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Forums - Sales - How much money is Sony losing with the PSN?

Bodhesatva on 30 June 2008
leo-j said:
@bodhesatva

In game advertisments are added along side some PSN games though, which also cover the cost.

I seriously doubt they are loosing any money at all.

You're almost certainly wrong, unless you can provide data to support your argument as I just did. I do think Sony may go into the black with home, however; there are some in game ads now (I've seen them to, I have a 60 Gig PS3), but the full push for in game advertising seems to be coming with Home.

That will be the deciding point at which we may know if PSN is a profit-leading enterprise or if its intended to be subsidized by Sony's other profitable components, perhaps even in the games sector.

 



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PIMP on 30 June 2008
Bodhesatva said:
dallas said:
The PSN is probably losing money and will keep doing so until it starts getting money from:

1. Movies
2. Advertising, which HOME would be especially good for as Sony will be running trailers in its theatre area, and they will probably bring in some kind of advertising for products that gamers like such as energy drinks ( a little Mountain Dew machine lol) , etc

 

 Yeah, I think Home advertising will be the key. I'll be interested to see how they implement it.

Many people in here seem disbelieving or even stunned that PSN could be losing  money; it's apparent that you haven't thought this all the way through. I've mentioned this many times and get virtually no response, which is usually a sign that people aren't listening, and apparently that is the case.

Infrastructures like PSN cost millions of dollars to upkeep. The bandwidth necessary is enormous, and server hardware needs to be purchased, maintained and serviced. Likely over the course of a year, PSN costs 200-300 million dollars to maintain and update, some of which is recouped by store purchases.

 

As a comparable example, consider Blizzard's online game, World of Warcraft. Last year, they made 550 million dollars in profit -- more than EA, Activision, Konami, Ubisoft, Midway, SCi/Eidos, Sega, and Capcom combined. But how much was their revenue? Approximately 1.2 billion dollars. Even putting aside 300 million dollars for future game development and taxes (this is a very conservative estimate, for those who don't konw), that puts server infrastructure for this game at 350 million dollars. 350 million, just for WoW upkeep!

At this point, the entirety of PSN is smaller than World of Warcraft, but it's growing quickly and needs to be upgraded. Again, I'd guess somewhere in the 200-300 million range.

@Million and lemmiwinks

It seems that even a mod agrees with me that PSN is losing money and the amount managing PSN will only continue to increase. It seems ppl like you are the blind fanboys and need to use a little common sense before posting or I suggest another website like SDF where your opinion will actually be the intellectual one.

 



DMeisterJ on 30 June 2008

Wow, I didn't think of it like that. And we don't really have any hard data off of sales on the PSN, so who knows how well games sell and don't.



d21lewis on 30 June 2008

I can't tell you what they're losing, but Sony is definitely missing out on a chance to make some profits. $20-$30 a year for the service isn't unreasonable, but SCEA already gives the service for free. The backlash for raising the price would be unprecedented!



Bodhesatva on 30 June 2008

With respect to the games division, Sony is likely in the following position:

Making money:

PS2 Hardware
PS2 Software
PSP Hardware
PSP Software
PS3 Software

Losing Money:

PS3 Hardware
PSN



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FishyJoe on 30 June 2008

I honestly don't even see how this can be discussed in the total absence of reliable data.



psrock on 30 June 2008
Bodhesatva said:

With respect to the games division, Sony is likely in the following position:

Making money:

PS2 Hardware
PS2 Software
PSP Hardware
PS3 Software

Losing Money:

PS3 Hardware

PSN

psp software

fixed

 



 Next Gen 

11/20/09 04:25 makingmusic476 Warning Other (Your avatar is borderline NSFW. Please keep it for as long as possible.)
CrazzyMan on 30 June 2008

They also made that qore thing,
which now will delay (probably) or maybe make sooner (i doubt) the relase of Naruto demo.
3$ per month, to get a demo for 2 weeks earlier.. and some people will pay.



Every 5 seconds on earth one child dies from hunger...

2009.04.30 - PS3 will OUTSELL x360 atleast by the middle of 2010. Japan+Europe > NA.


Gran Turismo 3 - 1,06 mln. in 3 weeks with around 4 mln. PS2 on the launch.
Gran Turismo 4 - 1,16 mln. with 18 mln. PS2 on the launch.

Final Fantasy X - around 2 mln. with 5 mln. PS2 on the launch.
Final Fantasy X-2 - 2.4 mln. with 12 mln. PS2 on the launch.

 

1.8 mln. PS3 today(2008.01.17) in Japan. Now(2009.04.30) 3.16 mln. PS3 were sold in Japan.
PS3 will reach 4 mln. in Japan by the end of 2009 with average weekly sales 25k.

PS3 may reach 5 mln. in Japan by the end of 2009 with average weekly sales 50k.
PS2 2001 vs PS3 2008 sales numbers =) + New games released in Japan by 2009 that passed 100k so far

DMeisterJ on 30 June 2008
psrock said:
Bodhesatva said:

With respect to the games division, Sony is likely in the following position:

Making money:

PS2 Hardware
PS2 Software
PSP Hardware
PS3 Software
PSP Software

Losing Money:

PS3 Hardware

PSN

fixed

 

Re fix'ed.



jenny on 30 June 2008

Everything about the PS3 is a financial nightmare. The PS3 software is incredibly expensive to make also. Did they even profit off of games like Lair, Heavenly Sword, Uncharted, or Ratchet and Clank when you add in the super expensive costs of advertising? The PS3 is the complete opposite of the Wii.