Sony Buys Exclusives!

PR labels it “Incentives”…

By TWODOGSz

©2009 Aaron Bertinetti

When is an apple not an apple? Well apparently when Sony PR calls it an orange!

Every once and a while I have the pleasure of imagining a world where PR speak isn’t taken as gospel by the pathetic “I got a hard on for hardware” types and used in their incoherent, blindingly illogical diatribes about why their “hard on for hardware” is bigger than the other guys.

And just when I think it’s safe to duck my head into the horribly inappropriately named News 4 Gamers. THIS happens. Followed like a fly to shit by THIS.

You can work out what’s the shit and who the flies are, but like their counterparts that align with Microsoft or Nintendo, they have one thing in common… Blind faith.

If Sony said jump. They’d fight to be first. If Sony said fight. They’d jump in to be first. And if Sony said:

“[PS3 is] for consumers to think to themselves ‘I will work more hours to buy one’. We want people to feel that they want it, irrespective of anything else.”

Well yeah… you get the idea. And apparently so did Ken Kutaragi!

The last part is worth repeating: “We want people to feel that they want it, irrespective of anything else.”

I’d say mission accomplished Ken! You’ve earned your place alongside Microsoft’s Greenberg and Nintendo’s Yamauchi. And whilst each console’s respective fanboys are not representative of their larger user bases, the problem is they make so much god-damn noise they tend to drown rational gamers who enjoy one or more consoles out of the conversation.

And so here we are today…

Sony decides to match the development budget of self-published games in return for PlayStation exclusivity. You know just like Microsoft paid for exclusive DLC for GTAIV, Fallout 3 and Tomb Raider: Underworld. Or as Sony has also done with Mirror’s Edge. The only difference being that they’re locking up original titles in development for PSN by guaranteeing royalties that’ll turn the development budget into an annuity for developers that pays back over time.

Of course Sony will still take some cream off the top with their much reported bandwidth charges, but it’s nonetheless a clever idea that reduces the financial risk and costs to developers.

But the devils will be in the detail.

Will the guaranteed royalty rate be lower for those who opt in, to those who opt out? How low is the guaranteed royalty rate? Is the guaranteed royalty rate less than the average of publishing on multiple platforms? What are the normal royalty rates of publishing on Xbox Live, Wii Ware or Steam?

The short business answer is that Sony’s guaranteed royalty rate has to be lower than that of the normal rate, because otherwise all developers will apply for the scheme upfront which Sony will have to find deep pockets for or will be forced to reject applications of “promising” titles because it can’t afford it and hence will drive developers away from PSN and towards the next highest royalty rate on Xbox Live, Wii Ware or Steam.

Further Sony has to have a lower guaranteed rate, because otherwise Sony will be stuck with the full risk of knowing how to pick the MGS4 or LBP over the Haze or Lair whilst the titles are still in development. Given past experience, I’d suggest Sony, Microsoft and Nintendo are no more capable of that than yesterday.

And yet even with such risk mitigation, Sony will still risk guaranteeing royalties for future commercial flops. This will be almost immediately tested by the first funding recipient “Burn Zombie Burn!” And you can bet Sony will be watching its success as much as its competitors.

Most importantly, however, will Sony use the lower rate to exploit underfunded developers to increase their own royalty rates? What am I talking about? Well Sony could target financially strained developers who have no option but to opt in but who produce content that will generate high sales. Given the lower guaranteed royalty rate the developer receives a lower bite of the pie than normal, whilst Sony goes running off with a larger than normal rate piece.

It’s great business and a common practice with financial products. But it might not be so great for fledgling developers. No matter how Sony may spin it.

This also illustrates another conundrum. At what point does the risk and reward of exposure on multiple platforms outweigh the lower risk and reward of exposure on one platform? For well funded developers that’s likely to ensure the Pub Fund offers no incentive with a lower royalty rate and smaller audience than that of multiple platforms. Much like Capcom, Square Enix and EA with full retail games, the rewards of a much larger audience on multiple platforms far outweighs such a guarantee for mainstream developers who can afford their own development.

