subscribers as game Pass users and it barely moved the needle. It's been stagnant since then even though they actually have started adding enough first party games that it should be growing and it's not.
I suspect this has conveniently been done in advance of Call of Duty so that they see a spike in Ultimate subscribers.
@UltimateOtaku91 They'll never do it but I would happily take those discounts!
@Rmg0731 Jim Ryan could say that rain is wet and people would not believe him because of a predetermined bias based on misquotes and their own imaginings.
Case in point, people went crazy about him flying halfway across the world to "stop the merger", ignoring the fact that he lived in the uk for a week every month (and Japan one week, and the other two in the US)
I'm Ryan-neutral but the way people went on about him was frankly, absurd.
Raising prices to make more money seems to be standard practice for both Sony and Microsoft right now. As a consumer obviously you want companies to act in your best interests - unfortunately most companies are ruled by shareholder sentiment and therefore profits and returns will always rank highest in priority.
For me, someone that mostly plays single player games once to completion over the course of a month game pass ultimate still represents great value for day one releases. I’ll continue to sub for a month when there’s a new title I want to play - $20 vs $70 is a no-brainer for me.
Still waiting for Spider-Man 2 and the last of us part 1 to hit Sony’s subscription service. Microsoft have made $70 games far less appealing than they once were. I’ve had a ps5 for about 3 years the only games I’ve bought for it have been ff16 and ragnarock - everything else I’ve played through ps plus extra which I’ve had for about 3 months total.
@Neither_scene still waiting for Spiderman 1 and last of us 2 to be put back on the service
@trev666 That is a bargain, an unbelievable one, but therein lies the problem with this model. It's great for the consumer, not so great for the company trying to recoup years of development costs. Eventually it will also become your problem with price hikes and less investment in to potentially expensive new and existing ip.
lol, that’s a rhetorical question right? 🤣
Obviously Sony is right about GamePass isn't sustainable. But MS / Phil Spinner arrogancy thinks otherwise and look at them right now closer and closer to end their journey as a console maker and fully become 3rd party software for Sony and Nintendo.
And yes i much prefer to own my games physically.
Of course it would be dumb for Sony to add them day one, unless they charge £35/40 per month or something outrageous.
But, at least you can still stack on Xbox, I guess, and continue to get ridiculous value that MS (ownership) clearly hate and definitely want to phase out ASAP without alienating every single player, which is almost impossible, as like others have said, they painted themselves into a corner with the strategy from... day one
1000% Many of us said from the very beginning that adding AAA games day one was unsustainable. Personally I'm glad subscriptions aren't taking off like they hoped. MS were trying to change the consumer buying habits were no one buys games anymore I.E. not owning their games.
???
Ultimate with new price is 1€ per month more expensive then PS Plus Premium. While having first-party games there day one, which Premium don't have and EA Play included, which Premium don't have.
So I don't understand point of this article tbh.
What Microsoft is doing is not admitting that "it was wrong move" but basically creating "terrible" Game Pass Standard (which is equivalent of PS Plus Extra btw), so they can upsell you on Ultimate, since it's only 3€ per month more expensive than Standard. Because when you hit peak subscriber count (which they have on consoles), only way to increase your revenue is to upsell your customer to higher tier or to jack up the price.
Admission of "wrong strategy" would be removing day one first-party games from PC Game Pass and Game Pass Ultimate too...
@Intr1n5ic basically i dont care if multinational corporations make money. its not my job to make sure they can make millions in profit
The less subscriptions I have; the better!
The one exception is Humble Choice, which give me the monthly games as keys that I can use to add the game to my account, trade with other games, sell, or give away to friends. Plus a little cash to a good cause, of course.
#colinwasright. The dude knows his sheesh
I like owning games I know I'd want day one. Subscription services like gamepass and PS plus is good for games I never would have tried if it wasn't available for free with the service.
Let’s be honest.
Within 3 months Sony will raise prices.
Also Sony can’t afford to do.
@AdamNovice 100% this. MS tried to use the Edward Bernays playbook to convince everyone of the new reality. The "Normalise playing ten games at once" social media posts from Xbox a few years back were enough to make me feel burned out.
It could never last - sub services seem to need constant growth, but there are only so many people in the world.
For myself, if you want my money regularly you need to regularly sell me something that retains some kind of value when I'm done with it.
For the likes of Netflix, Prime and Disney, subbing a month or two each year usually gets me through everything that I really want to look at.
Cut back on the fomo stuff and there's really not that much there that I "must see".
It would be nice if Sony provided an optional subscription to have Day 1 releases.
If you prefer to own your games, then do so (Microsoft still provides that option, too, don't forget).
It's called consumer choice. Not exactly a bad thing, in my opinion.
@trev666 You should care about the bigger picture though because it's the teams that make the games you enjoy playing that will bear the brunt of it.
Forgive me if I am wrong, @get2sammyb, but where is it that Microsoft have said that Black Ops 6 will be on the Ultimate tier? Thus far, to my knowledge, all they have said is that some Day One games will be only available on Ultimate. I think it reasonable to assume that it will be on Ultimate only, but I cannot see anywhere where they said that this new policy would apply to BO6 specifically. Now, you may well be right that that is what happens, but have they outright said it just now?
Like I have said before just over 50% of game pass subs are on Xbox consoles.
That means the rest is across all other billions of devices.
So the console up take is good and all other devices is poor.
3 years ago I put on here. Sell a console where you biggest up take is you stand a very good chance of selling a game pass.
As of today Microsoft have done absolutely nothing to sell consoles, advertising wise etc and are totally outsold everywhere.
Microsoft when it comes to Xbox consoles and Xbox really seem to want it to die. All the evidence is there. They are taking Xbox brand down.
I've been subscribed to Ps Plus since near the beginning, and I have to say I think it's great. A lot of negativity online but I have such a huge backlog from it from games I would have bought otherwise. I think not adding day 1 games to it was the correct move and Sony are in a much healthier spot than Microsoft because if it.
@Fiendish-Beaver Standard tier doesn't include day one games, therefore it's fairly reasonable to assume Black Ops 6 won't be on Standard tier.
@UltimateOtaku91 I'm with you. If they want to incentivize people, give subscribers bonus discounts on new releases within, say, 30 days of launch or something.
I always contended, even back with old school PS+, that the true value wasn't in the free monthly games, but the extra discounts subscribers were privy to. I saved SO MUCH extra money on top of sale prices that I subbed and still purchased a ton of games every year. There wasn't a year that went by where savings on things I was already going to buy didn't pay for the sub.
