PSN not profitable yet

[Toaddio]

It's pretty clear that PSN is way behind Live in terms of revenue. Live is also a better online service, and has been profitable for quite a while. PSN still can't match Live in terms of service, and doesn't seem to be close to catching up. Maybe if PSN is slightly profitable, and is being dragged down by other online services, it changes the picture a little bit, but I still think the information paints PSN as a relative failure, when you compare it to Xbox Live. We're five years into this gen, and PSN is lagging behind Live in every possible way. They should have been ready to be competitive out of the gate, at launch, but they massively underestimated the importance of online. I don't think they knew how aggressive Microsoft was going to be with DLC and they thought they could win just by providing a more basic service for free. They just ended up behind on features, content and delivery.

The English article may paint PSN as a failure but the Japanese article translated is anti more accurate. You may want to read the translated pieces, although I don't speak or read Japanese so I can't confirm their accuracy.

Aside from all that, revenues doubled in half a year but you consider it a failure. It would seem to me that you have blinders on, giving serious bias to your opinion.

The services are certainly different. For someone that doesn't play online games Live is worth less but costs more than PSN.

 

[Scott_Arm]

Key word here is relative. Relative failure. Xbox Live has been far more successful than PSN. Sony was #1 last gen, by a landslide, and they let Microsoft take a huge portion of the North American market because of online service. I'm sure PSN will start to make some decent money over time, but Live has been successful for years.

Most of the stuff they are adding to PSN, I can't even use, because I'm in Canada. It's the same as ESPN on Live. I can't use it. I don't consider it a core feature of the product, unless everyone that has an account can potentially take advantage of it.

Microsoft was very successful with the 360 because they placed importance on the digital marketplace and took advantage of downloadable content. The entire product is designed to get you online, with your friends, spending money. The online service on PS3 seemed like an afterthought.

 

[Toaddio]

Key word here is relative. Relative failure. Xbox Live has been far more successful than PSN.

And that is just biased, fanboy talk. It's silly. Was Live a failure last generation because the Xbox wasn't as successful as Sony's complete lack of online presence? It's a stupid point and not even accurate.

A quarter of the revenue without an annual fee can't be considered a "relative failure".

 

[Tap In]

A quarter of the revenue without an annual fee can't be considered a "relative failure".

of course it can. Regardless of fees; as that is a consumer concern not corporate, it is 1/4 as profitable therefore relative to revenue by XBL, PSN is a failure.

 

[patsu]

It does feel a bit like Sony is taking a shotgun strategy to online services.
It feels to me like they are bombarding us with new services with little clear long term direction. How many tv/movie services does the PS3 have now?

I suspect the key problem is: Sony is behind in rolling out Qriocity/PSN Video Store. That's why the picture appears even more confusing. iOS offers iTunes as its main media delivery platform, but it also has many third party video services in AppStore. They don't conflict or confuse consumers. They are great for offering choices instead.

Besides the delayed schedule, I can see 2 key issues:

(A) Communications

They don't bother to explain the differences/benefits of all those movie services. iOS doesn't have to do that because they started with a strong iTunes music offering and grow from there, leading the industry. PSN Video is behind, the third party video services are more important to fill in the gap in the mean time.

Given the current industry state, you need most of them to enjoy a large/different selection of digital download media, and at different prices. NetFlix alone only offers a relatively smaller library. e.g.,
+ MUBI -- Focuses more on indie films
+ LoveFilm -- EU "NetFlix"
+ BBC iPlayer -- UK TV (like free Hulu ?)
+ VidZone -- Music videos
+ NetFlix -- Subscription model + disc rental
+ Hulu Plus -- Subscription model with focus on HD
+ VUDU -- Pay per stream, with focus on day-and-date releases
+ PSN Stores -- Pay per download
+ PlayTV/Tourne -- DVR with Program Guide
+ Music Unlimited -- 6 million songs

(B) UI

Earlier on, the playback interface of PS3 sucks because it maps the [].O.^.X buttons to random media functions, which is not intuitive. The HTML5 interfaces are more aligned because they use the dpad and X/O to activate buttons. Most of them also share similar look and feel (e.g. progress bar looks the same, buttons works the same).

But I see overly fanciful UI again in Music Unlimited

While options are good, I'm not sure it'll work long term unless you get the basics (integration, ease of use, consistency, etc) spot on.
Apple and Microsofts are pursuing more focused services that are quite tightly integrated, be they first or third party.

Sony apps should be more tightly integrated, but all of them (including third party apps) should follow HTML5 UI best practices and we'll be fine. They don't need fancy UI. They also need to introduce Move and controller-free UI at some point.

