How much money is Sony losing with the PSN?

[cwbys21]

Bodhesatva said:

dallas said:
The PSN is probably losing money and will keep doing so until it starts getting money from:

1. Movies
2. Advertising, which HOME would be especially good for as Sony will be running trailers in its theatre area, and they will probably bring in some kind of advertising for products that gamers like such as energy drinks ( a little Mountain Dew machine lol) , etc

 

Yeah, I think Home advertising will be the key. I'll be interested to see how they implement it.

Many people in here seem disbelieving or even stunned that PSN could be losing money; it's apparent that you haven't thought this all the way through. I've mentioned this many times and get virtually no response, which is usually a sign that people aren't listening, and apparently that is the case.

Infrastructures like PSN cost millions of dollars to upkeep. The bandwidth necessary is enormous, and server hardware needs to be purchased, maintained and serviced. Likely over the course of a year, PSN costs 200-300 million dollars to maintain and update, some of which is recouped by store purchases.

 

As a comparable example, consider Blizzard's online game, World of Warcraft. Last year, they made 550 million dollars in profit -- more than EA, Activision, Konami, Ubisoft, Midway, SCi/Eidos, Sega, and Capcom combined. But how much was their revenue? Approximately 1.2 billion dollars. Even putting aside 300 million dollars for future game development and taxes (this is a very conservative estimate, for those who don't konw), that puts server infrastructure for this game at 350 million dollars. 350 million, just for WoW upkeep!

At this point, the entirety of PSN is smaller than World of Warcraft, but it's growing quickly and needs to be upgraded. Again, I'd guess somewhere in the 200-300 million range.

I don't think you thought that through all the way to the end yourself.  Blizzard may have huge server and bandwidth up keep, but that is because for once they didn't make the best game possible.  Guild Wars has well over 1 million accounts and after being badgered about population levels at the end of last year one of the cofounders for Arena Net said that population had never been higher.  In last years financials, NCSoft said that Arena Net made 24 million dollars in profit, not bad for considering that they don't charge for online.  Hell, Guild Wars can be played on a dial up modem yet Diablo 2, which also has free online, suggested on the box to have at least 28.8 kbps internet for smooth play.  All online play outside of MMOs and xbox live are free so I don't think server costs and bandwidth are as big a deal as they are made out to be, if the developers put the time that is required into the code.