I'd even settle for 10/20%, not even all the way up to 30. And I say that as someone who only has Extra. That 10% would be huge for me. Make it a flat 10/20% on ANY new release within the launch window, not just first party, and people would see the value increase a ton and subs would rocket. Plus digital purchases would rocket (even higher), locking more people into the ecosystem longer term, due to a broader personal library.
It would be huge for Sony AND customers.
No because its not profitable and will kill PlayStation.
Only Xbox cough Microsoft cough can fund such a thing with an unlimited bank account.
GamePass has never been profitable and never will be, its barely sustainable and only exists still because its a product of a broader business goal/mission.
If Sony did a lower tier of PS+ with only online play and save game backups ('cos they don't allow PS5 saves to go to a USB stick for some reason - $$$) then I'd sign up for that.
I'll be dropping to Essential in December as Extra (which I've had for about 18 months) and Premium, in my eyes, are not worth paying Sony over £100 for a year's game rental.
Sure, it was useful when you used to get PS3, PS4 and PS Vita games as part of the sub, but these days, a few questionable PS4 titles and a PS5 remake of a remake of a remaster and the whole 'free' games option seems a bit overpriced.
Money off a game or add-on for being a PS+ subscriber is something I've made use of but only if I can't obtain the same thing physically for an even lower price.
@GamingFan4Lyf It's not a bad thing unless you end up conditioning a market to expect everything for nothing. What follows is studios getting closed, even off the back of critically acclaimed releases, because a large part of the player base is no longer incentivised to directly support them.
That is not what Microsoft have said though, @get2sammyb. This is what they have said:
Some games available with Xbox Game Pass Ultimate on day one will not be immediately available with Xbox Game Pass Standard and may be added to the library at a future date.
Obviously, the key word there is some. Now, I agree that the likelihood is that BO6 will only be available on Ultimate to start with, but the article definitively says that it will, which, at this moment is not the case, and so is slightly misleading.
Just to be clear, I'm not trying to be awkward, just accurate...
Not to sound arrogant, but the adults in the room knew it was never going to be sustainable from day one.
100% Sony did the right thing keeping their games off their service day one! Microsoft only did it the way they have because they have the money to burn and they banked that they would attract way more people than they have doing this. Sure, games like COD will likely give them a big boost, but in general the games they have under their own umbrella really aren’t system seller quality anymore. Sony first party games are way better titles in general and Sony has done the right thing making money off them by selling them rather than renting them to gamers! If Sony had put their games on their own service day one, Sonys first party titles would not be of the quality that they are and that is a fact!
Removed - flaming/arguing
didnt sony increase the price of their service by 34% last year?
@tangyzesty I agree it wasn’t sustainable as it was and have argued the same for years. However I don’t think it’s quite as open and shut as that.
Microsoft’s model and maths was based around having 50+ million subscribers by now. If they had that I believe it could be sustainable.
But that highlights a problem with the subscription model, you can only offer lower rates if you can get a huge number of subs. If you can’t you either need to raise prices or reduce value offered. But If you raise prices you will lose subs… and it can become a viscous circle.
While £15 a month is still excellent value to ME as an enthusiast who plays 20+ games a year on Game Pass we need it to also offer good value to players who play less else it will get even more expensive.
@PsBoxSwitchOwner their will probably be an article blaming gamepass for that too
Sony can do what they want with their IPs. There is no right or wrong when it comes to property ownership. Only beggars feel that it isn’t right. Microsoft’s subsidized Gamepass model has spoiled so many. New games should only be available at full price so developers can make a profit so the lights can stay on and there is a healthy balance for this hobby industry. Like all hobbies in the world they don’t get cheaper nor is anyone entitled to them just because their coin isn’t right.
It's like MS are gaslighting, changing reality. Now they have to revert to the reality that was always there.
Imagine Sony spending $200 million to develop a game and putting it on PS plus day one. How does that business model work? It doesn't...
Gaming is a hobby, not watching movies or listening to music. It is difficult to maintain the number of users for subscription. People would rather watch Netflix than play 300 boring games.
Yes. A thousand times yes.
The maths on Gamepass never, ever made any sense. It's a last ditch attempt from Microsoft to brute force relevance in the video game space, and it makes no sense financially for Sony to follow suit.
I wish PS would offer a tier that just had online play. I can live without the “free” games.
I personally think both Xbox and PlayStation are wrong to make exclusives not exclusive at all, I know that's something PCMR gamers disagree with but I'm not them, so...
Nintendo have the right idea in terms of keeping them on their system to help sell more of them and fund future game investment, although them going nuts with their legal team I don't agree with I see why they do it.
There really aren't enough exclusives this generation for Xbox and PlayStation so the few they have making their way off-console is harming sales, it's as simple as that. I'm sure it's a decision made to short-term appease the shareholders with a bit of profit but long-term I think it's going to cause sustainability issues. Great exclusives shift systems, it's an old business model that was used for so long because it works, so if they're looking to generate more profit in the long-term, making more of those should be the priority. Ideally across a range of genres, some small and medium sized games as well as just generic open world big expensive ones like they used to.
@Toot1st successful? By what metric, i’ll wait.
Never once has profit been mentioned, ever. Because it never has been profitable and never will be.
Sustainable is COMPLETELY DIFFERENT and doesn’t mean it’s successful.
Cheers Toot 👍🏻
Removed - unconstructive feedback
The question in the title is not the problem with PS Plus, in my opinion. The problem for me was that PS Plus Extra was launched as a great deal, with AAA games such as Returnal and Demon's Souls remake. After everyone had subscribed they didn't continue delivering the same quality though, to the point where not a single month was interesting for me anymore. This feels like misleading the customers, strengthened by the hefty price increase.
Yep Sony AND Nintendo proven right now not copying that model.
Gamespass isn't successful, nor is Xbox the console.
This is just gonna quicken the death.
But Xbox the brand will be fine when it's fully multiplatform in a couple years
The price increase is not really the issue for gamepass, it’s the messaging. “Day one with gamepass” now contains several asterisks and it’s a bad look for a subscription service. I still just don’t think a subscription makes sense for gaming. Games are not consumed in the same way as movies or music outside of a very small portion of the customer base. Will be very interesting to see how it works out over the next few years.
All game pass does is reduce the quality (or size) of games - after all, why bother spending extra time and money on something better or bigger (or complete) if you are just going to put it on a subscription model.
Game pass and microtransactions are the worst things in this industry (as well as 30fps!).
Answer = yes, they were right.
But now not everyone can play 😟
Jim Ryan deserves all the crap thrown his way for his moving towards GAAS, but in the case the article describes, I think he was just being honest (ie not sustainable), and didnt deserve the loud minority outrage.
