PS4 proves that Sony should cut 1st party production
- Thread starter babybumb
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Agreed. The movie and TV industries are prime examples to see how this plays out. A lot of mainstream movies get big production and big marketing budgets in the hopes of seeing high gross sales. Profits from these films go into funding other films for a fraction of a mega budget. Many of these films won't make a profit, but sometimes there is a sleeper hit that had a small budget and ends up raking in $200 million. This happens with games as well. The thing about the movie industry is they seem to be much better at mitigating losses than games makers and they have additional avenues of generating revenue besides movie theaters.
Regarding Sony's 1st parties getting the boot as a whole, it is a terrible idea to even entertain. babybumb has showed clear bias against Sony and has created a thread that is pure flamebait. I have to commend the Beyond3D console community for discussing this subject in a constructive manner. It gives me absolute pleasure to come here and read this thread and see how it has been handled in a most excellent way.
The value Sony's 1st parties bring to the table have already been mentioned by everyone else so there's no need to reiterate. I will say that when I see a gaming company such as Sony go after many different genres and even make quirky games it shows me that they are invested in their console and are willing to risk money in fleshing out its games library to reach a wider audience. If they didn't make games for their own platform I wouldn't have bought it. And while most of their games might not make a profit, at least the company gets to keep the lion's share of the 50 - 60 dollars I spent on the game. I would imagine a 1st party games is quicker to profit per game sold than a multi-plat.
That last part is critical, because movies essentially can generate revenue for many decades whereas games so far don't. That does make it easier to take risks with movies because sometimes a movie that is a cinema financial bust (say like Shawshank Redemption) can still over time keep generating revenue and become profitable. When a game busts out it simply busts out and the losses sometimes take the company down with them. The multi studio model that Sony has was created when they effectively owned the market and games were far cheaper to make so it made more sense at the time. Now with game creation costs exponentially higher and Sony no longer in an NES style dominant position means the financial logic of funding a flock of studios becomes open to debate, especially since unlike the movies games still aren't able to generate revenue for anywhere near as long.
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Wow. You've going to mention DriveClub's 11 month delay but skip over the seven years Ryse was in development for a different console with a control control scheme? Ok.
Drive club definitely isn't my kind of kind but it came from the team who made Motorstorm and WRC, both are which are my kind of games. You don't burn down studios because games aren't scoring 9/10. You learn from your mistakes and do better next time.
For Sony I guess we will have to see how this generation plays out to see where they go in terms of amount of titles funded and the budget going towards them.
I entirely agree with you that being able to monetize a hit game for years after release has been unattainable for the console industry. Just now with remakes and rereleases of old titles on the online marketplaces for consoles have we gotten some semblance of that, but I don't know the figures of people buying these old titles. Remasters like the TLoU provide an updated experience on new systems and that's a way to monetize a product further. Some would consider it milking a title but hey, if it makes money it makes money. BC is of course going to be the most important aspect going into the future when it comes to monetizing old titles. The ability to play an older title for an older system in a flawless state is required for this to happen and with the consoles being x86 I don't see it being a much easier problem to solve going forward. It's a tough problem to solve but I am glad to see the industry attempting to tackle the problem. I think the more people adapt to the digital marketplace it could also have a net benefit for monetizing older titles.
Yeah, you usually burn a studio if the game doesn't sell, which can be due to bad reviews. Activision did it many times.
This said both Ico and Shadow of the Colossus were well received by the critics and yet were commercial failures and yet Sony still gave Ueda a third chance.
One cold easily say that business wise Sony is making a mistake by keeping SCEJ alive with its poor sales record.
Next time you make new mistakes as well...if you are lucky to get a next time.
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Dont they make Motorstorm previously? That also sold fairly poorly IIRC especially most recent iterations.
Could be a situation like Sucker Punch where we hear about layoffs soon. But I guess that all depends on Sony's priorities. I trust Amazon charts pretty well for software sales (it matched up well to recent NPD leaks, I keep meaning to post about that in the sales thread) and DC had little interest there. I think it topped out at #51 or something. Huge threads on GAF and B3D notwithstanding.
I thought we were in a sony thread with the specific purpose of talking if first party devs are worth keeping for sony.
Driveclub was supposed to be a launch title and then was delayed a year. not only did it cost sony good will and hurt its line up , but then it cost another year of development and sony had to also make a sku of it free through psn + . Now its doing very bad in the press. Whats more it lacks features that were heavily used to mock sony's competitor last year.
Its certainly a studio that could go because as other shave said their previous games didn't work out well either.
