Dear PlayStation Fans: Trickle-Down Economics Isn't Real!

[DonFerrari]

Conina said:

DonFerrari said:

Except streaming didn't increase budget of movies in cinema and it is disputed that it damaged cinemas. The type of content that is viable for cinema is different than streaming as well as streaming services isn't exactly the market you would see SP as main choice for content provider (you don't see netflix buf costing the same to make as End Game).

Well, streaming increased the budget of many TV shows:

https://www.pricerunner.com/bo/most-expensive-tv-shows

And TV shows would be more analogous to GAAS type of games, episodic, than self-contained SP games. From all we know the theater have skewed between the "Marvel" movies and few other AAA blockbuster but other movies have seem less success.

Would we correlate GP increase in subscription with Sony games increasing in revenue? Again from what we can infer looking at ranks GP have removed revenue from games that aren't on the GP.

IcaroRibeiro said:

DonFerrari said:

Except streaming didn't increase budget of movies in cinema and it is disputed that it damaged cinemas. The type of content that is viable for cinema is different than streaming as well as streaming services isn't exactly the market you would see SP as main choice for content provider (you don't see netflix buf costing the same to make as End Game).

I didn't imply the budget for movies increased with streaming. What I meant is movies budget kept increasing because there was enough people to make them profitable. This was possible because cinema has no entry-cost besides the ticket price. It's also important to add that cinema and TV make fairly different experiences, so they aren't direct replacements for each other. Which streaming is increasing is the budget for TV shows, which can now be released worldwide instead of a limited amount of channels, very often paid and behind a limited amount of viewers 

While for gaming, there is no option for playing AAA games without consoles or fancy PCs meaning we need a entry cost for start playing, once we reach the absolutely limit of the market (and we are closer and closer to that) willing to pay for dedicated hardware the budget of games won't be able increase anymore unless more customers are reach in some way. Multiplayer games can rely on PCs becoming cheaper with time to accumulate mind-blowing numbers with time, that's why they are not in jeopardy. But single player games don't. The only way to increase the pool of customers for a single-player without compromising their AAA status is to allow more people playing them, here streaming can provide a opportunity to increase sales and keep the budgets growing. 

Sure companies won't chose to invest more money for less profit, that isn't even under dispute.

But the economics of SP on streaming can be easily seem to not match unless gaming would become obscenely bigger.

Let's say Sony releases 3AAA per year that currently have a pricetag of 70USD and sell 10M at that price. That is 2.1B in revenue per year on these 3 titles. Considering what is currently the model that is about 60USD per year for the "streaming/rental portion" of PS and GP. That would demand more than 30M subs just to subside these 3 titles that would perhaps hold subs for like 3 months. If you wanted similar level content to hold the service it would need 4x more so about 120M subs at least.

More likely is that people would sub for the 1 month when there is a game they are interested so pay 5-10bucks to play that game, so you would need 7 to 14 times more people joining on that month to cover the same revenue of it selling.

This goes back to what is currently accepted that GAAS, Multiplayer, episodic games, etc is more aligned with streaming.

Going back to the example of streaming for movies/series, etc. The quality and investment of series may have increased with Netflix, but blockbuster movies funded by Netflix and the like isn't anywhere near the level of investment and quality compared to titles that go first to cinema and later go to streaming to complement the revenue. So in the case of movies where you have the option of launching first in one, then selling disc, then streaming you have a different situation than let's say console aren't able to sustain the model anymore and it is streaming, you won't have multiple tiers of revenue stream.