Sony makes money from games? Heck no!

[elvis]

http://www.bloomberg.com/apps/news?p...TA&refer=japan

The loss from Sony's video game division widened to 26.8 billion yen

That's AU$303 MILLION in LOSSES.

So much for the great financial success of mainstream gaming. Microsoft are in the same boat. They haven't seen a profit from their gaming sector since it began.

I wonder how long this will continue until they just simply give up on the idea? It certainly would do the games market as a whole a lot of favours if they did.

[BGH]

Game piracy is just too insane at the moment. Personally I'd love to see one of the large publishing companies halve their sale price on all their games as an experiment to see if they make more money that way. Personally I think I'd be more likely to buy 2 x $50 games than 1 x $100 games.

[elvis]

Originally Posted by BGH

Game piracy is just too insane at the moment.

Piracy? I doubt that affects things at all. See any of my previous "ZOMG pirates are killing the XXXX industry" rants. Of which there are hundreds.

But you are very right on the second point: games cost too much.

This comes down to stupid business practices and nothing else. Sony and Microsoft are selling consoles at a massive loss and assuming they can recoup that on games. Problem is the games coming out are shit. People are far too wary to buy them.

I read a long article over on shmups.com about the arcade industry versus the console industry. Back in the arcade game days, if you wanted to make money from an arcade game, it needed to be good. People pay PER PLAY. Put a dollar in, and play a game. If the game is good, pay and play again. If the game is bad, walk away and don't play. You've only spent a dollar.

Consoles are very different. You can bling up the graphics and spend money on advertising, and essentially con a person into playing a game. And what people don't often realises is that the worldwide MAJORITY of GAME BUYERS are not game players. They are mums and dads buying games for their kids. Games they'll never play, and are pretty unlikely to even watch being played.

Either way, people are less likely to buy more games in the future if the one or two games the purchased today are rubbish. They'll rent them instead, and get the same week-long level of enjoyment out of them for $5 instead of $100.

The solution is three fold:

1) Make games cheaper. This can be done easily by not requiring every game made to have a movie-scale budget. Cheap games are possible, despite what the current trends would have you believe.

2) Make games good. Sure, "good" is a subjective term, but at least start with "original". Every game released today is a carbon copy of something else, based on the logic that the original sold well, and thus any copy of that same genre/storyline will also sell well. Sequels were once ABnormal. Today they are expected, and even planned before release. (Ditto for movies).

3) For the love of Pete, sell consoles AT A PROFIT! Consoles do not need to be tri-core multi-GHz machines to play games. Heck, most of the people making games today don't even know how to use all that power. Make consoles cheaper, and sell them at a profit. This is a business, after all. And businesses work on making money, not losing it.

[gonemad]

If you look at e-b's clearence sale with the 25-50% off sale's you can see how many more people buy games when there cheaper. I honestly don't know why the distributors of these games or the people like sony/microsoft don't really take this on board and try to build a business model around it.

[Falkor]

Originally Posted by gonemad

If you look at e-b's clearence sale with the 25-50% off sale's you can see how many more people buy games when there cheaper. I honestly don't know why the distributors of these games or the people like sony/microsoft don't really take this on board and try to build a business model around it.

You can also see the HUGE amount of games people don't want.

[elvis]

Online distribution with cheaper payment options is another winner. XBLA is making Microsoft more money than some of their game releases, thanks to the near zero-dollar distribution and cheap development.

Nintendo will offer a smiliar system for indi developers on Wii. Sony will have to pony up and offer something similar, or face some serious loss of market share.

[Mitch01]

Originally Posted by BGH

Game piracy is just too insane at the moment. Personally I'd love to see one of the large publishing companies halve their sale price on all their games as an experiment to see if they make more money that way. Personally I think I'd be more likely to buy 2 x $50 games than 1 x $100 games.

That is EXACTLY my thoughts.

Atari are the only company out here (disty) who are trying to do this.

For example, Atari advertise a new game (for example Crashday), $79.95 on their website. Thats good, thats fair, and hey, I'll pay that for a game.

I remember buying World Tennis Championships, and ET Rugby League for $50 brand new years back.

These days, V8 Supercars 3 - $110 or whatever.. its a joke.

If game developers want to prevent piracy, then dropping prices is the best way. TBH I dont like the idea of Daemon Tools or crap like that, it f**ks up my RAID controller, so I prefer to buy a game, or go without.