Xbox console users are looking more and more like second class citizens on the xbox platform.
Honestly I think they should keep first party games off day one, if its a game I'm interested in I will buy it anyway
That being said the increase in game pass still works out good value for money. That's £15 a month for hundreds of games. I used to rent games back in the day at £3.50 just for a weekend. Some months I would get 3, 4 maybe 5 so it would cost that much any way. £15 a month and you get access to all those games is just unreal value for money
@Jacko11 @Toot1st there is probably a degree of accuracy to to Jacko point.
The costs of the day 1 games being produced then put on GP won’t have any of the development budget/marketing etc as part of the gamepass costs.
The development costs are buried elsewhere
Hell I'd settle for 2 years after release at this point but we're not even getting that.
Yes, since I’d probably still buy the games I want anyway.
Can’t wait to see how much the price increases after the release of COD. That’s gonna cost ms a very pretty penny indeed
Game budgets keep increasing, and subscription rates eventually plateau.
If you offer everything day 1, eventually you will have no choice but to reduce game budgets.
The result will likely be in 2040, your first party games still have 2020 budgets and are not quite as cutting edge as they used to be. Or you jam them with microtransactions, something MS have done with Forza and a few of their other day 1 titles
@UltimateOtaku91 Sony has gone multi platform as well & they sell there games full price. So there is more to it than just Games Pass?.
The answer to this is very simple: Microsoft spent $70b on Activision, plus there's no way Starfield has turned a profit. If subscriptions don't continue to grow they need a lot more revenue, and forcing people to either upgrade to Ultimate or actually buy the games is certainly a way to go.
The problem with this model is some people might play CoD all year long until the next one. Paying for a subscription. That now costs $240/year at the monthly fee is significantly more than just buying CoD every year a la carte.
@-Sigma- If Xbox users are feeling like second class citizens. I feel for diehard PS fanboys getting live service they didn't ask for & remakes of old games that we have all played.
@LowDefAl Yep exactly, i wouldn't praise Nintendo for that. That's a company that re-releases and charges full price for old games. That's why you've never seen newer games on the service or even ROMS of SMRPG or The Thousand Year Door......Their Selection of old games is decent but it's stagnated at this point, with plenty of classics still unreleased.
I suppose you could argue that it's smart, but I would like to play Donkey Kong Country Returns and Tropical Freezer again for a reasonable price!
You'll wrote this this article as if MS was pulling day one releases all together and applauding Sony for not doing so. MS is still releasing games day one and Sony is not, so the jury is still out whether this is sustainable or not. It will be interesting starting this fall and going into next year when all these games MS has to release. Whether or not they stay on this path.
Exclusives as day one's for either Game Pass or PS+ do not make economic sense. It's as simple as that. Microsoft has already started to pay the price for doing this, and it'll only get worse.
Anyone want to know what happen to Hellblade 2 on GamePass? Here's some stats according to Matt Piscatella
https://x.com/MatPiscatella/status/1810414294665986168
Another proof GamePass isn't sustainable and big games released day 1 on GamePass is a bad idea.
I usually have no desire to play new AAA titles on day 1. There are enough great games on PS+ Extra I have yet to play.
But I do believe that an additional tier with day 1 (or even early acces) titles could work, just make the pricing sustainable.
I am at the point where I am going to cancel all the subs I have, gaming, video, music, software, websites, etc...then only resub to things that I find I am truly missing. It's ridiculous that these services never improve but the price keeps increasing.
Something had to give eventually. To their credit, Ultimate is still a pretty good deal for some folks. I prefer the a la carte method myself personally but yeah something had to change with Game Pass eventually.
of course Sony was right not to do it, from the perspective of being a profitable business. Microsoft was also right, on the basis it is a distant second to Sony and needed something to try and close that. it can also easily subsidise that.
Day One releases on subscription cannibalise retail sales. That's what happened with Disney+. Their cinema release business cratered due to what they did in the pandemic. It also modifies consumer behaviour if there is a short delay. However it was also a strategy to build share in a short period and chalenge Netfix (who dont have another channel to cannibalise).
With this hike, maybe Game Pass will wash its face. The attach rate for most consoles is only 2-3 titles per year. The problem is that the audience willing to pay the premium rate will be heavy consumers, and would spend more on new titles than the annual premium sub.
We’ve been told for years that It was hard to make a good profit from full price games at $60-$70, So it’s always seemed very apparent that offering all of your brand new games at a bargain bin price subscription service isn’t gonna work out well for a company.
I’m actually a GamePass Subscriber and it really annoys me That we’ve heard, Play it day one on game pass, when it sure doesn’t mean that anymore.
There’s people out there acting dense and pretending it does though.
As a consumer - why the hell would i be against that ??
So they realise growing the userbase is no longer possible for them, and have pivoted to the “milk the existing player base to pay for the games given “free”” endgame. Glad Sony were not part of that.
@nomither6 "As a consumer - why the hell would i be against that ??"'
If something sounds too good, it's usually too good. They lure you in, but nothing is truly free in life apart from the air you breath, so far at least. They will find a way to make you pay even more longterm but they hope you'lll never notice it.
Paying a "little" every month for rest of your life or buy a game and own it? Depends if you want to replay games, and I know I love that the older I get. You might be different, just saying.
The statistics state that subscription growth has stalled so something has gone drastically wrong and it hasn’t panned out for them despite all mouthpieces stating everything is fine.
RIP Tango Gameworks.
Personally I still find great value with Game Pass even at this higher price. But I recognize its getting harder for a casual player to get that same value if they only play a few games a year. I play many games a month on Game Pass so its still amazing for me.
If Microsoft needs new Game Pass subs they should make the service available in Steam like EA does.
As for Sony I only sub occasionally to use cloud saves. If it wasn't for this I would never subscribe.
From a consumer standpoint I would much rather sony add 1st party games to their subscription day 1. Having the choice of buying the game or having the subscription is important. Especially with their recent refusal to discount games substantially, I am much less likely to play their games if the only way to play them is $50+. I simply let some of their games come and go without even considering them.
I love gamepass ultimate tier. I try so many games I never would have played otherwise. Since I only play a few playstation exclusives, I do not play 3rd party there either. Where gamepass has me constantly on my xbox I also opt to buy a lot of 3rd party there. For all the hubbub about why own an xbox when you could just own a pc, I actually regret the ps5 more when I feel I could have just played the few games I want to play on pc a little later than the console launch.
From a business perspective sony probably made the "right choice" (most profitable choice) but since I am only a consumer I would much rather they went the other direction. Gamepass is the main reason I am mostly pc/xbox this gen.
