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The future of PlayStation Plus is looking rosy
The future of PlayStation Plus is looking rosy
August 15, 2013 | By Mike Rose

August 15, 2013 | By Mike Rose
Comments
    17 comments
More: Console/PC, Business/Marketing



With Sony planning to implement its PlayStation Plus subscription service heavily into the upcoming PlayStation 4 console, research firm IHS Electronics and Media has forecasted that the company will be generating over a billion dollars a year from the service by 2017.

PlayStation Plus is a yearly subscription fee that PS3, PS Vita and soon PS4 users can pay in order to receive free games and discounts for the various consoles. The scheme will go even further with PS4, as users will need a PS Plus subscription to play games online.

As a result, IHS says that Sony will be generating around $1.2 billion a year from PS Plus alone by 2017, making it a substantial revenue stream for the flailing PlayStation business.

Only $140 million was spent on PlayStation Plus subscriptions in 2012, says IHS, but the requirement of a subscription to play online games on PS4 will apparently greatly increase this figure.

For contrast, IHS points out that Microsoft generated $1.25 billion through its Xbox Live Gold subscription service in 2012 -- a service that is extremely similar to the upcoming PS Plus for PS4. This additional revenue stream has allowed Microsoft to stay ahead of the competition, says the report.

"Sony's decision to emulate Microsoft's paid-for multiplayer gaming strategy levels the playing field and will allow it to invest more heavily in its PlayStation Network infrastructure and services and to compete head-to-head with Microsoft during the next console generation," says Piers Harding-Rolls, director of games at IHS.


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Comments


Kevin Clough
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I'm glad that Sony is going to generate such substantial revenue, but we have to keep in mind that it won't be all profit because of all the free games Sony gives away with Plus. People who have to get Plus just to play PS4 games online are going to be pleasantly surprised by all the content that will come with the subscription. Because of the PS3/Vita Instant Game Collection, I predict that it will drive a lot of PS4 users to pick up a PS3 or Vita if they don't already have one.

Eric Geer
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"I'm glad that Sony is going to generate such substantial revenue, but we have to keep in mind that it won't be all profit because of all the free games Sony gives away with Plus."

Isn't it all profit anyway? Giving away games for free isn't necessarily a loss when its digital. There is only a perceived cost or loss of profits--as the games are already hosted on the PS Store. Unless of course there is deals that say Sony must pay devs/publishers of those games that are given away for free. I'm not actually sure what happens behind the scenes.

Freek Hoekstra
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surely some of the income is spent on:

the licensing of the games,
Hosting the downloads,
Updating the framework

so income surely != profit

Marijn Lems
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"Xbox Live Gold [...] a service that is extremely similar to the upcoming PS Plus for PS4." Not really - all the free games and discounts make it qualitatively different. I've never felt tempted to become a Gold subscriber, whereas becoming a Plus member turned out to be one of the best decisions I've made as a PS3 owner.

Bob Allen
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Gold has always had sales and discounts. Now they have free (to keep forever) games as well. Gold was worth the money (since Gold subscriptions can easily be had for $35 a year) before the free games.

Kevin Clough
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When they announced the Gold free games, they said it would only last through the end of this year. I hope they extend and expand it, but they have not announced that. I won't be extending my Gold subscription unless they do make the free games a permanent part of the program.

Cordero W
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I don't enjoy paying twice for my online services.

Mike Lentini
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Not even sure what you're referring to here.

John Paduch
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They've admitted publicly that they need the extra income to properly maintain their network architecture. At least with PS+ you get lots of goodies, as opposed to XBL requiring Gold just to access services like Netflix and Hulu, on top of the multiplayer.

Seth Strong
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I think it's a bad move to tie the membership to online services such as multiplayer. It would be reasonable to increase the price of the existing service, in my opinion.

Ismail Youngblood
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Making Plus required for online play is an obvious business decision they had to make. Sony needs that revenue to support a more robust online experience. The fact that other online services are still free is pretty awesome. I appreciate having the choice. I know some gamers don't like to play online. Those folks will still be able to game and use other services wo paying for Plus.

Cordero W
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Microsoft's online is not robust and they make you pay for it. Sony going that route isn't going to make any difference.

Eric Newcomb
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The strength of Xbox Live has always been its multiplayer functionality, and except for that, I think Xbox Live is a far cry from Playstation Plus. Certainly Playstation Plus is much more friendly and accessible to independent game developers, and the games they give away have been a huge boon to the independent developer community. The best advertising is still word-of-mouth, and a number of my friends and associates have bought games that I've recommended after getting them free from Sony. If they can add a solid online multiplayer component on top of their already excellent subscription service, it could be the smartest move they've made in years.

wes bogdan
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Well at least sony doesn't hide netflix,hulu,party chat behind plus as ms has for years making those who never go online and would rather play blue dragon pony up to access netflix which you pay seperatly for plus isp for net access and then gold for the privlage of playing online.

Ms neither supplys the isp or netflix so gold was getting whittled away when sony pioneered cloud saving,copy protected saving,automatic updates and free games even though after 12 months sony still owns them and by by plus by by games which should be fixed.

Having beta tested live and signed up for plus day 1 plus has more than closed the gap between live and psn.

It's too bad a multi system owner x1 and ps 4 will need 2 pay plans to do almost the same thing....wonder if nintendo will ever get it's online act together and then that'll be 3 subscriptions we all need........

Kevin Clough
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The biggest hurdle I see with the PS4 Gold plan is that two subscriptions will be needed for dual console households. I'm only going to have one PS4 at the start, but when I do get two, I may subscribe to Plus with an account from another region in order to get a different set of games with my second subscription.

Mark Wilson
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At first I was a tad disappointed that Sony would be taking away the free online play, but surely its not like we're never going to see the result of our spending. All that money will obviously be very good for Sony, and at the end of the day, the more money they have, the more they can do for their customers (us!).

Jarod Smiley
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If it'll help them chip away at that 3.5 billion lost from PS3 I'll support it. PS+ is a great value for me at $50 a year, and just got another year free just for having a Playstation Visa card! I don't play anything online since SF4, but the amount of games I got to play is significant because of plus. it's a great supplement to the system. And as the library for games grow, it will be a huge marketing/selling point I think.

Pretty much Sony can advertise free games with PS4 day one...and not just FTP games like Planet Side, but the instant game collection. Beginning of PS4's life cycle it'll likely only be Sony's first party stuff and smaller indy games (Drive Club for example) but it should grow pretty quickly, and Sony is looking to turn things around in a major way.

Hopefully PS4 won't hit them too hard with the addition of a game+accessory or something. I simply can't imagine a game industry without companies like Sony and Nintendo around. All aspects of there business may not be flying off the shelves, but it's good to see these companies get nimble and change with the trends to remain profitable.


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