Sounds pretty good in actual fact; if the free PSN game offered is one I'd have bought anyway then overall you'll in essence save a fair amount of money on that. As people have said, and as the OP says, as long as nothing free becomes premium, then by all means go for it, Sony.

i could see Sony go for the used games market like EA

every new game comes with a redeem code for free online play, if you want to play online with a used game, you need to buy a code.

Where's the money being made?

I have no ideas about the business model here, I'm just kinda guessing.

But, presumably, from the cost of a game on PSN the developer gets some and Sony get some.

So, as a developer, if someone downloads my game for "free" I would still expect to get my cut from that "sale" from Sony.

Sony would obviously get no cut cos there's no sale. Their cut comes from your PSN premium subscription.

So, pretending it's £50 per year that's £4.16 a month.

I can't imagine that £4.16 covers the developer's cut and Sony's cut of a downloaded game. Things get a bit blurry when you consider that people wouldn't've bought the game had they not subscribed, but it's fair to assume that if the main draw of this premium service is the free games then it's mainly gonna be the people who buy PSN games in the first place who'll be interested in signing up for it.

“There’s nothing in the premium package which will gimp regular PSN users.”

All I needed to know

I mostly go online to play games and buy the occasional game so chances are this wont be worth it. Your harddrive will just fill up with games you didnt want.

If this source is correct it would be amazing. Getting a free game every month is kind of ridiculous. I mean sure I've gotten maybe 4 or 5 free games from XBLA over the years, but one every month is crazy! If they include a bunch of extra features with this I'm not sure this subscription model would really help them make PSN profitable.

How much is that in USD?

Anyways, this is all a big IF since this is just a "source" leaking the information. Can't wait for E3!!

This would be nice, but VG247 is notorious for making up "sources" and outlandish rumours to go with them.

Well, if true that's a great plan.
Pay to play (especially for me who play online very sporadically) is a terrible deal.

This is the right way for online plans, imo.

This is going to get interesting...like the Wii leak...

I agree. If they did make a subscription that forced you to pay to play online, I'd probably go back to playing online on my pc only. It would be stupid.

This way seems like a clever solution.