Sony tried putting horizon forbidden West on there after one year and they lost a lot of sales. Gamepass isn't sustainable, if call of duty doesn't drive subscription numbers then don't be surprised if they announce another price increase next year.
Meant to pick C, but added to A. I have premium for a bit for psvr2 titles. But am getting an adapter for pc as soon as so will drop back to extra or essential. Game pass and the like just offer too much by way of games I would never play anyway. But it got to be great for some. A psvr only tier would be one I'd buy into.
@Godot25
"Ultimate with new price is 1€ per month more expensive then PS Plus Premium. While having first-party games there day one, which Premium don't have and EA Play included, which Premium don't have.
So I don't understand point of this article tbh."
Hits, pure and simple.
The Sony/MS related articles are easily some of the most commented on, on PushSquare.
And whether they are relevant, accurate or make a whole lot of sense is becoming immaterial when hits are concerned.
The subscription model especially in the early days (think Netflix) price the product as a loss leader. This is a means to attract customer base that then become reliant on this new product. Once you have them hooked the real price point comes into play. By the time these models are fully costed they will be many times more expensive than the introduction offer. Expect gamepass to be $30+ in a few years
@PuppetMaster it's looking like Helldivers might have been better off putting on Gamepass anyway as the game is on life support at the moment thanks to most PC players leaving
Thank you Phil Spencer, for proving you're one of the biggest liars in the game industry. I hope you get booed every time you walk up on stage.
To all the fanboys in here , Microsoft is in a different position than sony,..I'll use call of duty black ops 6 for example,..the game will be available on gamespass on console and pc at no extra costs ....so Microsoft will make money from subscribers to the service , Microsoft will also bring revenue from call of duty black ops 6 game sales on playstation pc and even players on xbox that buy the game and license fees from other cloud service providers and all Microtransactions from all platforms. Even if Microsoft goes fully 3rd party , all Microsoft games will be on gamespass for xbox consoles and pc,..full price everywhere else,. So in other words people buying Microsoft games outside the Microsoft ecosystem will make it easier for Microsoft to continue to offer gamespass at a competitive price.
They tried it with Horizon and apparently it lost them hundreds of millions
@simondud1 Helldivers 2 wouldn't sold 12 million copies nor top NPD chart if it's day 1 on GamePass. And i'm pretty sure Helldivers 2 was released for PS5 which a lot of people are still playing the game.
So, i don't know where did you read the game "on life support", Phil Spinner note perhaps?
Like him or not Jim was a good business man, savvy and acutely aware of the market he operated in, evidenced in his decision making. Playstation has been resoundingly profitable under his watch.
This is just another talking point to fuel console war ignorance.
Let's be entirely really here. If it were Sony offering first and third party big budget AAA, AA, and promising indie titles day one to their subscription service and MS not doing so near everyone on here would be praising it as a pro consumer move and amazing value and trashing Ms.
The truth is that regardless of its profitability and even more so regardless or MS raising its price and splitting into tiers, compared to ps plus it's just a far better value in terms of what is on offer for the given platforms. For nearly the same price as the highest tier ps premium, you just get more with the gamepass equivalent. The focus continues to be on big budget first party titles, but if you really look at what has come and is coming to gamepass in terms of third party offerings, that's where even more value is offered. Games one may want to try but not necc spend 40-70 bucks on, you can play through for far less.
For those that just enjoying playing through games once then the sub fee pays for itself quite quickly. Not to mention you can simply cancel and resubscribe at will when something peaks your interest. I don't and haven't ever owned an Xbox, but even I can be honest and recognize it's the better subscription service by far. Hell, if Sony's upcoming games are just live service garbage, repetitive sequels, and Marvel cheese, I may take the plunge on a digi MS box, primarily for the third party day ones, and Indy J nostalgia alone.
Newsflash for all these armchair business experts: sustainable in terms of these services simply means it's not going to maximize the amount of money they could potentially siphon from you. If you really think MS is losing money on it or even the laughable bs like Sony was losing money on the Ps5 hardware, you are delusional. The shareholders and those subservient to them don't even undertake projects that result in such. The fact that we see so many here going full sheep and focus the conversation on corporate shareholder profits, revenue extraction, etc rather than value for you,.. the gamer, is just sad.
@KundaliniRising333
I don't understand how you can call everyone armchair business experts when, unless you work for the companies directly, you're no wiser than anyone about the inner workings of each company and are also offering an "armchair" take.
They were always right, if MS can't make it right imagine Sony who has a fraction of the MS money. You need to be intelligent about it and they were.
Colin was right.
@ATaco my take is 100% one as well. If that is all you extracted from my commentary then I'm sorry you've missed my point. Have a great day.
Yeah, Sony was right in the end. I was never really jealous of Game pass, as very few MS exclusives appeal to me.
I'd find it hard to believe that anyone has ever paid full price for gamepass ultimate. The price rise was always going to happen after they spent billions on Activision. Though should remember that MS put more than their own games on gamepass day 1. Sony have added a few indie games day 1 but they don't have the same money to play around with. So while it would be nice to get a couple of games a year added day 1 to PS+ it's not worth it.
How much more?
If PS+ Premium was $60/month with one free day one release every month, is that still a deal? Sure, if you were willing to buy 12 games a year at $80 each, then it's a good deal...but for most people, it wouldn't be.
The question is, what price point does it make sense for both sides? It's higher than $15/month, I think Microsoft just admitted that. I bet it's higher than $20/month, too. We'll see how long it takes to hike those rates again, or restrict the number of day one releases, or both.
@KundaliniRising333
You're point was that everyone offering their armchair business expert opinions are doing so in bad faith to fuel console war ignorance correct? Then by you giving an opinion that is not grounded in fact or solid data, you are also adding fuel to this fire. The only difference is you are attempting to stand on a higher pedestal than others while doing it.
There are people that still buy new games at full price, either physical or digital, but I don't know how any of these game companies can charge $15-$20 month considering the development costs. How many and for how long do subscribers need to pay to make up their investments? How are companies NOT swan diving into their money vaults to make up for the costs?
@Zeke68 not to mention that if you care about games and it’s a hobby for you, devaluation leads to drop in quality. Is it nice to play for cheaper? Yes, but the quality will drop to meet the price. I will never understand the argument that as a consumer we shouldn’t care about profitability of the corporation that makes what we consume. They are directly related.
True enough - it would be an amazing value and people would praise it. Heck, I'd sign up for it, even as I questioned its sustainability, and I'd be waiting for the bait-and-switch to hit.
