PSLS: While Sony’s acquisition of Gaikai was a huge move in the games industry, no one knew just how much support the cloud gaming platform would get from their new parent company, and when. Now, we’ve spotted a bunch of teases by the company at the level of games they’ll be streaming – and some pretty big names are included.
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Im starting to hate gamers in general. If Company X does it first its all BAD news.. But if company Z does it then its considered to be just as good as the second coming of Jesus would be.
Seriously, my HDD is busting thanks to all these free PS+ games.
If consoles are initially sold at a loss so the company can profit from software sales and licensing fees, what exactly is the downside to making those profits and licensing fees without taking the initial loss?
Please elaborate on how this makes 'absolutely ZERO sense from a business perspective'.
It makes no sense because why would anyone buy the PS4 if their PS3 can play PS4 games?
If you have good enough internet speeds then you would not need to ever buy a PS4, so allowing PS4 games to stream to the PS3 would be a terrible business decision.
Let's try again.
It was reported it cost Sony over $800.00 to manufacture the 60GB PS3 that I purchased for $600.00. They lost over $200.00 for every 60GB PS3 sold. With me so far? Sony lost over $200.00 on every 60GB sold. Why would they do this? Are they insane? No, they bank on making more profit on games sold and licensing fees than they lose on consoles sold.
Google Razor-Razorblade business model to better educate yourself on and further your understanding of the practice.
Now again I ask, what is the downside to NOT TAKING THE LOSS on the razors (consoles), but MAKING THE PROFITS on the razorblades (games)?
You don't think you'll be able to stream those PS4 games to your PS3 for free, do you?
Now if you still think I'm wrong, and I'm open to the possibility, please provide me with specifics based on the business model as to where my argument falls short.
Answer this. Does Netflix not make a profit streaming movies because you didn't buy the PC, SmartTV, tablet, or whatever device you're watching on from them? Is this a terrible business decision to not sell you the viewing device?
You seem to be forgetting something though - Sony want to be in the console hardware business. If they didn't they would just be a multi-platform software company like Sega now is. Following your logic, that would be the best thing for them as it completely eliminates any loss on hardware and provides them with the maximum possible audience for sales.
Making hardware does a few things that you are completely discounting.
1. It establishes a brand and instills that brand name into the public. Playstation would not be what it is today had they not released consoles. If they stop making hardware, there is no "Playstation", just games.
2. It enables them to push their proprietary formats, something Sony are notorious for doing. By streaming games to any and every device you can't make people be forced to buy your format like UMD, Blu-Ray or Vita proprietary memory cards.
3. Video game consoles do not follow the Razor/Blade model as their are significant reductions in the manufacturing costs of the console within a few years, allowing them to sell at a profit. The PS3 is selling at a profit now, and has been for about 18 months if I remember correctly. The 360 has been selling at a profit for 3-4 years. The Wii has been selling at a profit since its release.
Your Netflix example is pointless because Netflix do not offer a hardware unit for sale. Sony do. They WILL release a Playstation 4, no doubt about it. If they were to offer a PS4 but then say "You can play all the PS4 games on your PS3 if you want to though", noone would buy the PS4. Netflix don't have that problem - there is no physical Netflix box that they could be driving sales away from. If you want Netflix there is only 1 way to get it, which is streaming. If you want PS3 games, currently there is only 1 way to get them - buy a PS3. This would completely eliminate that "obstacle" for the PS4 games, giving people no reason to buy one.
It is a terrible business decision IF Sony wish to remain in the video game console business. If they want to just stick with the PS3 forever and pin all their hopes on streaming games then sure, it makes sense. Something tells me that they aren't quite *that* confident in streaming though.
Wanting to be in a particular business alone does not make it a sound business decision.
A lot of people, myself included, would buy a PS4 as we prefer physical copies of our games.
Brand establishment is unaffected by what is sold. Don't Capcom and Activision have recognizable branding as a publisher and Call of Duty as a game?
Propriety formats are great, but I would bet Sony has made far more money licensing Bluray for movies than the sale of those formats through gaming.
When profit on a console is calculated it's basically sale price minus production cost and doesn't take into account R&D. Chips don't become smaller themselves, cases don't redesign themselves. It also doesn't take into account warranty costs. MS spent a billion due to RRoD. When production costs are lowered, it's often accompanied by a retail price drop. If profit on consoles was the main focus it would make more sense to hold the retail price so the margin would increase. But it's not. Lowering production costs allows consoles to be sold at a lower price to increase the consumer base to whom content can be sold, which is where the real profitability lies.
