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LudicrousSpeed on 20 May 2020
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only777 said:
Angelus said:

Because getting 60 bucks once or twice a year is less than getting 10-15 bucks per month every year. If you feel your service offers a heightened quality on such a level that this isn't suitable, you can always hike up the price a couple bucks. I hope you don't really expect me to explain to you in detail the math of why long term subscription models are more attractive to every branch of the entertainment industry than one time purchases here and there.

You're incredibly naive if you think GP is going away if/when MS has a stronger market position, or that Sony isn't going to be making a concerted effort to move in the same direction in the future.

MATHS TIME!

So let's compare a made up AAA game.

Game pass has 10 Million users.  Source: https://www.theverge.com/2020/4/29/21242004/xbox-game-pass-10-million-subscribers-microsoft-q3-2020-earnings

Let's say 70% is paying full price of $10 a month.  Many users are using the service through $1 deals, etc. This is $70,000,000 per month. so $840,000,000 in a year.

Let's say this Sony sells 10 million copies in a year at $60 a copy. That's $600,000,000‬.

So it looks like Microsoft make more money right? Wrong.

Sony make another AAA game in the same year and that's ANOTHER $600,000,000‬. So now we have $1,200,000,000‬.  Microsoft however are still going to earn $840,000,000 in the year as both their AAA games are included in one price.

There are five obvious problems with this math.

1. Sony doesn't get a full $60 on games sold unless they are digital. Last time I saw this sourced, Sony would profit about $35 of each $60 retail copy.

2. Sony (and MS) games don't stay full price for very long. There is no way a Sony game is going to remain at $60 for an entire year. The retail price will be slashed by 30-40%, which means Sony's cut also gets smaller.

3. Virtually all of PS4's high selling Sony games were bundled, which means zero retail revenue for Sony from that title. Uncharted 4, Spider-Man, God of War, Horizon, LoU HD, etc. So assuming 10 million sales for a PS4 title is a stretch.

4. Microsoft still sells all of their games at retail. It's not like they only get revenue from GamePass.

5. Even if you want to assume 10,000,000 sales for a PS4 title, they aren't going to come in one year. Last I remember, Sony has four or five ten million+ sellers on PS4 and they are all years old. Now they may have more now, idk.

There is a reason these companies are embracing services. I know your sig says MS wants to make money but the fact is they all do. There's a reason Sony made PS+ required for online. There's a reason they offered downloads on PS Now after GamePass and there's a reason they've been adding bigger games and lowering the price. Like MS, they know this is a big revenue possibility.

Also, MS really hopes PS Now takes off because since Sony came to MS for Azure, MS will be making money there too.

Last edited by LudicrousSpeed - on 20 May 2020