It's amazing Microsoft has gone as long as they have without raising prices, but that really seems to be due to the deep pockets they have where they can sustain losses many businesses can't. And their willingness to sustain those losses seems to be dropping. I suspect this won't be their last price hike.
I don't question GamePass because I don't like Microsoft - I question GamePass because it doesn't seem like a sustainable business model (especially when I dropped my subscription after my initial 3-year deal expired, and didn't really miss my Series S sitting idle for a year). With the prices going UP, I'm less likely to renew than before.
Yes Sony did the right thing, consumers hate it because consumers have become incredibly cheap and entitled recently (go see any prediction media and you'll see people screaming 2 months after the latest release it should now be on PS+ because they don't want to pay for it...yet they'll also complain about the layoffs in the industry while they're not wanting to pay for the games).
However the real reason it's the correct approach is for the benefit of the industries quality. If you know all you have to do is make a game that works and Microsoft will pay out your profit line just to put it day 1, do you really think they're going to be interested in making the best game possible or simply something that can pass for another profit pay out? At Sony you HAVE to make a good game, or it doesn't sell and your company goes under, so forcing companies to have to make profit THEN 2-3 years later given them a bonus pay boost going on PS+ as a "well done" is a much better structure for consumers getting quality games. I also think Sony are doing it right by having a select amount of small Indie games that are getting great test reviews onto PS+ day one just to make sure they make their profit and can be secure going forward because they've obviously produced something quality from the off.
Removed - trolling/baiting
@ATaco no, again that was not even remotely the point. The point was value and which was a better one. So you are cherry picking for the sake of argument. I am going to do us both a favor and just going to disengage from the back and forth. It gets nowhere when the discussion is intentionally contrarian.
Have a great one
When I look at Ubisoft Plus, I see Day 1 games as the main selling point (PC.) When I look at EA Play I see Day 1 games and all DLC as the main selling point (PC.)
Clearly these businesses see a lot of value in selling subscriptions for "day 1" content, and are no doubt looking at streaming TV providers (Apple, Amazon, Disney) for inspiration.
I don't think Day One in itself is the inherent problem with what's happening with GP. I don't think Ubisoft or EA see that model as an inherent problem.
What I see going on with MS isn't a problem with that model, it's a divided leadership, no clear set of goals or path to reach them, no actual direction, just a bunch of people arguing in a conference room about why they're actually there and what they're supposed to be accomplishing, all while setting unrealistic goals and getting confused about why they can't reach them. I see an already divided management structure get infused with new executives from Activision that already hated the old structure back when it was a competitor, now invoking their dream of "fixing" it. And I see it as a backdoor attempt at fixing the earnings hole the existing model would create explicitly for Call of Duty that they didn't factor into its design. It's reminiscent of Square-Enix always being disappointed for not meeting sales goals that any one of us could have told them they could never reach before they ever budgeted the project.
Asking if "day one" is the problem is very much the wrong question. Other publisher manage that model fine. The problem isn't the model. The problem is the disorganized chaos with zero strategy or direction in the executive office of the people running it.
If one is a subscriber to Netflix, GamePass, PS Plus, etc., why would they not want more great content sooner? This isn't a charity we're supporting. And if the biz model isn't sustainable, it will change. If quality goes down, there will be new alternatives introduced into the market with greater quality at a price consumers feel appropriate.
@RobN I hear you. I guess I just don't see how one could not see the value. The most recent numbers given for GP subs is 34 million. Let's just say only half subscribed to the ultimate tier which in all honesty is probably an underestimate as day one is really the big selling point for the entire service (the lower estimate will also help account for Those that don't sub continously) :
That's 17million subs paying 19.99 a month usd. We are talking 323 million A MONTH in revenue and nearly 4 BILLION a year...
Even subtracting the cost to pay devs to release day one into gamepass, some of those being larger budget titles but many other well under 100 mill, the profits are pretty obvious.
Sure it's not maximizing potential profits, but it's most certainly getting engagement in certain titles that would otherwise had less, and at the same time keeping many subbed during lulls with the allure of more day ones to come.
A 3 dollar increase to GP ultimate is nothing and in all honesty a price increase had been expected by analysts for some time now and I wouldn't doubt most expected it to Be far More than this.
Even as a ps player solely now for decades, it's impossible for me not to admit that GP is the best value sub in gaming right now and has been for some time. I can count at least 14 1st and 3rd party titles I have interest in and would play if I had gp that release day one in the next 18 months. All of them 50-70 dollar titles.
For me, The value proposition is clear. so is the reality that the revenue is likely in the green for the corporate overlords.
I don't care about subscriptions at all, to be honest. I just hope they make online free again. It's free on PC. Why not PS, like it used to be?
Prefer to own my games.
But all that revenue gets split HOW many ways, to how many developers? If a developer releases a game that sells 1 million copies at $60 each, they know they're probably getting something like $30 million in revenue (after stores and publishers take their cut). If you're going to pay a developer (you don't own) to put their game on Game Pass, you have to find some way to make them think it's a deal - a guaranteed minimum, a scale based on engagement, something. There's little transparency in what these deals look like, so we don't really know how good a deal it is on that side.
In other words, four billion in revenue for Microsoft is great if they have two billion in costs, but it's pretty awful if they've got over four billion in costs (including revenue sharing). It's also pretty awful if selling the games instead of putting them on GamePass would have brought in six billion in revenue, isn't it?
We don't really know the cost on Microsoft's side - but I suspect it's a lot higher that you seem to think. I've read plenty of experts who believe it's a money-losing proposition, still. Perhaps a 33% price hike (from $15-20) will change that. Perhaps not.
PS PLUS has been a smashing success in my opinion competing with Game Pass who allowed cheap conversion and stacking to an extremely generous degree.
What it did for my whilst subbing was giving me a chance to play a lot of different games and genres that I've missed out on. I do wonder if they hit the right pricing, because I stopped subbing after the price hike. But that's the thing, now that Game Pass is becoming less attractive, the scales will til slightly, and I predict that PS PLUS will see grow numbers that reflect this.
If Microsoft can offer the console experience via a firestick plug-in, they may also grow alongside SONY, but they'll mainly be software makers and publishers of admittedly a wealth of titles from a wealth of studios.
I don't buy a doom and gloom-interpretation for SONY. And Microsoft also proved this summer that they can offer a rich and interesting plate of titles that is enticing to all players. I think that in a perfect world both companies can find success.
@Godot25 What don't you get the 60% I want to own my games or the 25% that don't see it as sustainable? If you put there online play with online saves and no free games at a discounted price there would be even more people saying that they rather have that.
