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DonFerrari said:

EricHiggin said:

Last gen PS3 sold 87M units, and PS4 has already sold 100M and is likely going to end up selling 20M-30M more than that. So out of those 10M extra players right now, none of them are buying into Plus? What if there were different tiers? What about the other 10M-20M or more in the future? Will PS5 sell less, the same, or more units?

Not sure why you want so much what if scenarios. I expect similar 40% attach ratio, so when PS4 get to 130M HW sold I would imagine 50-55M PS+ subs. Not sure what you are talking on these extra 10M buying Plus, sure some of them do, just look at the PS+ subs announced by Sony it have been growing with HW sold (but not at the same attach ratio, as probably late buyers are the ones that are very cost restricted).

Analysis must be done ceteris paribus. You move one variable and talk about the effect of that one, do it for each of they and then make the harmonization of all of them. Trying to change 3-4 variables at once will only make your analysis confusing.

In April 2003 XB Live had 350,000 users. In April 2004 XB Live was now at 750,000 users. In July 2005 Live had 2M users. E3 2007 Live had 7M users. March 2008 10M users. Jan 2009 17M users. Today it has 64M. I don't see why PS offering different options and packages couldn't lead to a significant increase in users.

XBL Gold doesn't have 64M users. You can bet it have like 70% of what X360 had. The XBL subs MS announced way back were total XBL (Gold, Silver and included PC). XBL gold is less than half of PS+, so likely 15M or so, which would be lower than 2009 numbers you are giving.

Not games that released for half price, games that dropped to half price which increased or kept sales going so instead of the game stagnating or fading away, it continues on. Whether it be PS first party or third party, it's a way to keep bringing people in. If you look at Ubisoft for example, games like AC Origins or R6 Siege came down in price fairly quickly which kept sales going and increased overall sales by a considerable amount. I myself wouldn't have bought Origins at $80, but I did for $40 like a month after the launch, and it's led me to spend more money on all the DLC. The basic Plus package wouldn't be a new launch really, it would be an additional offering to an existing service, just a more affordable one. Like how you can buy Origins or Siege in different editions for different prices.

Yes sure that the pricecuts increased the sales, but they didn't double after cutting to half (and again even if they did, not much value in selling the double for half the money anyway). Games launch for 60, so 80 would be some collector edition, and yes when price drops more people buy (most of the non first party I buy under 20). Those probably would give 25-30% more sales to the game. But again as I said most of the sales happen before the pricecut. And if your logic of PS+ by half price would do the magic you think developers would already release the game at 30 pricepoint (and perhaps include more DLC, special packs, etc).

I agree you should use historical data to guide you to a certain degree, but unless the historical data and what it's tied to match up exactly with what you're comparing it to, you have to interpret how things may differ now. The PS3 gen compared to the PS4 gen is very different, also taking into account the competition.

Sure thing market change. But unless your reason and explanation for straying far from the historical data is backed by strong evidence or analysis it isn't much likely to happen (just like someone that said on the alternate history that if Wii were a HD competitor to PS3 and X360 it would still come in front of everyone).

When PS gives games away with PS Plus, those games aren't free for them. Even if they give their own first party games away that's some lost profit. One way or another PS has to work for your dollar. They don't profit 100%.

I know, and you want to make it even less profitable by offering MP for half the price and they earning less than on the 50-60 subs.

MS had bigger problems, and like I said, they are heading for a service based platform and have been before it became obviously apparent more recently, so the last thing they want to budge on is online pricing. That's their gravy train. PS isn't focused and relying on that so much.

If they are relying on the online money more than Sony, than they have even more incentive to find a pricepoint that would bring more subs (with higher profit in the end of course). So you defeated your own point here.

Correct, and your point is that PS/SNY aren't going to do more work, especially for less or the same money. Why sell 30% more consoles for 20% less when they could sell 30% less for 20% more? Market share and mind share. The opportunity to get you into the ecosystem and possibly lock you into it with everything else they offer.