Netflix is a prime example to show that it is the content that drives profits. Otherwise they would try to push a proprietary device for viewing.
Did MS, a well established brand, jump into the console business because of the profitability of hardware, or the increased profits of software sales and licensing?
I never said Sony should stop selling consoles, or would want them to, I just challenged torchic's assertion that it made zero sense from a business perspective. So far neither of you have been able to prove it would negatively affect the profitability of Sony.
Hence the statement:
"Backwards compatability is the easiest to stream and does not need the bandwidth required than an HD era (based) games."
RIP Onlive.
NOTHING wrong with my PS3 Controller thank you very much
It also shows that PS4 demos will be no problem to stream through the PS3 or Vita. This is why I believe that the PS4 will be the last console Sony ever make. There will be revisions, yes, but there's absolutely no reason to sell a more powerful console. All they'd have to do is upgrade server side
Its not going to happen obviously but yeah it "would" be possible to get the same graphics as the PS4 this way main difference would be that instead of selling you a PS4 they would sell you a cheap PS3 and invest the rest of the money to upgrade their servers then rent out the service to you via a subscription.
SONY really is the Only One pushing it!
But yes they are the ones to have theirs running first, since they put little efforts in creating it.
Uncharted in 1080p, omg.
Sony bought Gaikai in August for $380 million, SCE's largest acquisition.
Yea it will take a good amount of network but no Gaikai looks better than YouTube unless your talking 720p or 1080p quality. Gaikai's compression is very good.
Edit:
Am I the only one here stuck with dsl?
Comcast cost too much in my area for only internet (i shun cable)
brace yourselves, sony doom articles are coming.
5 reasons why Sony's Gaikai service will fail...
I hope they have fast internet on mars. So everyone can enjoy.
I wonder how long before the "Sony's Gakai will fail" articles come out in droves. The media can't have too many positive Sony articles after all.
And I wonder how long before the media make it seem like Microsoft are the ones pushing cloud gaming? lol
OnLive was sold for less than 6 million dollars, that is a huge flop. It looks like Sony is pushing for more and more digital content, they tried with PSP GO, they try to entice people to buy digital on Vita and PS3, now they are trying to eliminate actually owning a game, you wouldn't even have the game saved on a HDD. Streaming games is not owning games, licenses expire and issues will abound.
I have also seen a lot of comments saying this is Sony's answer to backwards compatibility, which I have to disagree with, backwards compatibility is putting in a disk that you bought in a previous generation and when you put it in a next gen console the game works. Making you buy the game over again and streaming it isn't backwards compatibility.
I'm surprised so many people here are happy about an obvious attempt to get rid of physical media as a whole
Apple is toying with it now as we know, but as far as gaming goes it looks like Sony is the only one making this a worthy atempt!
Not to mention most who said they would never give up physical media.
OnLive was valued at one point at about $1.5 Billion by some analysts but when a business gets into the kind of trouble OnLive did then it's bargaining power with buyers is basically nullified.
SONY have no boundaries
Nothing has been announced yet so why all the negative posts here. Just cause you need a physical copy? Great thing about cloud service is that you can play anywhere ( bandwidth permitting ) and on multiple devices. Had this been an MS announcement those physical media needs would be greatly reduced. Funny how this website works...
No, I'm pretty sure if MS did this we would see a lot more hate. For the longest a lot of N4G members dreaded going digital and always supported physical media. The arguement was that they wanted to actually own the disc.
Another complaint was that MS having their exclusives on PC's but now a lot of people can't wait to play PS3 exclusives on other platforms.
So the the views I guess has shifted away from just being tied to one platform and ownage of actual copies. It seems a lot of people do want to play games on their mobile device through streaming.
"I think a subscription service with an annual fee (or monthly) for older games, and the option to also buy new games would work great."
PS+??
PS3, PS4, Vita and Sony Mobile games all available to play across any Sony device.
That would be the killer blow.
To me this looks like the Playstation consoles will be an "always on", constantly connected to the cloud for streaming, game saves, game content etc. etc.
Interesting indeed...
what will be coming to PS3, that is what I wanna know. Just tell me what I have to pay. As for this news, just bring it to Vita and you have yourself a hit.
My laptop is so used to dsl speed it (and i was too) was overwhelmed when it had a taste of 45mb comcast. lol