If they give me a option online play with saves at a discounted price then i would take that straight away.
@EfYI You can call it what you want but how will you fund a 200 million budget with subscriptions. And you need to pay 3rd party developers on top of that those games are not free on these subscriptions. Why do you even hear some 3rd party developers say it's useless to put your games on their platform people don't buy them they wait untill it's on the subscription.
Why on earth would i not want day 1 exclusives in the service? Are we gamers or shareholders in these companies? As a gamer what interests me is getting the best price for my games. Whether its sustainable or not i dont know and frankly i dont care. Let the billion dollar corporations figure that out.
@NEStalgia Surely this failed strategy derives from the mismanagement you're referring to. So yes, Xbox leadership is the root of the issue, but that doesn't make the Game Pass model a non-issue. It's a spectacular failure, made more catastrophic by the fact that thousands of random internet users with one millionth of the data Phill Spencer has access to, have been sounding the alarm from the very beginning. The whole story is truly baffling and quite educational.
@Psofo Well there is a good argument that you should care, not because of profits for the company, but for sustainability of the industry itself. If the industry is substantially devalued to meet the needs of a service backed by one company due to their ability to manipulate costs, the quality of the entire industry can suffer. Not saying you should care, thats up to you, but there is a really strong argument for caring. You do get what you pay for.
@RobN It's important to remember that their major acquisitions didnt just total something like $80bn, but also incurred the cost of operation of said developers to release their games on a subscription service. Money going out to keep the gamepass operation alive far exceeds a normal publisher and will take a long time to even out.
I think the way Sony are handling it all is fine. Put their big games onto, PSN after a year or so. But they need to boost the games on their trial system as I’ve used them loads to see if I like a game. People may say but they are paid demos, well yeah in a way, but we’ve not really has game demos like you got it PS1 or PS2 for years and years now. To me Trials is a brilliant feature. And with Microsoft making cut after cut after cut in staff and increasing the price of Game Pass multiple times it’s good Sony hasn’t copied them.
Game Pass is just too much, you seriously need a LOT of free time to make the most of it.
@Art_Vandelay I hardly think the strategy of GP is anything close to a failure, and again, they're not the only publisher successfully doing it. I think that's a self affirming bias by people that for whatever reason WANT it to be a failure because they just don't like it or it conflicts with their own ideal model.
The problem here isn't that it's not profitable. Simple back of napkin math demonstrates the revenue from it is quite substantial. The problem is just that Xbox alone was seeking profitability while Ms corporate is selling profit maximization in all divisions in the extreme and the gp model while profitable isn't maximizing POTENTIAL profitability. It's an unaligned goal between the division and the corporate holders. Splitting the difference insane goals of growth were targeted, and naturally those goals were missed. Any company not Microsoft and not in a monopoly position like Sony would be thrilled to have the kind of revenue numbers GP generates. But it's not enough for these guys.
The problem in the consumer space is then that they sell one product and policy then randomly change it constantly just after saying they won't. Based on this alone I fully expect halo and Forza to hit PlayStation now. It's their MO to say no, and then do it if it makes money.
@NEStalgia I'm pretty sure that noone except ms know if gamepass is actually profitable or not. You need a VERY high revenue to support the amount of publishers they now own.
@Balosi The subs have revenue in the billions at minimum with about 35 million subs. Most of which are paying to play the big ms games. Given that even Sony games launching to a MUCH bigger audience with much higher demand IP don't really sell all that many individual unit sales relative to size if market, those 35 million subs don't look like bad return indeed. But again, the problem is, if they can make MORE, they will. Not unlike Nvidia declaring that the absurdly priced rtx30 series was underpriced and they could get away selling for almost double that. The weren't losing money on rtx 30. They just realized people would let them mug them on the rtx 40 and gamers are total rubes and always just say ok.
A bait and switch scam from Microsoft? Who would've guessed. 🤷
I warned of this repeatidly for years as you lot tried to tell us what a great deal it was as they kept changing the terms of the deal. First you could keep your games forever, then you couldn't, then you don't get games day one, then you have to pay more, etc.
This was all awfully predictable and why i don't buy microsoft systems anymore. Actually i wouldn't buy microsoft anything. But they currently have a monopoly on windows which they force us to upgrade every few years just cause they can and everything breaks in your pc if they end support.
Best company. Lot's of good stuff. 😆
@NEStalgia I feel you are underestimating just how much supporting so many studios costs, and the impact gamepass could potentially have on those studios traditional forms of revenue. But as ms do not release any figures, this is a debate that will never end.
Yes I think they were right
Sony is far from getting everything right, but i think that their fundamental strategy is sound. It is telling that it has been the more stable in terms of their hardware and service offering.
The "corner the market and then dictate terms" strategy is classic MS. It is heartening to see the market tell them to re-assess.
I have heard claims that now their aim is to be the largest publisher. I am sceptical - MS don't tend to play on other people's lawns.
@Balosi I can't totally disagree with you here, but I think the missing nuiance here is theres a difference between game pass being a profitable but but min -maxed model vs a company making an acquisition of a behemoth bureaucracy just to get their mobile games, and absorbing their to heavy lopsided console games company to the detriment of the stability of the business model their existing customers agreed to just to do so.
It's two different conversations and the distinction gets lost in conversation. Because that's the reality. Gp was profitable and successful. But they decided to put an elephant on a tricycle until he breaks solely to get at candy crush and want the gp subs to make up the gap for them. That's a different problem than is day 1 sustainable.
@Flaming_Kaiser @Flaming_Kaiser
I guess you charge 20 million subscribers 10 dollars a month and with 30 million more, there's money for 3rd party titles?
Also, who have you heard saying it is not worthwhile to put games on PS Plus?
@trev666 this is the way to do it. I unsubscribed for 8 months and recently picked GP up again. All the newer releases I can smash over the next few months and then stop playing when it runs out.
No idea why anyone would have autoredeem turned on when doing it this way is so much better.
@trev666 it not your job but if they are not making the money they are just going to raise prices which they are so it effects you in the end
@Mythologue because of server cost and security something that is not Free
I specifically quit GP last september as in my opinion, it damaged gaming, devalued full price games and was partially to blame for so many studios and devs getting laid off.
Sony's approach was always the better thought out one that was actually sustainable in the long term... it was clear to see by anyone who was not being blinded by greed.
Sony get it right. Obv this is a PS site and there aren't going to be too many Xbox fanboys (although most of us enjoy both consoles). imho the issue Xbox have is that they released the all you can eat model without having any quality food on the table. They literally closed down their games production options and then opened the eat-all-you-can restaurant - and then scrath their heads when it failed.