Nope. If your projection isn't more profit then you won't do it. Why don't Sony cut the price of PS4 to 199 1 or even 2 years ago? Because the additional sales of HW, that would bring more SW and subs together, wouldn't make they profit more than what they decided (at least on their projection). It is as simple as that.

If your numbers are right then yes it would be worse. How do you know for certainty that would be the case though? Even if it ended up so that PS made the exact same amount of money in the end, what's wrong with that if they can please more consumers while getting them into their ecosystem?

For me as customer there is nothing wrong with they charging less and bringing more people. But as company to earn less money isn't a good strategy.

We can't have certainty, but since I'm basing on historical data I believe my projection would be more probable than yours.

If you had gone with something like 40 for PS MP, 55 PS MP+games and 70 on the PSNow I would agree there would be possibility of more profit based on the anchoring tatic that makes the higher priced one more interesting because customer will think "for just 10 more I get free games" some would still buy the 40, but the 55 or even the 70 would increase sales compared to today. Lets say that instead of 50M subs PS+ may achieve this gen it go to 60-70M next gen with average ticket a little above today.

What if, is where this all started, so not sure why you replied in the first place if you didn't want to join the what if game. You explained why PS4 wouldn't get as many users as I suggested they may, using PS3 as historical evidence, but that's not an apples to apples comparison. If PS4 sells many more consoles, it should end up with more subs, which you basically answer yourself right after.

Just because I may not agree with your Latin tongue scientific analysis of what if, doesn't mean I'm just moving on and turning a blind eye to what's already been brought up. I just don't agree in some cases and it doesn't seem like you or I were going to budge. Some of the conversation movement was initiated by yourself.

I missed that 64M was just active users. You're correct. I can't find much other than a few posts elsewhere that say last they heard it was around 17M-18M, but those posts were a few years ago, so where it stands now is anybody's guess since MS isn't being clear about many things. If we're going to use the last known official numbers, then XB1 has sold way less units than we assume it has.

Well you don't give anything away for cheaper than you have to at the start. You get what you can from who you can. Once you've grown a user base and have more control over the market, then you offer more options to keep growing. This would be one of the reasons to offer a cheaper package.

You mean if I don't stick strongly to historical evidence like you then we are unlikely to agree? Well I think it's pretty clear that I don't think the historical evidence in this case is near as useful as you think it is based on the hypothetical scenario.

You said they would have to do more work which they won't do. Getting people to pay $50 for 2-6 games, depending on the time period, along with offering them big deals on digital items, is less work then getting people to pay $25 without any games or deals? Why did they do more work then on the existing package?

Again, you're not taking into account what needs to be for this to make sense. XB is in a position right now where even if they cut their Live price in half, it's highly unlikely it's going to bring in many people because of their position based on PR. Instead, they've offered new separate services and offered deals there to get people on board. The money is still coming in, just from a different service. PS could do this as well instead of Plus tiers if they wanted to. There's nothing they have to do, I just didn't offer it as a suggestion earlier.

Well how much they were making off the hardware is questionable a couple years ago, and they need to make money, but like I said before, you don't offer anything for less than you can get for it based on your situation. That changes over time though and you end up forced to make it cheaper or you have to offer something else or charge more for what you already have.

Companies do want to maximize profit, but they can't ignore the competition. Many companies have fallen and some gone bankrupt because they took their customers for granted. It's give and take, and it's a balancing act, you just need to know what moves to make and when to move them to keep the scales even. Sometimes you have to be more generous, other times you can be more greedy.

The prices don't have to be exactly what I said they were, but the cheaper the base price, the more people who will be influenced to join, but again, it's a balancing act. There will be a point where it doesn't matter how much cheaper you make it, people just won't flock to it unless you go all in and make it free, and so you obviously don't want to go below that tipping point. If that point is closer to $40, then that's where it needs to be, if that's the case. Is it though?

Last edited by EricHiggin - on 23 August 2019

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