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Forums - Gaming Discussion - Phil Spencer: Sony buying third party games, all to do with money, not market share

S.T.A.G.E. said:
Azzanation said:
So many of you have no business degrees. Look when your selling a product to someone, market share has nothing to do with it. 25m PS4s vs 13m XB1s means little. Both are recognised systems and some games sell better even on consoles with less sales. If every PS4 gamer were to buy the same game then yes you have an argument however games sell a few million at best on either system.

Its all to do with money. XB1 still only has half the user base then the PS4 but look at all the exclusives coming out, if market share was the reason then XB1 would have no exclusives or timed exclusives.

The sad part is fanboys believe companies go with other companies because they love them. Money talks. Sunset Overdrive and Titanfall didn't release on Xbox because they love MS, they released because MS paid them. Just like PS exclusives. Sony pays them and that's there focus this gen.


You don't need a business degree but rather common sense to know that marketshare gives a person sway that money cannot buy. Besides...Sony couldn't outbid Microsoft if they tried. Done deal.

Microsofts biggest deals from last gen came from moneyhatting which was allowed because of their marketshare.

How hard is it to understand that business is all about money and relationships. Devs don't just make games for whats hot, they make games depending on the deals first. If they cant find a good enough deal they will go elsewhere or use there foresight on which machine they prefer.

Example - A dev who makes MMOs will obviously make a game for PC due to the audience it attracts however if they find a good enough deal, that MMO will cross over to a different system.

Marketshare means little because machines like the Gamecube had plently of 3rd party support and that was agasint the PS2 which in terms of sales was on another level. Why would devs make games for the Gamecube if the marketshare is such a big factor in your eyes? Because of deals, all companies do it, just like Sony, and Microsoft. You want something, you have to pay for it.



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S.T.A.G.E. said:
Azzanation said:
So many of you have no business degrees. Look when your selling a product to someone, market share has nothing to do with it. 25m PS4s vs 13m XB1s means little. Both are recognised systems and some games sell better even on consoles with less sales. If every PS4 gamer were to buy the same game then yes you have an argument however games sell a few million at best on either system.

Its all to do with money. XB1 still only has half the user base then the PS4 but look at all the exclusives coming out, if market share was the reason then XB1 would have no exclusives or timed exclusives.

The sad part is fanboys believe companies go with other companies because they love them. Money talks. Sunset Overdrive and Titanfall didn't release on Xbox because they love MS, they released because MS paid them. Just like PS exclusives. Sony pays them and that's there focus this gen.


You don't need a business degree but rather common sense to know that marketshare gives a person sway that money cannot buy. Besides...Sony couldn't outbid Microsoft if they tried. Done deal.

Microsofts biggest deals from last gen came from moneyhatting which was allowed because of their marketshare.

More of a combination between Marketshare and pretty much unlimited bags of money.



Azzanation said:
S.T.A.G.E. said:


You don't need a business degree but rather common sense to know that marketshare gives a person sway that money cannot buy. Besides...Sony couldn't outbid Microsoft if they tried. Done deal.

Microsofts biggest deals from last gen came from moneyhatting which was allowed because of their marketshare.

How hard is it to understand that business is all about money and relationships. Devs don't just make games for whats hot, they make games depending on the deals first. If they cant find a good enough deal they will go elsewhere or use there foresight on which machine they prefer.

Example - A dev who makes MMOs will obviously make a game for PC due to the audience it attracts however if they find a good enough deal, that MMO will cross over to a different system.

Marketshare means little because machines like the Gamecube had plently of 3rd party support and that was agasint the PS2 which in terms of sales was on another level. Why would devs make games for the Gamecube if the marketshare is such a big factor in your eyes? Because of deals, all companies do it, just like Sony, and Microsoft. You want something, you have to pay for it.

I just said its about money and relationships, what you guys are trying to deny is the politics of business, which is essentially what Spencer is alluding to. He's saying moneyhatting when it should've been that easy for Sony last gen. Sadly it wasnt because they had less marketshare because Microsoft cut it down by getting political favor with a years head start. Microsoft knows how the game is played and they risked the quality of their launch consoles over it. Again...if Sony wanted to moneyhat they should've been able to do it more efficiently last gen by that logic of his. Seriously...hes baiting people to  fall into a lie.



S.T.A.G.E. said:
Azzanation said:
So many of you have no business degrees. Look when your selling a product to someone, market share has nothing to do with it. 25m PS4s vs 13m XB1s means little. Both are recognised systems and some games sell better even on consoles with less sales. If every PS4 gamer were to buy the same game then yes you have an argument however games sell a few million at best on either system.

