i hear what you are saying and it sounds logical and plausible but i'm not sure i buy it either.

from personal experience...  i'm not buying less games.  ps+ are all old games and i haven't found myself once not buying a game because i "felt confident" it was going to come to ps+.  if anything my actual spending is a bit higher because  i'm buying more dlc for games i never expected to want but then fell in love with. 

more importantly, i've been watching the software tracking for ps3 and 360 since ps+ release.  yes, ps3 software sales have gone down but in exact proportion to 360.  i feel like that's compelling evidence that ps+ isn't killing software sales.   and, at least for sony, i think it has other winning effects.  i've heard of some ps3 owners with no desire for a vita have a change in mind due to games the already "own" for the system.  also,  i'm far less likely to "jump out" to another system with the upcoming next gen.

anywho, there are so many factors it is hard to truely decide on the overall impact.  but i feel like it is good business overall.

I think it's a good deal for third-party publishers and Sony both.

Let's use Borderlands as an example. At the point in its life-cycle that Borderlands appeared on PS+, it had probably stopped selling at retail in any meaningful way. The only way copies Borderlands would move would be the $5 sales on Steam--which it had, more than once. Console sales, however, had probably stopped. Moreover, the copies that had already been sold to brick-and-mortar were just that, already sold, which means Gearbox wasn't going to make more money from them unless more copies were ordered. At a certain point, the profit earned from selling cheap physical copies is very, very low after all parties take their split.

In that regard, cutting a deal with Sony almost certainly made more money than the trickle of sales Borderlands would see otherwise, not to mention the stray DLC purchases. In addition to that, there is also the way the game appearing on PS+ as a "free" game promoted the franchise and likely led to higher sales for Borderlands 2. Think about it, isn't cutting a little off an already cheap game worth selling more sequels at $60?

As for Sony, the real value for them are the discounts. Again, Steam is a good example. They strike a deal with the developer/publisher where they both take less profit per sell, but that loss on margins is more than made up for in volume. Unfinished Swan, for example, rocketed back up to the top of the charts when it had its turn at a discounted price. For small developers, it's also a great way to build your fanbase for future projects. More people playing your game means more people will like it and possibly become interested in your next project.

I also don't think the "people will wait and spend less money on new games" argument holds much water. First, if people really want a game, they aren't going to wait a year for the -chance- that it might appear on PS+. If they're waiting, then they're probably waiting until it's at bargain bin level, in which case, see above. The idea that someone with PS+ might not buy new games as often has a bit more merit, but I think the impact would be minimal. We only get a couple of new games a month and, more often than not, even if a member likes both, which is probably rare, I doubt those two games are going to keep someone occupied for weeks at a time to the point where they skip a new game they wanted.

The ultimate margins might be slim, but I think it's a profitable system all the way around. More importantly for Sony, it's a deal that fans like paying for rather than feel forced to pay for. Members feel like they're getting a good deal and thus end up as happy customers and happy customers are invaluable.

This is where the greatness of PS+ really lies.

It's a plan that rewards the customers that purchase the most content. And, more importantly, it's totally optional.

I hope this model catches on. I think it already has with the "Deluxe Digital Promotion" on Wii U.

I think PS+ is profitable. It gives us older games for free, which is tempting us to buy the DLCs. I bought DLCs to some games that I wouldn't buy in the first place, let alone the DLCs to these games, so the developers got money they wouldn't be getting otherwise.
Also getting the pricecuts made me buy a couple of PSN games I probably wouldn't be buying for the normal price. If anything, it makes me not buy used games, cause I'm getting them from PS+ for free. I don't think PS+ is competing with new games.

For Vita - Uncharted is a great magnet, Gravity Rush didn't sell anyway (unfortunately), so isn't much of a sacrifice. Remember that to get these games you have to buy a big memory card and suddenly PS+ on Vita becomes profitable.

All in all I think it's a briliant thing. It gives some money to Sony, makes used games less attractive, encourages us to buy DLCs and PSN games we wouldn't be buying otherwise. There is no doubt in my mind that it is profitable for both Sony and 3rd parties.

I haven't read about that particular promotion but Nintendo would be wise to increase the value of its online services.  It might put Microsoft in a difficult position if they continue with the Silver/Gold model.  I think the landscape is going to alter somewhat over the course of the coming generation and Nintendo needs to stay more up to date than they did with the Wii.  Falling behind more on online functionality could be disastrous.  Even if it's less ambitious than PS+, I think Nintendo doing something to give more value to customers, even if it's only on digital-only eShop games, would help a lot.

=p. In all those years on Vgchartz I read a lot of 'Sony makes profit on every PS3 sold, Sony is making profit on this;..And that;..' and every time they post a loss.

Sony is for sure not making a lot of profit with Ps plus. Every discount ends up with a low margin of profit for Sony. I am pretty sure that they have contracts that they pay around 5$ bucks for every game downloaded (red dead/just cause 2/ borderlands).

It is just sony's way to create better relations with the devs/publishers that is also why most of the 'free' games are made in the Western market.

And ofcourse trying to establish a bigger community on PSN. It is working because you now exactly get fans who come up with idiot comments as

'Wow I only have to pay 50 $ to get free games' Then again I only had to pay 400$ and Samsung gave me a free tv o_o!

as the owner of the platform Sony doesn't make money by people buying stuff, they make money by people adding money to their psn wallets

From my experience and many friends' reports, we are spending MORE after subscribing for Ps Plus.

They mostly give away free games that have DLC, or a sequel is incoming. Many people buy DLC they otherwise wouldn't.

I lost count of how many friends bought Borderlands 2 and Borderlands DLC after receiving Borderlands 1 for free.

So I guess it ends up turning a profit.

As for the Vita, yes, many of the best games are available for free but people will still buy DLC or other games they want. I wouldn't have purchased Uncharted or Wipeout, for example. Despite having a big Vita backlog thanks to Ps Plus, I still bought all the games I wanted (SF x TK, Ragnarok, etc). I have 20+ Vita games, yet I'll be buying Dead or Alive 5+ on day one, and so on. Ps Plus does not influence my buying habits unless they give exactly the game I want for free.

So if I buy something with my creditcard on PSn they don't make money? Was their even some thing like a PSn wallet before 2009?  I remember that it was a big deal that sony finally announced the PSn cards/vouchers =p.

Exactly, my 16GB memory card is not nearly enough for my own games (I own only digital ones) and PS Plus games. Many players will be forced to delete games to play new ones or simply go buy more mem cards.