Pachter: PS Plus needs 2-3 million subscribers for PSN to profit

Sony may see some profit from PlayStation Plus initially, but the company will need 2-3 million subscribers before it sees black from PSN as a whole, Wedbush Morgan analyst Michael Patcher has claimed.

Speaking on the latest episode of his Gamestrailers show Pach Attack, the analyst compared the service to Xbox Live, which he also described as a slow starter until new services such as Netflix were introduced.

“Sony is already spending the money on PlayStation Network, so layering on a new group of users paying it for a service will be profitable,” said Pachter.

“PlayStation Plus will take a while to get up to the same level as Xbox Live and I think you will see around 1 million subscribers early on, which amounts to around $50 million in profit.”

Pachter continued: “What this means is the PlayStation Network as a whole will not become profitable, as I’m guessing it costs Sony about a couple-of-hundred-million a year to maintain. What Sony will be hoping is the new service drives people to download more movies and games and therefore bring in more money.

“I think for Sony to make a profit on the PlayStation Network, it will need at least 2-3 million PlayStation Plus subscribers within the next two years.”

Sony has so far only announced Automatic Updates as an extra service for PlayStation Plus, although there have previously been rumours of Cross Game Chat becoming a feature of the service.

PlayStation Plus was released at the end of June.

Here is the episode.

why ?

I would say "1 suscribers" would have been sufficient ;)

Sony needs to add FEATURES and not DISCOUNTS the whole time with PS Plus.

People pay for XBL because it's the only means of playing Online games with friends whereas PSN can already do that without Plus so for the majority of PSN owners, PS Plus is not really needed because all it is is basically a bunch of discounts.

Cross Game Chatting
Ability to Change PSN Names
Cloud Saving System
Make MMO Monthly Fees a part of PSN Plus

The above are just a few examples of some of the features PS Plus should intergrate so that it gives Gamers the reasons why they should subscribe for PS Plus. Remember they named it PlayStation Plus and not PlayStation Network Plus. Give Gamers features of the PlayStation and not just discounts on the PSN.

there is no cross game chat for Playstation Plus? I thought it was one of the main features...

This sounds like he is completely ignoring games sold on PSN.

With the games/DLC sold along with advertising, I'm sure they make the money back...

He is saying to support ALL PSN not just plus.

His estimate seems to rely to much entirely on other estimates - cost of running PSN, etc. - for my liking to be much use.

Really, this is just a guess.  At best a very losely informed guess.

I'm not saying PSN is profitable or not or how many PSN Plus Sony would need to make it profitable, but this really doesn't shed much light on the situation in my view.

What about HOME transactions?  Where do they figure?  What does PSN generate from transactions?  How much of the costs do they cover?

I'm not sure about the other stuff, but Sony has said Home is quite profitable, they just didn't release numbers. I wouldn't be surprised if Plus started profiting as a whole soon.

It really depends on where he gets his information from. Since this is his specialisation he is a much better source than any one person speculating on a forum somewhere. I do believe he is backed up by a statement I saw from Sony that PSN itself wasn't yet profitable, I think it was last year.

Didn't we have a figure of 600M a year for Xbox Live? If you make an assumption that the whole model is about half as much revenue based upon that motorcycle game developers statement you get about $300M, 30% of which is 100M. So hes probably going something like 100M revenue - 200M running costs (he probably quietly asked people in the know) = -100M per year which ought to be covered by a few million PSN plus subscribers.