Despite the usage issues, PS3 owners actually benefit from the breadth and price of video services. In a sense, the third party video services are there to buy time for Qriocity.

e.g., VUDU has free $6 credit for all new PS3 owners, and $0.99/rental now. I'm not complaining ! ^_^

Yet even Home, which is hugely successful feels very disconnected from the rest of the PS3 platform.

Home is moderately successful. They can be hugely successful if they integrate better with XMB, and perhaps go beyond PS3.

Another example would be Netflix;
Tightly integrated with the 360 and it's UI, whereas I was boggled to learn the PS3's netflix app randomly assigns interface layouts. WTF!

Quriocity is a step in the right direction with platform integration as a primary goal, although I feel that should be the natural result of a well designed ecosystem (I hope it isn't forced, XMB style). We'll see. I'm a natural cynic so perhaps it'll all go brilliantly. I just wish it had a better name (well, not as bad as Zune I guess)

It's ok for NetFlix to experiment. That's not Sony's problem. The real problem is there is no flagship Sony media services on PS3 yet. PSN Store awaits its Qriocity streaming update. Music Unlimited is the first one in the music space.

Qriocity is actually much more than platform integration. It has an "open" DRM framework, which allows consumers to tear down the DRM boundaries between media services. This is not done yet anywhere else. I suspect we will see the true value of Qriocity late next year (depends on how fast Sony runs). If implemented correctly, it should be very different from all the non-Qriocity media services listed above.

I actually hope they dial back the overly-garnished Music Unlimited UI (Judged based on trailer alone).

 

[patsu]

Key word here is relative. Relative failure. Xbox Live has been far more successful than PSN. Sony was #1 last gen, by a landslide, and they let Microsoft take a huge portion of the North American market because of online service. I'm sure PSN will start to make some decent money over time, but Live has been successful for years.

Regardless of fees; as that is a consumer concern not corporate, it is 1/4 as profitable therefore relative to revenue by XBL, PSN is a failure.

Playstation Network and Xbox Live are very different creatures. They focus on different things at the moment. XBL is more a gaming network, whereas PSN is more a content network.

XBL mandates a gaming experience. Media services are integrated in to enhance the offerings. XBL gains more traction because it serves the gamers right away. It looks like MS wants to partner with cable companies to offer a more complete entertainment experience.

PSN starts with free online gaming and focuses on content platform + rights negotiation. Therefore, it has a broader selection of media services and contents. The subscription package (PS+) is a content discount service instead of a utility service. They have only started to milk PSN in second half of 2010, which may explain the almost double in revenue in the same time period. So far, gaming related functions are not released (e.g., cross game chat). Don't know what's up with that yet. It looks like Sony want to be directly involved in the content platform (alongside third party content providers). e.g., PS3 has its own SenseMe auto-selection of music instead of relying on Pandora.

If you want to look at profitability, then you'll have to consider the backend timeline and business models. Apart from the new investment in eBooks and Qriocity, it's usually more difficult for free-to-pay model to make $$$; but once they do they have more flexibility to go further. It's also unclear what Sony has in mind for PSN because of its more open nature (PSN for Android phones since PSP-Phone can use PSN too ? eBooks for PSP and cellphones make more sense than eBooks for PS3 alone).

 

[joker454]

Playstation Network and Xbox Live are very different creatures. They focus on different things at the moment. XBL is more a gaming network, whereas PSN is more a content network.

This isn't correct, xbl is both a gaming and content network and has been for a very long time, from far before psn was.

We've argued this many times before, and people can list whatever they like regarding all the hodgepodge of services hacked into psn in whatever primitive ways they provide them, like via the antiquated browser, etc. But none of it matters when it comes to people cracking their wallets open if the user experience is terrible. In the Sony vacuum, like if you went from ps2 to ps3 and never sampled anything else, then you will probably tolerate psn or even possibly like it. In the larger landscape though, via clues like said psn non profitability article and xbl pulling in a fortune in cash, it should be abundantly clear by now that people are willing to pay for quality, namely smooth and consistent interface, good content, great user experience, etc. Xbl has this, psn still doesn't. Again, simply look at the profit numbers if you don't feel this is the case. Xbl makes it incredibly easy to spend money because the service is so slick and integrated, be it for games or non gaming content. It's all there, it's all uniform, it's all easily accessible.

Note this is becoming even more important now as the casuals enter the fray. The hardcore gamers are more tolerant to terrible interfaces and yet their wallets still voted with xbl. Casuals are far less likely to tolerate a user experience that is a mess, and this is where psn is at an even larger disadvantage compared to xbl. They need to clean up psn already or they will have a hard time getting casuals and other future impulse buy money.

