Sony Home - The official thread*

[patsu]

...because the larger percentage may not dilute the current Home user base. Many are turned off by other attributes that do not affect the current user base (e.g., "Nothing else" to do besides chatting).

 

[DrJay24]

When I gave my wife a tour of the Home Mall, the first thing she wanted me to do was to "buy a set of clothings for yourself". She noticed that I was wearing the same T-shirt as many guys.

I admit I bought a $0.50 pull-over to break the monotony of looking like everyone else.

 

[kyleb]

...because the larger percentage may not dilute the current Home user base. Many are turned off by other attributes that do not affect the current user base (e.g., "Nothing else" to do besides chatting).

A larger percentage of users creating a smaller percentage of income doesn't change the size of the user base, nor does it create anything else to do.

 

[patsu]

Not sure I understood you.

There are at least 2 ways to expand Home's revenue:

(i) Increase percentage of revenue contributors
If Sony think of more things and services to sell to the same Home user base, then this part will increase relative to the Home user base.

(ii) Increase active user base
If Sony can address the "Nothing else to do in Home" problem for more people, this part will increase relative to the total Playstation user base.

In both cases, they can improve on the current 20/80 proportion because more people transact.

They have to watch out for the number of people who participate but don't transact. In which case, Sony has to balance the picture with advertising.

 

[kyleb]

The problem is you don't understand the 80/20 figure. You can change Increase active user base to whatever as well as the increase percentage of revenue contributors to whatever, and still have 20 percent of your customers creating 80 percent of your income.

 

[patsu]

20/80, or for that matter 40/60, is just a metaphor. The actual number should be lower (relative to total Playstation user base).

I am just saying that as it stands today, Sony's Home project has barely tapped on its user base. Home is not useful for most users. It is also hard/tedious to use for many. When Sony improves in these areas, the percentage of revenue contributors will increase.

They will likely still be the minority, but should be more than the current base.

In addition, as the number of users in Home increases, the advertising model will make more sense.

 

[kyleb]

It isn't a metaphor, it is a customer analysis, and again it has nothing to with the total Playsation user base or the total Home user base for that matter. The figure means that, out of all the people bying stuff from Home, one fifth of those people have been spending four times as much cash as the four fifths.

For example sake, imagine everyone who bought things from Home all spent the same ammount of cash doing so. Then the figure would be 50/50. 50 percent of the customers create 50 percent of the income.

 

[-tkf-]

Yeah, Home is a cash cow, I realized that from the first moment I checked out one of the shops in the mall. I can't imagine ever buying anything in Home myself, but I'm sure many will.

I will get every cool apartment there will be offered, when they implement radios and tv´s i will buy them as well.

Clothes, well only for my Female char ;-)

 

[Arwin]

I was tempted to buy the suit, and my wife also urged me to do so, but I haven't done it yet. I can see myself buying something for sure eventually though, but only when there's a little bit more stuff out there to choose from in the first place. For instance, right now there's not enough furniture for me to want to decorate my place in a style that suits me personally. I liked one of the signet tables quite a bit, but I don't have enough other options to go with that table, if you know what I mean. So for now I'm more enthused by stuff like the Namco Arcade machines, even if just for decoration.

I noted by the way that the Namco arcade machines launch you into a full Playstation 3 game (in fact it seems to start part of that Namco museum beta), different from the Lua Arcade games that you can play in the Bowling area like Echochrome for which you never have to leave Home. So there's some flexibility there, though in terms of practicality of course the Lua Arcade cabinets are more user friendly (i.e. really quick, versus leaving Home, booting up a game Playstation 3 logo and all and reentering Home)

 

[patsu]

It isn't a metaphor, it is a customer analysis, and again it has nothing to with the total Playsation user base or the total Home user base for that matter. The figure means that, out of all the people bying stuff from Home, one fifth of those people have been spending four times as much cash as the four fifths.

Not really. The exact figures are usually not 20/80 (As long as it's the vital minority supporting the majority).
http://en.wikipedia.org/wiki/Pareto_principle

 

[RobertR1]

As I said earlier, it's a micro transaction and ad haven for Sony and they'll milk it as such.

 

[kyleb]

Not really. The exact figures are usually not 20/80 (As long as it's the vital minority supporting the majority).

Obviously the figures are rounded, but the fact remains that it simply represents that a small number of the people purchasing stuff are buying the vast majority of the stuff. Again, your suggestions of expanding the total Home user base or the number of people buying stuff in home wouldn't neseccarily change the 80/20 figure at all.

 

[patsu]

It can. I actually meant to say 40/* (as opposed to 40/60), where 40 is just an arbitrary number larger than 20. The original "feedback" was that Home is only useful for a limited audience at this moment.

80-20 is only a shorthand for the general principle at work. In individual cases, the distribution could just as well be, say, 80-10 or 80-30. (There is no need for the two numbers to add up to 100%, as they are measures of different things, e.g., 'number of customers' vs 'amount spent'). The classic 80-20 distribution occurs when the gradient of the line is -1 when plotted on log-log axes of equal scaling. Pareto rules are not mutually exclusive. Indeed, the 0-0 and 100-100 rules always hold.

As I said earlier, it's a micro transaction and ad haven for Sony and they'll milk it as such.

That's just a limited view of Home.

Home can be a lot of things at the same time because of its "integrated-ness". It can assimilate content from Sony, game developers, non-gaming companies and even end users. It can also integrate with Internet because of PSN's openness.

Business-model wise, it is not limited to micro transaction and advertisement. As long as the users feel that the price is justified, there is nothing wrong in collecting money.

 

[kyleb]

It can. I actually meant to say 40/* (as opposed to 40/60), where 40 is just an arbitrary number larger than 20.

The figure still doesn't relate to expanding the total Home user base, or the number of people buying stuff, regarldess of what numbers you use.

 

[patsu]

What do you think the figure relates to ?

For comparison to the current Home performance, I'd need to assume a figure (say 10/80 where 10% of Home visitors completed 80% of transactions in Home).

If the same people transact more, it may become 10/90
If more people transacted, 10/80 may still hold true. However, 30/80 would indicate that the spread is more even/balanced. I assume it'd mean the audience is broader.

 

[kyleb]

For example sake, imagine only 10 people bought stuff in Home, spending a total of $10.

With the figure 80/20, that means 2 people spent an around $4 each, while the other 8 people spent an average of 25¢ each.

Now say the figure is 80/40, that meas 4 people spent around $2 each, with the other 6 spent average 33.3¢ each.

 

[patsu]

Sure ! But my point was the original purchasers will still spend whatever they have spent in Home currently. And if Home can appeal to more people, there will be more transactions from additional users. So the total figure will always be more, not equal or less.

 

[kyleb]

No, again, you could go from 10 people spending a total of $10 to 100 people spending a total of $100, or any other totals you like, and still wind up 80/20.

 

[patsu]

Yes. I mentioned above too. But my point is also they need to broaden the audience so that proportionally more people contribute to their bottomline. Hence the higher percentage assuming the current users stay.

Can't just pick on individual arguments separately. It's:
* Keep current base spending.
* Broaden appeal
* Increase purchase

Otherwise, the majority of the folks will add more cost without contributing $$$. They will put unnecessary burden on the eco-system. Advertising will help to alleviate it somewhat but at this point, it's still young.


Theoretically speaking, you could still come back to 20/80 but practically speaking, the spending percentage should be higher on the average.

 

[kyleb]

Hopeless.