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EricHiggin on 22 August 2019
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DonFerrari said:
EricHiggin said:

Well what about hardware entry price? PS4 left a bunch of money in your pocket in comparison and has led to higher sales in a much shorter period than PS3. Look at the PS3 vs PS4 total game sales (shipments) time period and clearly the PS4 has allowed for more software sales. Plus no doubt helps with that as well.

With there being around 37M subscribers, who's to say that with a cheaper Plus package next gen that it wouldn't increase subs dramatically? If 37M are willing to pay $60 per month, then you could probably double that number if the cost was only $25, leading to 75M subs at $25. Then let's be safe and say 12M at $50 per month, and 5M at $75.

That would lead to an overall increase in sub revenue by $700M dollars. Then you have to ask yourself, for those that decided to save $25 by going with the cheapest package, how many of them are going to take that savings and put it towards more PS hardware or software anyway?

If PS5 launches at $499, you are now in between PS4 and PS3 in terms of launch entry price, so it wouldn't be crazy to think PS would lower the basic Plus package to around $25 to make it more appealing to those buyers. You're also going to have a cheaper PS4 on the market for those who likely have been waiting for the price to drop because they have no other choice, and if you want to have a chance at a significant amount of them joining Plus, the base price will have to be cheaper.

The way I see it, is one way or another, the money will end up in SNY's pocket and will probably increase overall by hooking more people with a cheaper base Plus price.

Except in real world it wouldn't really happen like that.

Yes people had more money around, but the incread of 1500% didn't come from more money in the pocket because PS4 was cheaper than PS3 (even more because at the time PS+ launched PS3 was about 249-299 anyway or close to it). The increase came almost exclusively by putting MP behind paywal.

So if you want to do a real math on it, you won't have your subs doubling on half the price, plus another 12M (1/3 of current PS+) paying today price and more 5M paying 75 (3x what PSNow have today). This would put a sum of 92M subs that is very much unlikely.

More likely outcome, 25 sub for MP on a similar size userbase (100M) would get you perhaps 50M subs, then 2M subs for 50 usd to get discounts and the free games and perhaps 1M on 75. Total = 25*50+50*2+75=1425M versus today 37M@50 = 1850M. So you have 400M less revenue but needing yo service twice the userbase so increased cost.

Basically no significant amount would pick that saved money and use on other PS stuff because they don't do accountability of money and videogame budget, and even if they did, Sony would have to sell more stuff to see the same dollar.

You are painting an impossible scenario to say it will profit more. And I was generous to put 50M subs with the 25 less payment. Sony would probably lose 500M a year with your strategy. With XBL having a similar price to PS+ there is no way or reason for Sony to start with such a low price.

So if PS just adds stuff to the existing PS plus package and charges $75 or even $99, then people will just pay it since it's behind an even more expensive paywall and is the only option? If PS just put's PS5 behind a $599 paywall people will just pay it? Some will, many won't.

I do really think your mid and top tier numbers are way off. Maybe I'm a little high on the base numbers but I think you're much too low on the other two. If you look at Pro, the higher tier console, in which approximately 50M PS4's have sold since it's launch, and that 1 in 5 of them are Pro models, then there should be around 10M Pro's in customers hands. If you had 50M base subs, there should be around 10M people willing to spend more. You seem to think only 3M total will buy into the higher tier packages. That's not even taking into account the individuals who make it clear they would've bought another even more expensive PS4 upgrade and who want constant expensive PS5 upgrades.

Let's assume I'm being too positive and you're being too negative. If we meet in the middle with our numbers, PS still makes more money at the end of the day and they aren't really doing much more work for it. They have more base subs in which they aren't providing free games or deals to them. Maybe some deals but nowhere near as incentivising as the deals you would get with the mid or top tier package. Mid tier stays the same for the most part, and top tier adds some things like PS Now, in which case already exists, just not as a package. PS also wouldn't necessarily be selling more stuff, just different stuff. Instead of the majority on the base package getting free games, some would be spending that money on other software or hardware.

How many people will spend the saved money on other PS products? What if they put those yearly savings towards something like a PSVR(2) eventually and it blows their mind so they spend even more money on games for it because of a cheaper Plus package? How many people live for online and would finally be persuaded to sell their existing platform to buy a PS4 or PS5 for the online savings over time, along with the other reasons they very well may have?

PS has plenty of reasons to compete if they feel it will help their business overall. They certainly don't want to stagnate if the don't have to, and they don't want to risk losing customers to the competition. Just look at XB1 vs PS4. Why if XB1 was $499, did PS4 launch at $399? Why wouldn't PS charge the same as the direct competition? XB1 also has lacked exclusives, so why has PS pushed so hard and put so much money and effort into pumping out so many major AAA high quality exclusives? Why does Game Pass have $1 sales when it has little competition in the segment that MS has carved out for it?