Sony only has to sell roughly 1.7 million PS4 games or about 286,000 PS4′s to cover their entire PS4 launch marketing budget.
That 100m will be easily made back from launch sales
Made back maybe - but they'd still be $100m down. The console isn't free to make. Nor does Sony receive 100% of the revenue from game sales. This article is very wide of the mark to say that they only need to sell 284,000 games to make their money back.
PS4 price and marketing budget are unknown. Joke article. I hope it isn't true. I don't want SONY losing half their fanbase AGAIN this gen due to poor marketing.
Well thats an additional 100M USD they will need figure out how to tax from their customer, nothing comes free.
@NeverEnding1989 personally I think they lost their fan base on price and availability - not marketing. I don't think people said to themselves 'sod the PS3 I hate babies crying in adverts'. It also isn't about how much you spend. For example - say they ran the same adverts again, but spent $1 trillion on making getting advert shown everywhere you turned. If the advert is a dud, it wouldn't make much difference. Just needs to be good advertising with a sensible budget.
@bangshi The math in the article is wrong and your theory on making the money back might also be flawed. 1) the $100mil budget is for advertising a product and all which comes with it. Meaning, if they can shift enough of this product and anything related to it (games, accessories, services, BR films) that lead to profit, the campaign is successful. However, the more they sell will reflect how affective and therefore successful the campaign had been. 2) if we assume Sony makes no money of the PS4 and only from games, services and accessories and they make $10 from each game and $5 from accessories, Sony will have to shift 10mil games or 20mil accessories or a mish mash of both. 3) however, the truth is far more complicated than that. What about factoring in freebies and other promotions around the globe? What about those people who buy more than one console and more than one game? 4) what about the snowball affect which will come as a response to people migrating to a new console not due to the campaign but because they want to game on what their friend or cousin is gaming on as a result of the campaign. In other words, there is no sure way of calculating how many units Sony needs to shift if each or how much the cost of each is, but one thing is for sure, if it's successful, it will be a $100mil well spent as the fruits of their labour will keep coming for years to come.
fei-hung Yes, there is a way to calculate the number of units, games and accessories that need to be sold. Your "snowball effect" scenario is the basis of marketing and yet, each of those people will still be buying a console, game(s) and possibly some accessories, all of which will be accounted for in sales numbers. Nobody can predict what the exact numbers or proportions will be, but Sony can make an educated guess. This, in turn, will be a determining factor in how much money they are willing to spend on advertisement.
They spend 500 mil alone on Kinect launch marketing... But higher quality of PS4 will make up for its smaller marketing budget
@bangshi 1.7 million games, 286,000 ps4's.
@bangshi If advertising meant nothing, then the Halo titles wouldn't have needed those massive advertising sprees they went on. Advertising is key for any product. You really need to take a step into the real world if you think that's not true.
I dont think you are very smart
They would be $100 million down if their $100 million marketing budget increased global sales by 0%. You really think $100 million is a lot in a multi billion dollar industry? Are you from a communist country or something? They wouldn't "invest" $100 million if they thought they wouldn't see a return on it.
@bangshi Do you even know how much MS spends to advertise lol ?
i'm guessing the PS4 will do pretty well. they wont be spending as much on adds as M$ does but that didn't hold the PS3 back.
This article is written by someone who doesnt know business retail at all. First off the ps4 console has very low margin so not much money will be made on it. I agree with you on the software statement. They will make some money on that but most of it is paid out to developers and distributors and publishers.
this guy just felt like making a ps4 article
Sony are in serious debt buddy.
Yet they are still on full throttle. Thank Sony
its not just how much they have to make back, but how they spend it.
Only $100ml? If MS spent $500ml on an accessory for a 6 year old console expect a $1bl budget for the next xbox. Sony better hope and pray it doesn't launch this year or it will likely be a waste of money for them. @MariaHelFutura And why the 360 outsold the PS3 :)
Which is why MSFT doesn't own many relevant development studios.
and bingo was his name oh
Microsoft doesn't have as many studios because they were smart enough to see their studios were losing money and shut them down. Only a fool continues in a losing business. If people want a business to stay around they need to buy the products. Constant losses is a dumb business model for any company.
