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It's been almost three years since Sony launched PlayStation Plus, a paid subscription program that will probably be looked back upon as the most transformative evolution in console business models this generation.
For $50 annually, members get perks such as cloud saves and automatic, scheduled system updates, plus deeper discounts on games. But the biggest draw is the "Instant Game Collection," launched about a year ago, which is a regularly-refreshed rotation of "free" games. The catch is if you want to keep the free games, you need to re-up your subscription annually.
A Reddit user recently posted what a full year of PlayStation Plus' Instant Game Collection looks like. It's a list that includes dozens of titles, big and small, like Borderlands, Infamous 2, Pac-Man CE DX, Uncharted: Golden Abyss, Closure, The Cave and so on.
PS Plus seems good for the players, and good for Sony, which wants to grow its higher-margin digital business. But with what seems like a lopsided value proposition, we had to wonder: Is this good for developers?
"A loyal customer base is a must for the survival of the consoles"
Take Christofer Sundberg, founder and chief creative officer at Avalanche Studios, the independent company behind the sprawling open-world series Just Cause. The Square Enix-published Just Cause 2 was free for PS Plus subscribers last year.
Sundberg said Avalanche "hasn't seen a dime" directly from the promotion from Sony (Square Enix would've been the one to strike the terms of that deal). But he's perfectly okay with that, as that wasn't the expectation when striking the deal. For Avalanche, free promotions like PS Plus or free betas are an essential part of building a fan base. "From a PR and goodwill standpoint, [it's] most definitively worthwhile," he said.
"I don't know how much, if any, Square Enix has made from the game [on PS Plus], but we have only received a lot of great PR and gamer feedback," he said. "That's worth more than a few dollars in royalty to us at this point."
Sundberg said he personally subscribes to PS Plus. "With free giveaways, early releases, special demos and so forth Sony builds loyalty from their players. That is exactly what they should focus on. Most players won't have the money to buy both a PS4 and the next Xbox, and a PC, so a loyal customer base is a must for the survival of the consoles."
"For us, yeah, the revenue was worthwhile"
Developers negotiate PS Plus contracts with Sony on a case-by-case basis. Whereas Avalanche received the goodwill and positive public relations from a free PS Plus game (Square Enix, the publisher, presumably would've gotten compensation from that specific deal), some smaller developers we talked to did receive money directly from Sony when they made their games free.
Due to non-disclosure agreements, developers are tight-lipped about exactly how much, and how, Sony pays out. But we can at least get an idea of the effectiveness of a PS Plus free promotion.
In February, independent developer and Closure creator Tyler Glaiel put his game in the Instant Game Collection rotation.
"For us, yeah, the revenue was worthwhile," said Glaiel. "[Subscription models] are not a replacement for selling games traditionally -- Humble Bundle isn't either -- but it's super awesome Sony is doing this, because it absolutely helps in the end," he said.
As for the amount of revenue he got from the promotion, he was coy, saying, "I'd categorize it as a 'nice boost.'"
Jakub Mikyska is CEO of Grip-Games, developers of Foosball 2012, which was free in January this year. "The impact [of making the game free] was definitely worthwhile. Not huge, but worthwhile," he said. "I will also point out that putting our content on sale in PS Plus is important. Perhaps even more than going free.
"For the two games we had for free on PS Plus, the revenue from the free offering was between 10-15 percent of the overall revenue we made from each game," said Mikyska, who added that he would put his games up for free again if he had the opportunity.
"It is a great way to promote your game to the part of the PSN crowd that is most likely going to spend money and it is also a great way to give your game long tail sales," he said.
Mikyska noted that going with a free promotion isn't for everyone -- of course, if you have a hot game that everyone wants to pay you upfront for, then no, don't give it away for free on PS Plus. But, he said, "going free in the later parts of the game's life cycle can give you some nice revenue boost."
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If it works for Steam, it should work here, too.
EDITED TO CLARIFY:
Steams sales are beneficial for the publisher for the same reasons.
I don't use this monthly service feature myself, I've only purchased individual PC titles from them, but it seems somewhat similar to the PS+ feature of assorted games (+ any 1 title of choice) for a service fee. (although at a higher price than PS+)
But outside of the PSVita instant library. I find that there are lots of games on the Instant Library rotation that I would have never bought in the first place. So I guess it is more about building a fanbase...even for the bigger Library releases like Sleeping Dogs--I can tell you that I would have never picked this game up...but it's downloading and I intend to go check it out. Sorry I didn't pay for it--but I wasn't going to anyway.
Games are priced so low that they are practically given away, which is how part of PSN Plus works, with the discounted sales they have. Some have alleged that the low prices hurt the publishers, but this has been refuted, I believe. Publishers are on board with the Steam sales for the same reason they are with PSN Plus, both the free games and the discounted ones.
Eric,
Sleeping Dogs is terrific. Totally worth 60 dollars by itself.
They need to get more coverage on this, because this is the first I'm hearing of it (and I pay way more attention to developments like this than the average gamer).
Anecdotal, to be sure, but so is your statement.
Since Sony seems to be doing so well with this approach, I wonder why Microsoft and Nintendo don't adopt the same approach? I only have so much time to game and with all the games I get through PS+ I hardly have any time to touch my other consoles. PS+ could be a big advantage going into the next console generation so I expect another console maker to try and copy it.
I think it is smart for multiplayer games to go the PS+ route because it help to generate a robust online community for your game.
This is the sort of thing publishers come up with, when they realize that building a loyal customer base is more profitable than treating their developers nicely, because, the developers have to go where the customers are...
"Giving away for free" sounds like you are saying people don't have to pay to receive the content. But they do: $50 a year.
Now, if you meant free from the developer's side, that's another thing. I took it as you meant people were getting the content for free.
Is that what you meant? Clarifying instead of being snide might be a good idea, as well.
That's a rather odd statement, actually. Since they didn't publish the game, of course Sony wouldn't give them money directly. But presumably they gave some to Squenix, who was the publisher and presumably financed the development of the game.
But beyond that, it's really not free for anyone. It's basically like Netflix for games - while you are a member of PS+ for a monthly (or yearly) fee, you can play X amount of games all you want. You stop being a member, no more games.
Does the original creator of those movies Netflix show get anything direct from Netflix? No, of course not, they give money to the people who own the rights to the movies, who may or may not hand out money depending on the contract.
So good to know Devs are getting something out of it. :)
For some unexplained and undiscussed reason that may or may not be interesting We assumed PS Plus is a sideways deal for developers. Those we spoke to all said they were very happy with it with the exception of a single caveat, which is that if you release a hot, popular game for "free," that's probably not a good idea.
The only real interesting nugget is could PS Plus Devalue Games? In general, I am certain we are going to see a dramatic increase in price variety on console in the next gen, but I would expect prices to line up more with Steam (majority are 5-25) than the App store, regardless of the incoming console F2Ps on the horizon. Even if Sony and MS increase indie games by 500% they will be miles away from the mass of crap that is the App Store. Fears about gamers believing games will only be worth $1 seem confused. Already millions of gamers exist who believe NO GAME is worth 20$, or even 1$ (lookin at you, middle class pirates).
Ultimately PS Plus encourages people to play games. The more games you play that you enjoy, the more games you will play in the future. One of the most amazing PS4 promises is the Demo Every Game promise. This terrifies some publishers and developers but this idea works just like PS Plus. I can't tell you how many times I've considered buying Dragon's Dogma, but at this point, unless I get my hands on it and know for sure (or it drops in price to the point of being a negligible cost) I'll never buy it. A PS Plus sale, or demo, could mean a purchase for the developer.