The scheme, euphemistically called the Pub Fund (as opposed to a “Slush Fund”), follows comments made to GamesIndustry.biz last year by Sony’s David Reeves, who said that whilst exclusive deals with publishers are probably a thing of the past, there’s scope for exclusive deals with developers.

Given Microsoft has made deals with developers Rockstar, Bethesda and Crystal Dynamics I’d say Sony and Microsoft wholeheartedly agree.

But of course that ignores the fact that Microsoft “buys exclusives” as opposed to Sony’s “incentives” which Sony’s Chris Eden was quick to jump on to fuel the flames stating “a really important thing to point out is that this is not first-party publishing, this is not Sony buying your product.” Of course Microsoft hasn’t bought the IP rights to GTAIV, Fallout 3 or Tomb Raider either, but that’s the deliberate and snide inference.

OXCGN has previously analysed the increasing move to exclusive DLC arrangements and the bigoted hatred bred by gaming executives. So feel free to read them.

But I think all rational gamers would agree that much like those who distort religion and strap bombs to their bodies, these idiots who strap PR spin to their backs and dive in like martyrs on an aeroplane deserve exactly the same fate…

Six feet under and preferably without dragging the rest of us into it!

http://oxcgn.com/2009/03/28/sony-buys-exclusives-pr-labels-it-incentives/

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LOL @ hypocrisy SONY

I remember SONY saying.....we do not need to buy exclusives & MS "buys" them in the past.

Anyways who cares....the Uncharted 2 LEAKED Video >> ALL!

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damage control?

Ironic...

Looks like Sony is desparate...

No big deal here. Just biz and end users are getting games right? Nuff said.

Wow, that guy really doesn't Sony.

Ummm...was there really anything to that article?

most of that was just handwaving and "look something could be going on". Granted it's talking about lowered royalty fees but really it doesn't give any specifics aside from stoking fanboy flamewars.


For me there is a fine line between what is ethical as far as exclusives. There is nothing wrong with a studio setting out with plans for exclusivity and releasing their product. I would like to play left 4 dead but I don't have a 360 but I will live. I do take issue with a company using devious means to to make a game go multiplayer and then making me wait a couple of years for the developers to finally catch up (looking at you FF13). I also think releasing an incomplete game and then exclusive DLC to complete the game is just fucked up.

Those are just my opinions. That being said, people seriously need to tone it down with exclusivity arguments. The are just games, there is no point to starting threads about how games are doomed after 2 weeks of sales

-Shrike

Sony call it whatever you want...just make sure MGS5 is PS3 exclusive

I never understood why people get all up in arms over an "exclusive" from a third party. Its not really buying an exclusive, in most cases its a developer going to a manufacturer and saying we have this great project that we are working on that we think will be great for your platform or complement your library. And then many times the manufacturer (or publisher) approaches a developer and say hey we have this great idea for a game or we need a game in a certain genre and we think you will be the best for the project then they hammer out what each company needs (ie money, exclusivity, marketing, IP rights, publishing rights).

A great example of this is for example Square Enix makes a number of great games that are not quite mainstream and really intended for more of a loyal small niche market (high risk). Perhaps you make a deal with MS to share part of the risk for these games and as a reward guarantee that their most lucrative IP will also land on your console. Without the shared risk perhaps many of these games never even come out.

I always expected SONY to do this, I always expect MS do it as well.  It's just what you have to do, and when it comes to gaming, well you need to give it all you got.

I remember when people talked about "MS cares about their fans, they give us exclusives, they give us what we want.  SONY doesn't give their fans anything."  Look at where the PS3 is at now, I wouldn't call it giving the fans -Nothing-.

But, business is business and SONY will do what they have to in order to keep in the game.  SONY knows what their doing and they also know they dived in the hot water.  Their not giving up, nor will they ever. 

MS did a great job at snatching the competition, they seemed to have slowed up a bit, but their not scared, though they should be.

Take a look at my Signature, it seems to be right on target.