Too late now for Xbox. They have about 20% of this gens market and I would be very surprised if they become anything other than a publisher going forward.
The sony method seems better imo, release new games at full price and bring them to the system 6-12m later to boost interest in the sub method for those who are not as bother about waiting. It supports the initial sales, and then supports their interests at a later date.
As for Gamepass I do read this as an admission of sorts that the model is not working as hoped. The main selling feature of GP when you listen to people is always Day 1 games, which I understand you got on the lower tier and only had some issue if you wanted online play. With MS stating very clearly that GP is not growing at a level they were happy with and moving everything to the highest tier, while making standard look worse for upselling purposes. Its essentially an admission that GP is not sustainable with these numbers unless everyone is paying the largest amount. And even then I would wager its still not fully sustainable which is why we have seen the inclusion of "early access" plans in the sub model, which is truly scummy imo (regardless of the platform or company).
@Titntin this is something I have been saying. Sure it’s nicer to pay less. But we already are paying less at $70 for a new game. Chrono Trigger launched at $89.99 in 1995. Star Wars Shadow of the Empire was $69.99 1996. Video games have not gotten more expensive, they have gotten cheaper. I don’t understand how people think their constant desire to pay less for a product won’t result in a lesser product.
@NEStalgia Sorry to disagree buddy, but you're way off the mark here. You say GP is profitable and, to prove your point, goes straight on to revenue. Just like Microsoft, but there's a reason they obfuscate the profitability numbers of the Xbox division: because they don't look good.
Sure, there might a profit there, because they own Minecraft and COD, and they do sell a la carte. But GP alone is utterly unprofitable when you consider the cost of maintaining all those studios. And the proof is in the pudding: they've just tacitly admitted that by making all those seismic changes.
But hey, don't listen to me. Listen to someone who has maximum visibility into how this kind of business operates: Shaun Laiden once said that, to be profitable, the GP subscribers base should be in hundreds of millions. 500 million was the number he threw, to be accurate.
And lastly, Phill Spencer has never said that GP was profitable. He actually used the word sustainable, which is totally different. It implies profitability in the long term, which would make sense if you looked at the leaked documents from the ABK court case. It just so happens that those numbers were way off as we now know.
@Rob_230 I think its a great deal personally. I relate it to renting titles that I would never play otherwise. In the 90s we paid $5 for 1 game for just a couple days. Now we have access to hundreds across multiple platforms(PC and Console) for $20 a month. The selection is diverse and I am always finding something new to play, but that I wouldnt want to buy. Additionally, given the current state of platforms, if you want to play online you need the base account, which is $80 for PS or $70 for xbox, thus you should subtract that from the Total cost. (ie. GPU = $170 a year + Online($70)) Not a bad deal really.
@Art_Vandelay It's one of those topics that has waaay more detail than is manageable in these sort of passing conversations, and this will probably be lengthy, but while you're right on several points there, I think it's important to decouple a few items that get conflated, still.
Yes, revenue vs profits - but - we can estimate the revenues easily, and when you look at what the budgets SHOULD be (I won't say what the budgets ARE, because what budgets are vs what budgets should be to be profitable especially these days are oft unrelated) we can still come up to an easy answer that it's quite profitable (again not MAXIMIZED profits necessarily but that's the point.)
But to do that we need to decouple 3 things:
1: As mentioned above what budgets SHOULD be vs what they're really spending. We don't know what they're really spending, but if they're overspending, just as Sony was, that's a DIFFERENT problem than if GP is profitable - if expenses are well managed.
2: Decoupling ABK from the conversation. When we talk about "all these studios" - I think that's including ABK. ABK and it's myriad studios nearly entirely dedicated to a single game doesn't really belong in a conversation about if the model of GP is profitable. That's a conversation about if buying ABK was a boneheaded decision of mismanagement and/or willingness to cannibalize GP and the entire Xbox console ecosystem in order to gain access to the money printer that is Candy Crush and Clash of Clans. ABK's presence in the conversation is a separate conversation - and talking about GP and Day One as a business model really needs to be done in a vacuum without including the ABK purchase, which was in no way a good fit for that model, and was already circling the drain of its OWN finances due to the top heavy weight of CoD, which is the entire reason they were seeking buyers to begin with. So that's not "is GP's model sustainable" that's "Is buying an oversized, overleveraged behemoth that's barely making returns by sacrificing everything to make one single game and then forcing your existing customers to pay for the bailout all so you can gain marketshare in a different market you desperately want to be in a bad move for a subscription model"
3: I think... there's a lot of prongs to the "profitable" angle. We're splitting hairs on revenue vs "profitability" - I think it may be fairer to say instead of "GP was profitable" that "GP was as profitable as traditional retail sales were." Because we can go back and forth on the level of profitability relative to budgets of GP but that implies that same conversation doesn't exist for traditional retail sales, but as we see from the myriad studio closures, traditional models aren't exactly terribly profitable either and GP likely did no worse than traditional sales do. You have studios closing right and left.
You have Sony running on, what, 7% margin? The whole industry has cost management problems killing profitability across the board whether we're talking subscription or unit sales models. The only real difference here, when you look at revenues vs unit sales relative to costs is, for the GP model every game shares in the revenue fairly evenly and thus loses or gains fairly evenly. With the traditional model it's very unevenly distributed where certain games get the lions share of profits whether deserved (Hogwarts) or not (GTAV.) While other games whether deserving (Rebirth) or not (Skull & Bones) get hung out to dry and lose quite a lot. And even Sony's games , while well regarded, are spending so much to produce, that even with near total dominance in the market, are barely making any money off it.
The one problem subs have is there's only so many games on it at one time, so that there's only so many games that can share in to economy of the players at a time. But the problem with retail is there's SO. MANY. GAMES. dividing a fairly fixed market size, only a handful can be winners and most will be losers. Retail has a problem that it needs a lot less games to be made by a lot less companies for the retail sales to really be profitable. Sub's problem is it needs a lot more customers that want to pay SOMETHING. In both cases, the real problem in the industry isn't if day 1 subs make enough revenue on subs or if new releases sell enough copies. The real problem is the cost to make games needs to be dramatically reduced relative to the actual paying market size to stay profitable no matter WHAT distribution model is deployed.
And going back to Layden, he's basically said this as well. He's both warned about the blockbusters being unsustainable, AND the subs needing many more users than they have. It's why I go back to "GP is/isn't profitable" being the wrong answer vs "is GP as profitable/unprofitable as retail" Both are failing.