Look out for Test Drive Unlimited coming out soon, Atari have that priced decently as well.

[wisie]

I like the idea of having to buy a game to play on the net as this actually is one of the only ways the companies get me to buy games. This is probably the same case for others and it must generate a nice sum of sales.

But just a q if I may. Why cant games sell for the same price as dvds? Is the production of a movie (say oceans 12) more expensive then the production of a game say battlefield 2? Or is it vice versa? Hell if games were coming out at $30 I would be picking one up every week for my entertainment.

[DrDoom]

Apparently the Wii will be sold at a profit (from what I've heard). It will be interesting to see how it does. I know I will most likely be buying one.

[caudex]

Originally Posted by elvis

Online distribution with cheaper payment options is another winner. XBLA is making Microsoft more money than some of their game releases, thanks to the near zero-dollar distribution and cheap development.

Nintendo will offer a smiliar system for indi developers on Wii. Sony will have to pony up and offer something similar, or face some serious loss of market share.

i hear read somewhere that sony are planning on offering both psone(for the psp) and ps3 games via their new e-distro systems.

[proffesso]

Originally Posted by elvis

http://www.bloomberg.com/apps/news?p...TA&refer=japan


That's AU$303 MILLION in LOSSES.

So much for the great financial success of mainstream gaming. Microsoft are in the same boat. They haven't seen a profit from their gaming sector since it began.

got a source on that? I dont recall sony making year on year losses, except when new consoles are produced (dev costs and startup)

[elvis]

Originally Posted by proffesso

got a source on that? I dont recall sony making year on year losses, except when new consoles are produced (dev costs and startup)

Sorry, bad english on my behalf.

I was referring to Microsoft being in the red since day dot. Sony made quite a killing back in the PSX days, and likewise after they recouped losses on the PS2. They've been up and down over the years. Microsoft has definitely been "down" since the beginning.

Originally Posted by DrDoom

Apparently the Wii will be sold at a profit (from what I've heard). It will be interesting to see how it does. I know I will most likely be buying one.

Yes, the Wii will be sold at a profit. Nintendo had no interest in releasing expensive games to cover losses elsewhere. Plus, Nintendo don't have billions in side industries to fall back on either, unlike Sony and Microsoft. Nintendo need to implement intelligent business plans, or die. Sony and Microsoft are able to fartarse around for decades before they see the financial implications of their actions.

Originally Posted by caudex

i hear read somewhere that sony are planning on offering both psone(for the psp) and ps3 games via their new e-distro systems.

I read the same. But Sony is being very tight lipped about anything official. Nintendo has confirmed a number of "Virtual Console" systems on offer, plus the indi games. Microsoft are the first to put their money where their mouths are and offer XBLA. I'm certain Sony will have a similar system on offer (probably even related to their music and movies ala and iTunes-style service also). It would be corporate suicide not to.

[elvis]

Originally Posted by Mojo-X

Umm, PS2 and PSP are still making Sony lots of money. It's just that the research and development costs for the PS3 have costed a lot. Sony does make money from games...

Not right now they don't, which is the topic at hand. Over the last 12 months, they are AU$303 million in the red. Ain't no money making there.

[Alper]

Originally Posted by wisie

I like the idea of having to buy a game to play on the net as this actually is one of the only ways the companies get me to buy games. This is probably the same case for others and it must generate a nice sum of sales.

But just a q if I may. Why cant games sell for the same price as dvds? Is the production of a movie (say oceans 12) more expensive then the production of a game say battlefield 2? Or is it vice versa? Hell if games were coming out at $30 I would be picking one up every week for my entertainment.

i would think that movies would get the majority of there profits from the box office instead of the DVD's released later.

the games are more expensive because they can only be sold via one medium where as movies have the cinema...

[elvis]

Originally Posted by Mojo-X

Aside from the PS3 development and manufacturing, they did actually make money.

Translated: "asides from the console that cost them $400 million, they still made $100 million".

A loss is a loss, no matter where you hide it.

Originally Posted by Mojo-X

But they needed to invest alot into PS3

Yes, they needed to invest in the PS3. Did/do they need to invest *AS MUCH* as they did/are? I don't think so.

A console 1/3 the power and 1/3 the cost would have played the same games just as well, IMHO. Too much attention is being spent on the potential, and not enough on the actual.