 

[patsu]

They are both gaming and content network, but the management focus on different areas in the mean time. ^_^
Their business models and approaches vary.

Yes, some people are willing to pay for quality, like Blu-ray quality vs streaming quality. Or online gaming with a consistent interface.

But there are also people who want a broader selection and cheaper videos (NetFlix is only available for XBL Gold members ?). Or free online gaming.

We'll see Sony and MS evolve their platforms based on their timelines. For now, their focuses are indeed very different. Other than the PS+ survey a few months ago, Sony have not delivered much in online gaming yet. However we saw quite a few new services/development on the content front (VUDU, NetFiix with 5.1 audio, Hulu Plus, LoveFilm, MUBI, Music Unlimited, eBooks, etc).

That said, Sony management should definitely pay more attention to UI. They may be losing sales because of it. The UI does not need to have extensive animation, something simple, direct and responsive will do.

 

[mrcorbo]

They are both gaming and content network, but the management focus on different areas in the mean time. ^_^
Their business models and approaches vary.

MS's focus has been all about content since the 360's launch. The development of online gaming that they have done on the 360 has all been an evolution of what they already had accomplished on the original XBOX. PSN isn't behind XBL because they aren't focusing on the same things, it's because they started behind and have been trying (with mixed success from what I can tell) to play catch-up from the beginning. It'll be interesting to see if Sony can get there before either the hardware generation ends or there is some other large development that forces them to have to tackle a whole new set of challenges.

 

[patsu]

MS's focus has been all about content since the 360's launch.

Content is what consumers use directly. So XBL does have TVs, movies, games, etc.

When I mentioned Sony focus more on content, I'm saying they go deeper and have a larger scope in terms of selection, quality, pricing and business models, as well as the building blocks to create new media businesses themselves on a worldwide basis. What's missing is the user experience to tie the selections coherently together on PS3. MS has been focusing on their delivery platform (I believe they have their own edge servers and probably tracking and CRM platform), but slower in bringing in new media providers. They are courting the cable companies. Other than Qriocity Music Unlimited and VOD for "all" Sony and third party devices, Kaz's division also sells eBooks from their ReaderStore (to Sony Reader, PC, plus iPhone/iPad and Android Phones in January). The eBooks may be based on the Qriocity DRM framework (since there is no DRM standard for the ePUB standard). I believe both XBL and PSN have digital comics already. Digital comics should be consolidated into the larger eBook effort.

If you count the overall Sony group effort, they are also setting up a few 3D TV channels to help support their group goals. 3D games have made it to PSN. I wouldn't be surprised if 3D movies/TV end up there too.

The development of online gaming that they have done on the 360 has all been an evolution of what they already had accomplished on the original XBOX. PSN isn't behind XBL because they aren't focusing on the same things, it's because they started behind and have been trying (with mixed success from what I can tell) to play catch-up from the beginning. It'll be interesting to see if Sony can get there before either the hardware generation ends or there is some other large development that forces them to have to tackle a whole new set of challenges.

Certainly true for online gaming. I suspect Sony focus on media services first because they have more inherent advantages there. For online gaming, they have been rather slow in execution.

 

[Shifty Geezer]

You mean in every possible way, except the most important feature of both services - gaming? :>

PSN gaming is too buggy. Too many games won't connect properly or have connection issues or problematic or missing voicechat. It doesn't provide a robust online connective gaming service, only an iffy one. So no, I'd say definitely no comparable in terms of online gaming (unlessLive! is equally poop!).

 

[2real4tv]

Reading some of the comments you think people enjoy paying for online. Playing games online with friends should be free.

edit: Ive had XBL for three years and did not see the point of paying the $50 after getting a ps3. Especially them making it hard to get out of their auto-renewal. People try to stretch that $50 in a year to make it sound cheap but when its time to pay, I can't help but think I could be purchasing a game with that money.

@Shifty: Buggy how? If you mean disconnections etc. same thing happens on Live.

 

[corduroygt]

PSN gaming is too buggy. Too many games won't connect properly or have connection issues or problematic or missing voicechat. It doesn't provide a robust online connective gaming service, only an iffy one. So no, I'd say definitely no comparable in terms of online gaming (unlessLive! is equally poop!).

Which games are those? I have played R2, Fifa, Castle Crashers, COD (briefly before being disgusted by that crowd), BFBC2, GT5, UC2 online and they don't have any issues. KZ2 was pretty bad in that respect, but that's all going to be forgotten now with KZ3.

 

[Shifty Geezer]

@Shifty: Buggy how? If you mean disconnections etc. same thing happens on Live.