(Loving the George Castanza avatar btw )
@NEStalgia That’s not the way you do this kind of math. The sum of budgets for all games in production does not equal the overall cost of running the platform. There's so much more to it you're ignoring. Again, Laiden would know. Straus Zelnick would too. And they've warned about subscription models not working with games.
You're conflating another point Shaun made regarding budgets, which is related but different. Actually, the budgets issue only makes GP worse from a business perspective. Yes, costs need to come down across the board, but day one releases on GP won't become a good strategy even if they do.
Here's another data point: according to the Insomniac leak, Sony estimates a loss of around $90 million for putting Forbidden West on PS+, and that is a full year after release. Now look at Sony's own margins and tell me PlayStation would be profitable if first-party games were released day one on the service. You know, it's still profitable doing it (mostly) the old ways, even if the retail model itself needs some course correction as you rightly mentioned.
Again, you're doing napkin math and failing to see the reality, which we can only infer from gathering all these tidbits that offer some insight into the whole picture when combined. I insist: why would Microsoft intentionally hide profitability numbers from the Xbox division in their earnings reports? Sony doesn't…
And about ABK, here's the conundrum that Microsoft has put itself into, which actually explains all that recent pivoting: COD might just be the missing piece to fully realize the GP vision if you only look at subscriber's numbers. But to realize that potential, they had to increase the cost of operation to a level of unsustainability that is unacceptable even to the almighty Microsoft.
Look, the problem is not the subscription model per se. It's day one releases on those services. And Microsoft knows that, so they've begun backtracking.
PS: sorry if I sound a little blunt, but I'm trying to be objective. You know, George is getting upset! 😁
@Art_Vandelay yeah zelnick, and kotick would know. But then again, Wilson and Guillemot would too and they're doing it.
I'm going to reduce the rest to a tldr for now and get back to more later I hope but, the average gamer does not buy more than a few games a year and not a ton during an entire generation. The total spend by a game pass subscriber is GREATER than the average player. That's an INCREASE in per customer sales dollars for average customers. What were the getting to is that the "better" sales from unit sales comes primarily from whales that buy in excess of the norm. That's the sales we're taking about losing. And if the industry depends on the whales for most of its revenue, is all lost anyway.
That said I've always find that 90 mil hfw lots number ODD. Their games don't sell that great year 2. Horizon isn't one of their biggest series. And forbidden West has mixed reception. Estimating that loss is based on projected sales and that 90 Mill projection from year 2 seems more like over estimating. And shifting other losses into that for convenience. It also assumes no subscriptions are gained or retained based on the presence of the game. Its an awkward number.
As for Xbox hiding numbers , yeah, they're bad, but they were hiding those numbers before and after GP existed....I think it's just fair to say Xbox just sells badly in general. If Sony only sold 35m consoles they'd hide the numbers too.
Again though, like you said, is not about subs it's about day 1 BUT what exactly is day 2 losing vs retail? Whales yes. But if annual spend is greater for a subscriber then an average customer, which it is based on attach rates,..... They'd still be ahead not behind. The problem at Xbox is retail, or subs, there's just not enough players there for the year either way to hit big profits at all.
The ps+ is just bad, there are occasional a handful of good games but they all take time to finish so you are often better off just buying what you like. On the other hand Game Pass seems to focus primarily on indie games, yes there are good ones, but there is so much junk as well.
@NEStalgia "the average gamer does not buy more than a few games a year and not a ton during an entire generation. The total spend by a game pass subscriber is GREATER than the average player. That's an INCREASE in per customer sales dollars for average customers."
Bingo! That's exactly why the subscription model has hit a plateau. People eventually realize they're wasting money, so they leave. And that's especially true in the games industry. GP would never hit the necessary subscribers base to be profitable in its old form.
But anyway, we're running in circles at this point. The fact is that Microsoft is finally pivoting, thankfully. And I feel vindicated.
Quality discussion, btw. Even if I don't agree, you raise some thoughtful arguments.
One thing I'll throw in that I haven't seen mentioned yet. Do you like the F2P model, where the game costs nothing but there's paid DLC content or gacha or pay-to-win or cosmetics for sale? Because GamePass games are, in a sense, F2P and are more likely to lean into after-purchase monetization.
Now, I acknowledge that's a weak argument in a sense; any more post-purchase content for sale is almost a given, whether the game ends up on GP or PS+ or not. But at the same time, I think it solidifies the NEED for such content to help pay for the game development. If you're nearly giving away the game itself (and there's evidence the revenue third-party developers get from these service deals is dropping), the money has to come from SOMEWHERE.
Yes Sony was right! When you SELL 10 to 20 million copies of your 1st party titles why on earth would you give them away for essentially "free" on your subscription service?! They would need 100 million + subscribers to offset the costs in lost sales. Do I like getting my 1st party games on day one for "free" on Xbox? Sure! Do I think it's sustainable? NO and I never have! It's an example of a 3 Trillion dollar company with a major loss-leader product/service. However it's obvious and has been for a while now that its not going according to their projections, thus the changes.
@RobN This has actually been a concern of mine since the start of Gamepass, and why it isn't for me personally. Making the games cheaper to play, combined with the necessity of continual growth, is going to lower game quality significantly if it isn't subsidized by other revenue. Up until now (giving the quality of microsoft first party games the benefit of the doubt) microsoft has subsidized this cost as a loss leader. They are no longer willing to do so, so either the quality goes down, or they rely on more monetization to get those costs back. The subscription model just doesn't make sense to me for a few reasons. There are so many people who play COD and only COD and buy it every year. $70 to do so outside of Gamepass. $240 with Gamepass. "But they get access to other games." Doesn't matter if they are unlikely to play those games, or even if they only play one or two other games. Gamepass makes sense if you play a ton of games, but most people don't.
@EfYI Oh they said it themselves if you put 200 million releases there for peanuts you cannibalize your own profits. You are training people to wait for stuff to be free. Nintendo does not give its games away you know why they know it's insane to give away your best stuff for next to nothing.
@Flaming_Kaiser
Okay - yeah, so I am talking about adding games to the service after a while when data suggests that even deep sales have stopped selling. And I haven't really heard developers aside from Larian that they'd avoid the service (and they might have talked about Game Pass).
Take Mount and Blade II for instance. Came to PS Plus and made me wanna sub because even the deep sales have not been enough for me to pull the trigger and buy it. Or Days Gone - it sold 15 million and made a headline for the line up in PS Plus (or the game library that existed as a form of beta library).
@EfYI What's the use after that I can get them for dirt cheap and take my time playing them.
Show Comments
Leave A Comment
Hold on there, you need to login to post a comment...