Its all to do with money. XB1 still only has half the user base then the PS4 but look at all the exclusives coming out, if market share was the reason then XB1 would have no exclusives or timed exclusives.

The sad part is fanboys believe companies go with other companies because they love them. Money talks. Sunset Overdrive and Titanfall didn't release on Xbox because they love MS, they released because MS paid them. Just like PS exclusives. Sony pays them and that's there focus this gen.


You don't need a business degree but rather common sense to know that marketshare gives a person sway that money cannot buy. Besides...Sony couldn't outbid Microsoft if they tried. Done deal.

Microsofts biggest deals from last gen came from moneyhatting which was allowed because of their marketshare.

It seems they did outbid them tho. Between the two consoles, if 1/3 of the game that sells millions of copies come from one of the consoles it's not small potatoes. It's common sense to think you don't get exclusive marketing deals for free in situation like this, Activision sure wants to maximize their profits and sales on both consoles. Of course I believe it might be a bit cheaper for Sony to seal this kind a deal because of more popular console, but in the end it's about money and who pays the most.

But in the end it's all just our assumpions of how these deals are made and what these companies are planning.



KiigelHeart said:
S.T.A.G.E. said:


You don't need a business degree but rather common sense to know that marketshare gives a person sway that money cannot buy. Besides...Sony couldn't outbid Microsoft if they tried. Done deal.

Microsofts biggest deals from last gen came from moneyhatting which was allowed because of their marketshare.

It seems they did outbid them tho. Between the two consoles, if 1/3 of the game that sells millions of copies come from one of the consoles it's not small potatoes. It's common sense to think you don't get exclusive marketing deals for free in situation like this, Activision sure wants to maximize their profits and sales on both consoles. Of course I believe it might be a bit cheaper for Sony to seal this kind a deal because of more popular console, but in the end it's about money and who pays the most.

But in the end it's all just our assumpions of how these deals are made and what these companies are planning.


This is something we've all been witnessing for years if we've been paying attention. Dude....if a game is on two consoles and sells 2/3 of its units on one platform opposed to the other, it just means the primary fanbase is where the majority of units sold resides. Keeping a keen eye on marketshare makes it easier for publishers to take less risk in going exclusive and cutting out potential buyers from another platform (pending a hefty fee for going exclusive in the first place). 

Let me ask you a question. If the PS2 had not sold as many consoles as it had from the start (coming of the last gens dominant victory) that Rockstar wouldn't have accepted Sony's moneyhat? If Sony had competition and the sales were more evenly spread, the answer is hell no (unless they were essentially paying for the development itself). 

The place where the largest potential dollars might come from is a large incentive to go exclusive (especially if they are dominant).

Read this....its an insider talking about how much valuable beating Sony to market is to Microsoft. This includes skimping on the development costs to rush the 360 out to gain business leverage with third party and gain marketshare. Why? Marketshare matters.

http://techreport.com/news/13974/microsoft-insider-xbox-360-was-rushed-to-market



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KiigelHeart said:
Protendo said:

I hope gamers realize if Marketshare doesn't matter, he just said that Microsoft is not letting the Xbox division tap into the warchest. So much for those infinite powers of the Microsoft warchest rumors. That leaves more doubt than marketshare.

You can't have it both ways. Either market share matters, or Microsoft is pulling the reins on the Xbox divisions budget.

Or maybe they never spent or planned on spending infinite amount of money on Xbox division. They're doing business after all. Strong lineup for holidays and couple of deals made + plans on focusing 1st party.. Maybe no need to pay alot for COD.

I guess they blew through their allowance with Minecraft 



There's only 2 races: White and 'Political Agenda'
2 Genders: Male and 'Political Agenda'
2 Hairstyles for female characters: Long and 'Political Agenda'
2 Sexualities: Straight and 'Political Agenda'

S.T.A.G.E. said:

 

Let me ask you a question. If the PS2 had not sold as many consoles as it had from the start (coming of the last gens dominant victory) that Rockstar wouldn't have accepted Sony's moneyhat? If Sony had competition and the sales were more evenly spread, the answer is hell no (unless they were essentially paying for the development itself). 

 


I've no idea how many consoles sony and MS had sold, but is it safe to assume that gap was much higher? Also I've never said marketshare doesn't matter at all, everyone can see that console that sold 1000 units  for example isn't in a position to negotiate deals against console that sold 100 million units :P But my question to you is, would Rockstar accept Sony's moneyhat with 24 vs 13 million units sold and how much $$$ Sony would have to pay to make next GTA exclusive?