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Introducing third party developer/publisher economics into this thread makes no sense becuase their econimic model is games needing to be profitable. Sony's economic model, as a platform holder, is to make the platform as a whole more appealing with them reaping profits on all game sales (through platyform licensing).
Revisit the link in MrFox's post of 07-Oct-2014 19:22 which has an interview with Yoshida that sets this out.
I thought so too but nobody is staying wholly on topic. Shocker!
Sony's goal as well is to make profit.
By making many kinds of games Sony simply seeks to reach a larger audience and so possibly make more profit.
You can focus on making one type of game and go after a single demographic but there are risks as well in doing so.
Now what Yoshida described is basic economy.
If division of you company is making money while another isn't then you can use that money to keep the non profitable division alive BUT you do that because you desire that it will start/return to make profit on its own again.
It is very anti-economical to keep throwing money to "money black wholes".
BTW I am not saying that Sony should shut down the Worldwide studios but it might be forced to shut down some of them.
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The original poster ended up making mention of MS as comparison. One can hardly talk about what Sony should be doing without mention of others in the industry. And Ryse was raised as an example of a game not being a Metacritic success still being valuable to some and the platform. How many XB1's would have sold day one if there was no Ryse and had been no Ryse hype prior to release?
What do you mean, had to? That was a business choice. It's not like they released the game, it flunked, and then they started trying to give it away. Driveclub is worth it if 1) it makes a decent profit and/or 2) it shifts boxes (without ridiculous cost). If one million PS4's were bought in anticipation of Driveclub, even if those owners don't go on to buy the game, it'll have had a valuable contribution. Then we have to get into what it cost to make and the value of its contribution to determine if its a net gain or loss.
Motorstorm : sold 3 million, metacritic 84
MS Pacfic Rift : sold > 1 million, metacritic 82
MS Apocalypse : 500k, metacritic 77
MS RC : ?? Possibly >1 million given press release, metacritic 78
Altogether, 6 million units sold across four titles. Or three million across
Not sure what your criteria for 'didn't work out well' is, given reasonable sales and critical success, and notably an enthusiastic fanbase.
I'll also add an anecdotal argument. At the moment, the only possible reason I'll get a PS4 will be for exclusives. The multiplats I can play on PC. Things like MM's next thing, Uncharted (Naughty Dog tour de force), and the Tomorrow Children (depending how it turns out) are what may get me to buy a PS4 eventually.
What we really have here is a repeat of this discussion from 2010:
The "what is a successful game?"/"are exclusives worth it?" cost/benefit thread
...with a slight variance where PS4 can sell strongly on 3rd party content so the cost:return ratio of exclusives is likely reduced a factor.
What we really have here is a repeat of this discussion from 2010:
The "what is a successful game?"/"are exclusives worth it?" cost/benefit thread
...with a slight variance where PS4 can sell strongly on 3rd party content so the cost:return ratio of exclusives is likely reduced a factor.
But those are defining moments of the PS2, if you talk to anybody that is a bit more serious about games than singstar and buzz, then they will talk about those games on the PS2.
They might not even have played them, but definitely heard about them or have a friend of a friend that loved them etc.
So just that Ueda was/is making The Last Guardian is a big talking point, brand awareness for Sony. Fine its becom a joke now, but how many pages on here does it not have?
And the most diehard people are hoping for a PS4 launch now
So the games by themselves did not make profit, but the PS brand awareness/word of mouth surely did make a profit for Sony.Which is what the 1st party is about, in addition to pushing technology etc.
Puppeteer and Driveclub might not be smash hits, but they define PS, like Halo etc define XB.
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Sony's goal is to make a profit but Sony's economic model is very differnet to that of Activision.
Activision's profit is derived from developing and publishing games on a number of platforms, where the revenue from sales, marketing and exclusivity deals cover the development costs and also net sufficient additional profit to re-invest in development of future games and give the shareholders a decent dividend. Ideally every game will do this but I doubt it does because no matter how good your games are, there is finite amount of buyer money to go round.
Sony's PlayStation profits are derived from the console sale (often not immediately from launch and which may not be great margins), peripherals like controllers and charging stations, sales of games that they as developers (and publishers) will take a large slice of revenue, sales of games that they as publishers will take a moderate slice of revenue and sales of games that they neither develop or publish for but which they receiving platform licensing fees for.
To maximise revenue opportunities from any game sale you need to sell as many consoles as you can (because not owning the console is a massive barrier to entry for all profits) and to sell to more people in wider gaming demographics you want as diverse a game library as possible. In order to achieve this diversity you have to, as Yoshida explains, invest in games that will not be commerciall successful (make a profit, or even cover costs) but which may sway fence sitters into buying your console and perhaps buying other games for it once they own it.
