PlayStation Plus Will Be Profitable, Says Pachter

[Logan Westbrook]

PlayStation Plus Will Be Profitable, Says Pachter

Michael Pachter believes that Sony's new subscription service will make money, but that it'll take time for PSN to start to pay for itself.

After a lot of speculation and rumor, Sony formally announced its premium online subscription, PlayStation Plus, at E3 earlier this year. Wedbush Morgan analyst Michael Pachter believes that PS Plus will be a good thing for Sony, but it will have to grow before it starts to absorb the cost of Sony's online network.

Speaking on his Pach Attack show on Game Trailers, Pachter was asked if he thought that PS Plus would be profitable. He replied that PS Plus couldn't help but be profitable as it was essentially the same service that Sony already offered, but with a fifty dollar price tag attached. He said that PS Plus didn't require any further outlay by Sony, so that the million subscribers he predicted in early stages of the service would translate into $50 million of incremental profits for the company. He said that he believed that Sony expected PS Plus to drive more movie and game downloads, but that it would take around 2-3 million subscribers to cover the "couple of hundred million dollars" that he estimated the PlayStation Network cost to maintain.

While there are a few nitpick-y points you could make about Pachter's answer - not every penny of the subscription fee is profit, for example - the essence of what he's saying is sound. It seems like much of the infrastructure required to get PS Plus up and running already exists, so the costs involved in the operation of the service can't be much higher than Sony is already paying. You could certainly make the argument that Sony has lost out on revenue from the games and other content that subscribers get access to, but again, the actual cost of delivering that content will be relatively low, and there's no guarantee that a subscriber would otherwise have bought it. It's the difference between definitely getting fifty bucks, versus maybe getting $200 but maybe getting nothing at all.

It also seems pretty likely that the service will get more benefits as time goes on, much like Xbox Live did with things like Netflix and Facebook integration, which will make the service even more attractive, and generate more subscriptions.

Source: Game Trailers [http://www.gametrailers.com/video/episode-126-pach-attack/702241]


Permalink

 

[oranger]

I dunno about other people, but I barely use the PS network, and even then, I only bought the DLC for borderlands (if it had've come in disc form I'd have bought it that way instead though).
I just cannot justify paying money for aesthetic changes to a game I will most likely be done with soon, or buying things that were chopped out of a game and sold separately.
When the PSN is not loaded with shovelware and crap DLC, then maybe I will consider subscribing.

 

[Credge]

I use the PSN a decent enough amount but PSPlus just doesn't have anything. It's not required and offers pretty much nothing, so... why bother.

 

[Jared]

Its pretty much like everything Sony seems to do, starts off bad, and builds up, eventually making them money

 

[SaintWaldo]

It also seems pretty likely that the service will get more benefits as time goes on, much like Xbox Live did with things like Netflix and Facebook integration, which will make the service even more attractive, and generate more subscriptions.

It seems fair to point out that the only thing keeping back FREE Netflix integration for ALL PSN members is the contract MS forced Netflix to agree to [http://www.joystiq.com/2009/10/26/netflix-ps3-disc-must-remain-in-system-until-2010-update/]. As it stands, the disc on PS3 is still FREE.

It also seems fair to point out that the PS3 has had Facebook integration since last year [http://techcrunch.com/2009/11/18/facebook-ps3/], for FREE.

Let's do compare apples with fruit of a similar type, please?

 

[Sixties Spidey]

In what way? It's just paying to be a first class member. More people give a shit about playing online.

 

[Logan Westbrook]

Let's do compare apples with fruit of a similar type, please?

Before I do that, how about you calm down first? Those were just some examples of services that were part of an Xbox Live Gold Subscription, and I'm not sure how you took it to be an attack on PSN.

 

[the_pleasure_is_mine]

It also seems pretty likely that the service will get more benefits as time goes on, much like Xbox Live did with things like Netflix and Facebook integration, which will make the service even more attractive, and generate more subscriptions.

It seems fair to point out that the only thing keeping back FREE Netflix integration for ALL PSN members is the contract MS forced Netflix to agree to [http://www.joystiq.com/2009/10/26/netflix-ps3-disc-must-remain-in-system-until-2010-update/]. As it stands, the disc on PS3 is still FREE.

It also seems fair to point out that the PS3 has had Facebook integration since last year [http://techcrunch.com/2009/11/18/facebook-ps3/], for FREE.

Let's do compare apples with fruit of a similar type, please?

Wait wait wait wait wait....

"Netflix members and PS3 owners have really wanted a way to instantly watch movies and TV episodes streamed from Netflix via the PS3 system. The instant streaming disc represented the fastest and easiest way to let them do this."