Won't connect. Won't update friends lists properly. Won't send/receive invitations. Voice chat doesn't work.

Which games are those? I have played R2, Fifa, Castle Crashers, COD (briefly before being disgusted by that crowd), BFBC2, GT5, UC2 online and they don't have any issues. KZ2 was pretty bad in that respect, but that's all going to be forgotten now with KZ3.

UC2 has frequent connection issues with failure to join friends parties or send/receive invites and inaccurate reporting of whether friends are playing online or solo. Alien Breed has similar connection issues and no VC. WH has some connection issues and garbled VC. Borderlands had connection issues such that it wouldn't work at all with my account and I had to use an alternative account, and had garbled VC. Booty has frequent connection issues, failure to join parties, send/receive invites and drop-outs, most notably reports that I've been logged out of PSN when I haven't. Fat Princess had connection issues when we were trying to play.

As for on-topicness, the above is one explanation why PSN's profitability is lagging behind Lives!, because Live! is providing a better service that people are willing to pay for. I dare say Sony could provide a comparable service without it costing much, and should focus more on selling content. One difference between Live! and PSN is a lot of content on Live! which I'm sure explains a lot of Live!'s taking as it plain sells more games. If Sony could take over significant amounts of the Netflix/LoveFilm and iTunes/Napster service provision, they'd definitely make a lot of money, making gaming subscriptions insignificant. There's an argument for Sony to use free gaming to attract media sales. It almost worked on me last night where I use PSN store for games and was going to rent Up! to view, but it wasn't available to rent. The sales options are too limiting. If that changes, I can see reason to believe PSN (should this become SonyNet?) takings could increase tenfold.

 

[Arwin]

PSN gaming is too buggy. Too many games won't connect properly or have connection issues or problematic or missing voicechat. It doesn't provide a robust online connective gaming service, only an iffy one. So no, I'd say definitely no comparable in terms of online gaming (unlessLive! is equally poop!).

I don't quite agree. It's a matter of detail, but the services that PSN offers seem to work equally well as rival systems. What you are complaining about are services that are not offered by PSN and consequently vary with each title/developer.

 

[KKRT]

PSN gaming is too buggy. Too many games won't connect properly or have connection issues or problematic or missing voicechat. It doesn't provide a robust online connective gaming service, only an iffy one. So no, I'd say definitely no comparable in terms of online gaming (unlessLive! is equally poop!).

Actually every game i played was fine, not PC standard but fine or good.

UC2 has frequent connection issues with failure to join friends parties or send/receive invites and inaccurate reporting of whether friends are playing online or solo.

Really? When? I played a lot of beta, demo and retail online and there was only slow match starting problems which was failure in terms of party U2 system, not PSN, and it was patched. I actually think that U2 online, as a gameplay was one of the best online experiences i had with PS3, but in terms of functionality it was disaster [i'm playing online games since Quake 1].

And about XBL, You forget about GoW 2 almost year of lags? or maybe Forza's server downtime for a week?

Both services have bad days, but I'm really surprised that people defend Live! Yeah its giving Microsoft great year profit, but not because of features, but because Microsoft force people to pay for it. Drop online gaming/netflix functionality from gold to silver and amount of subscribers drop to PSN+ levels.

 

[Toaddio]

As for on-topicness, the above is one explanation why PSN's profitability is lagging behind Lives!, because Live! is providing a better service that people are willing to pay for.

Even if true, I don't think that makes PSN a relative failure.

 

[AzBat]

What you are complaining about are services that are not offered by PSN and consequently vary with each title/developer.

I think that's the point. PSN does not have a set of standard services like Live. With PSN you can't depend on the varying devs/titles to include standard features like voice chat, etc. What's the point of having a network of services if you can't guarantee that every game supports something as simple as voice chat?

Tommy McClain

 

[mrcorbo]

Reading some of the comments you think people enjoy paying for online. Playing games online with friends should be free.

edit: Ive had XBL for three years and did not see the point of paying the $50 after getting a ps3. Especially them making it hard to get out of their auto-renewal. People try to stretch that $50 in a year to make it sound cheap but when its time to pay, I can't help but think I could be purchasing a game with that money.

I think of it as paying ~$4.00 a month for a service that is a value-add to my 360 and every game I purchase for it.

 

[upnorthsox]

I think that's the point. PSN does not have a set of standard services like Live. With PSN you can't depend on the varying devs/titles to include standard features like voice chat, etc. What's the point of having a network of services if you can't guarantee that every game supports something as simple as voice chat?

Tommy McClain

What psn MP game doesn't have voice chat?