However I think it's essentially impossible to quantify the value of such investments, either in financial or market share terms. But even games which don't make a direct profit will be fuel for PS+ free games of the month later down the line. I've missed many great games which have later toally hooked when downloaded for free on PS+. There is clearly perceived value in programmes like this or wouldn't have followed suite with Games for Gold.
Here's the part that's interesting about your post to me:
We hear about the exclusives argument a lot on forums because the core gamers are a small but extremely vocal bunch. But in the end many are in the same position like you where they still don't even have a ps4 and it's unknown when they will (or if ever) actually buy one. Yeah they praise Sony exclusives and talk about their value, and yet they don't spend a dime on them or the platform at all. So for all the money that Sony has poured into exclusives, it's resulted in (anecdotal) results like yours where people will say yeah look at these cool Sony exclusives, they are awesome, they *may* make be buy a ps4 one day, maybe, perhaps. To Sony, where's the value in that?
To play the counter card, what if Sony instead decided to say to heck with exclusives, core gamers praise them to the moon on forums but they aren't getting them to actually buy the damn console and even when they do buy the console they seem to not buy our exclusives much anyways. Instead what if Sony took all that money and used it to subsidized the price of a ps4 by an additional $50 to $100, whatever those hundreds of millions would allow. Wouldn't that be a better move to get more consoles into the hands of *all* interested parties and in turn then get them spending more on psn, movies and other stuff on the platform rather than spending 50 million on an exclusive game (not including funding the studio when it's making nothing) only to have gamers praise them and then say "meh" when it comes to actually buying them? I ask people to ponder this not as a gamer, but if it was your company and your money being spent, what would you do?
I would continue to spend that money on developing titles that could potentially end up being a hit and selling millions, and selling a few systems along the way with those potential hits. If only 3 games out of 10 helps me sell an additional million or so consoles is that not worth it? I'm trying to build and expand my ecosystem to the fullest I can to maximize market share and the number of people actively making purchases through my ecosystem. I don't think gutting funding of development of games and transferring the money to a lower price on my system would prove frutful to my overall bottom line. I do not think that price cut would be enough to spur the additional sales compared to funding games development and lowering the price when it's economically feasible to do so.
You can't realistically expect 80 million PS3 owners to upgrade in the first year!
I'd say >50% of my disc based titles are Sony exclusives. But the point has always been landing that one hardware-moving sale. IIRC exclusives only account for 10% of game sales overall (I think it's more on PS than XB), but the exclusives are what swings someone's choice of one box over another.
The problem Sony have this gen is that they aren't a cutting-edge box, and people like me with a decent PC don't need a console for the cross platform games. I bought Borderlands 1 and 2 on PS3, but I'll be better off buying that on PC from now on. In this case, it's the exclusives alone that can sell me a box, plus maybe the console experience. If Sony's exclusives aren't absolutely fabulous, I won't bother. If they are, I'll bite (same would be true for any other console expect, for whatever reason, they never quite resonate as well as Sony's library with me). So surely anecdotally this is an argument very much for exclusives? Unless the ROI isn't justified.
Too many wild conjectures, made up numbers, and even strawmen gamers. The first parties aren't losing a billion per year every year (which is what would be needed to pay for a drop that is significant), that would be crazy. According to Yoshida the sum is profitable and it's his objective to stay like that (two or three hits paying for all the others) so that billion loss figure doesn't make sense.
I don't understand why you group together the gamers who praise them and the gamers who didn't buy them. Seeing first parties purely as direct money makers is incorrect as it's helping the platform as a whole, the platform itself is the most important reason to make those games. Each gamer will have his/her own rational reason to buy a console or a game. The less the sum of this group overlap in tastes, the more advantageous it is to have a genre variety. The third parties will NOT do that and will only make the same popular genres over and over (the games that defined the expression "hardcore gamer" on PC, or "PC master race", or whatever it's called today). The platform holders have a different goal and they profit from having variety regardless of each individual game's sales figure. It's not like the entire gaming community is some collective moving as a single mind. Each genre, heck even each individual game, will appeal to different demographics. The less the overlap, the higher the sum of console sales. Right now I tihnk Sony is meshing very across third party offerings.
So I think genre variety is the correct decision and it's the most profitable use of first parties for the platform. And about the risk, who knows which of the first party studios will become the next Naughty Dog, or the next That Game Company, or the next Media Molecule, etc... It gives the platform an identity, and it helps the prestige of the brand.