Yes sounds really forced.

"Is releasing the PS3 application on a disc required by an exclusivity agreement with Microsoft?

The Netflix agreement with Sony for PS3 is consistent with the terms of our partnership with Microsoft for Xbox 360. Our goal is to give members the opportunity to instantly watch movies streamed from Netflix via the widest variety of Netflix ready devices. All of our partners are aware of our goal."

At least read the evidence you're posting... this doesn't say what you implied it did.

 

[rees263]

As far as I'm concerned PS Plus offers nothing I'm interested in so for now I will abstain. If Sony delivers on its promise to add more features then I will certainly be willing to consider it in the future.

I also think it's interesting that people argue about how netflix is an important feature of a console since half the world's console owners can't get it anyway.

 

[Jumplion]

PS+ looks very interesting for me and most likely I will purchase a year subscription. It will take some for the features to really start rolling in value, but personally I think that if you get 4 "free" games for just $50 a year, a cost that is less than Xbox LIVE for a year (unless you include the free 3 months initially), why wouldn't you download whatever free things you get? 'Specially the avatars/themes/add-ons (unless you don't have the game) since those will stay with you forever.

Also, for those of you who say that "you're just paying to rent the games!", if you get to rent a game for a whole year for just $50, where usually $50 total would be a late fee, and you still want to play it after a year then just buy the game.

 

[SaintWaldo]

Let's do compare apples with fruit of a similar type, please?

Before I do that, how about you calm down first? Those were just some examples of services that were part of an Xbox Live Gold Subscription, and I'm not sure how you took it to be an attack on PSN.

I'd like to know where I wasn't calm. When interspersed with lower-case words, caps often indicate only emphasis, not volume. edit: Also, I said please. I find it rude to imply I'm un-calm when I went out of my way to use polite words, politely.

I didn't say you were attacking PSN. I was merely pointing out that you were making what I think is a weak comparison. Pointing to already existing FREE services on PSN that only exist on PAID XBox Live as the sort of thing that would come to PSN if it were subsidized by PS Plus seems a pretty backwards way to imply payment leads to features.

Another way to phrase this: If it needed a paid level to add features, why does PSN have FB and NetFlix already?

All I'm really saying is there might be better things to point at that support your point.

 

[oranger]

I also think this whole thing is a bad idea. If sony was losing money on their network, they could have sold a little advertising to make up for it.
If they weren't losing serious money, then this is just a cash grab, and an ugly one.
Either way, this doesn't bode well...the free online gaming is one of the reasons I bought the ps3, and probably the same can be said for most other owners of the system as well.
I do NOT want to have to connect to private networks and all the hassles they bring with them.

 

[shirin238]

I may consider subscribing at some point, but right now my PS3 is at my mom while I'm 13 km away trying to pass my resits.
So there is no point at worrying now.

 

[kaizen2468]

Why does everyone care what this guy says?

 

[Antari]

Hopefully Sony listens to him and it does so much damage to their bottom line that they take him to court. I could care less about Pachter and his show. Hes useless.

 

[Andronicus]

The fact that people will actually agree to pay money for this useless service is dumbfounding. There is nothing there to benefit people who already use the PSN store; it's sole purpose is to get people spedning more of their money on PSN. The only problem is, once they finally realise that it's better if they just buy thier own stuff from PSN, they'll be reluctant to do so as they'd already have a large amount of content on their PS3 that they'd instantly lose. After spending all that money, it all becomes worthless in the end.

PSN+ is a scam. They lure you in with the false claim of "free" games, and once you realise you're being scammed, it's too late to opt out without losing everything you've already paid for.

 

[Jumplion]

The fact that people will actually agree to pay money for this useless service is dumbfounding. There is nothing there to benefit people who already use the PSN store; it's sole purpose is to get people spedning more of their money on PSN. The only problem is, once they finally realise that it's better if they just buy thier own stuff from PSN, they'll be reluctant to do so as they'd already have a large amount of content on their PS3 that they'd instantly lose. After spending all that money, it all becomes worthless in the end.

PSN+ is a scam. They lure you in with the false claim of "free" games, and once you realise you're being scammed, it's too late to opt out without losing everything you've already paid for.

Like I said, if you still want to play a "rented" game after a whole year and don't want to lose it, just buy the game. Personally, as I said earlier, I will most likely get the 1 year subscription, and if they're offering you 4 extra game every month at no additional charge I don't see why you wouldn't take advantage of it.

 

[BattleAxeInc]

Pachter purports PlayStation Plus profitability? Perfectly preposterous!