Interesting article btw. Not very surprising tho that companies want to dominate marketshare, but MS had very questionable methods of doing so if that article is true.

And for ArchangelMadzz, yeah I'd imagine after Minecraft deal they're not too keen on throwing money everywhere. 1st party, 3rd party, exclusive deals.. They have to let something go or profits won't even cover the loss I quess.



Azzanation said:
S.T.A.G.E. said:


You don't need a business degree but rather common sense to know that marketshare gives a person sway that money cannot buy. Besides...Sony couldn't outbid Microsoft if they tried. Done deal.

Microsofts biggest deals from last gen came from moneyhatting which was allowed because of their marketshare.

How hard is it to understand that business is all about money and relationships. Devs don't just make games for whats hot, they make games depending on the deals first. If they cant find a good enough deal they will go elsewhere or use there foresight on which machine they prefer.

Example - A dev who makes MMOs will obviously make a game for PC due to the audience it attracts however if they find a good enough deal, that MMO will cross over to a different system.

Marketshare means little because machines like the Gamecube had plently of 3rd party support and that was agasint the PS2 which in terms of sales was on another level. Why would devs make games for the Gamecube if the marketshare is such a big factor in your eyes? Because of deals, all companies do it, just like Sony, and Microsoft. You want something, you have to pay for it.


Are you for real suggesting that on a market with a leader with 100M Sales against 10M the cost of exclusivisity would be the same?



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."

its always money and market share.
If you have more market share, you dont have to pay as much money. Thats it.

Ill explain by using an example:
There is the new titel "AAA" and both MS and Sony want to make it exclusive.
The production cost of the title are 50Mio Dollars.
They predict that the title will be bought by 10% of all console owners.

Example Ps4 + xbox one release:
1,3mio xbox one and 2,5mio ps4 sales =3,8mio sales. Profit per sold unit = 20 dollar = 76 mio dollar. (-50mio Dollar production cost = 26 mio dollar total profit)

So if sony want to get the title as a exclusive, 1,3 mio xbox sales would lack.
2,5 mio ps4 sales. profit per sold unit = 20 dollar = 50mio dollar.
Because of the lack of an xbox one version, development costs will drop 10mio dollar (porting costs and co).
So to make it attractive for the developer to release the game exlcusive for sony, sony have to pay x.

Profit 2,5mio ps4 sales + 10mio cheaper development cost + X > 76 mio dollar. == X=> 16 Mio dollar
So Sony have to pay more then 16mio Dollar to get exclusive rights.




Now Microsoft
Exclusive for microsoft = -2,5mio Ps sales. = 1,3 Mio XBox one (20 dollar profit per sold unit) = 26Mio dollar.


26 Mio Dollar + 10 Mio dollar (cheaper development without ps4) + x > 76 mio dollar. == X => 40mio dollar
So Microsoft need to pay more then 40 mio Dollar to get the same title exclusive.



Sony need 16 Mio; MS 40 Mio.
Both still have to pay. But the amount will vary, depending on the market share.



WC4Life said:
IamAwsome said:

I honestly don't think so because like I said, CoD has gotten so big that the game will sell a lot on both consoles either way. I highly doubt they care at all which stage the game gets shown on, just as long as someone else pays for the marketing. I also doubt it was any easier for Sony to get the deals. Signs point to MS having a 5 year CoD deal that they didn't renew. 


I'd agree if it was still last-gen but not current-gen. The reason is Europe and ROTW. In NA it does not matter so much whether COD is PS4 or XBO since both have a lot of presence. However the situation is completely different in Europe and ROTW compared to last-gen. X360 actually had significant presence in these territories but current-gen XBO has lost marketshare so much that in many countries COD-marketing would go to waste completely. The amount of exposure COD-franchise will get by teaming up with PS4 is on a totally different level worldwide. Also Activision wants to sell as many DLC as possible and as fast as possible. Activision surely don't want to delay majority of userbase to purchase DLC, they want to take their money right away. This of course assumes PS4 will have the majority and I strongly believe it will because the install base difference is so huge now.

Then there is another point which is not related to marketshare. Halo 5 is coming and MS will give H5 gigantic push. COD-marketing being XBO would compete directly with H5. Now MS can use the saved COD-marketing money to promote H5 instead.

This is a good post. I've never thought of this from a European's perspective.  I think I do sort of understand the marketshare arguement for European countries now. So COD isn't huge in Europe like it is in NA? I guess the marketshare arguement depends on the game. It makes me wonder why EA still markets FIFA on Xbox despite the game selling a lot more in Europe and on PlayStation.