Ooooh slick burn!
That's one way to look at it. Or, you could look at it like they're to stupid and don't have enough of a creative vision to carry on successful 1st party studios like Nintendo and Sony have done for years. I can't deny from a business standpoint they're doing well. They're selling people a service that is free everywhere else and manipulated their way into the casual market by attracting hardcore gamers first, which has all worked out great for them. I hope for your and MS sake the 720 is Kinect only, cause in reality it (by your thinking) would be stupid not to be.
This guy just said microsoft doesn't have enough creative vision... Robo replies anyone?
@maria "They're selling people a service that is free everywhere else and manipulated their way into the casual market by attracting hardcore gamers first," I agree 100% but why is it that when I say something similar I get debubbled and disagreed to hell and called a butthurt fanboy? I find it exceedingly odd to see these users like dcbronco who think it's great to have studios closed down if they don't bring profits with every game they put out. I thought this was news for gamers, not news for investors. Same reason is used defending MS by maniacmayhem who refuses to admit that having more games is better than less games. "Do I think MS should come out with more original IP's? Yes, but only ones that I might care about. PS3 may have more exclusives but most of them I don't care about personally. inFamous, God of War and Disgaea are the only games i am excited about for the PS3. Last of Us looks good but I would rather get Bioshock:Infinite. So just because you have more exclusives doesn't make your system better." See MS gets off the hook cause of personal taste. Sony's PS3 is no better cause of personal taste too. Mayniac also says he has been here since the gen started and he hasn't seen any bias or animosity against PS3. Go figure. How about it Maniac? Is Maria a fanboy too. He says the same things "manipulated their way into the casual market by attracting hardcore gamers first" I say but he has 6 bubbles so how about it?
a man laughs
But the 360 didn't outsell than the PS3. It sold the least of all 3 consoles. Imaginary aspirations don't count, sorry.
@cocozero the 360 outsold nothing its sold the least this gen
The 360 is still in 2nd place buddy. http://www.vgchartz.com/ana...
@jcnba28 Okay now hold those 360 numbers for about a year .Then compare it to ps3..
@jcnba28: In Europe the 360 had a 16 month head start in sales. That's nearly 1 & a half years, and what; it's around .5 million ahead in it's lifetime? If the PS4 has a headstart like the 360 had over the PS3, then it will blow the 720 out-of-the-water at retail.
@jcnba28 Numbers are inaccurate. Most likely just old and outdated.
@jcnba28 Are those vgchartz numbers I see there? http://3.bp.blogspot.com/_w...
good point though, even if the next xbox is total garbage, microsoft still have got the means to advertise the crap out of it, just like they did with kinect, and even though we all knew it was a useless product people still bought it. if that 100 million budget is right then its definitely not going to be enough for sony.
Big marketing budget isnt saving Windows 8 or Surface. They are still running ads for Windows 8 and the thing isnt selling, its in tv shows and everything and still it doesnt help. They need more then just a bunch of marketing.
The tablet competition for them is more heavily advertised than their console competition. They are competing with Apple right there among others.
LOL tablet competition there the one's trying to get a piece of it, just spend more on advertisement that should help right? or maybe there just a little to late? by the way who is the competition on the PC Market, Windows 7??
PS3 has already passed the 360. Once numbers are given again, you'll know this. As for advertising, hopefully the same gimps that bought the 360 won't buy the 720. Gears - Little men, big suits. Fable - blah Forza 5 Halo - Fight till the end Alan wakey wakey Milo - Is he a real boy Kinect - 100 titles of pure crap.
Gears I have respect for as just a fun "Shoot-em-up". That's nice every now and again. Not saying that it convinces me to buy an xbox, but it can stand as a good game series (plot, not so much though). Fable is a really sad story. The xbox lacks any really convincing exclusive RPG's now. Fable once held a lot of promise. Forza 5- Not many people care about Forza any more, never really played it myself. Halo- Used to be REALLY good. Haven't played the recent ones, but I can tell just from my friends that it is not as big as it once was. Milo is eh. Kinect is indeed 100 titles of pure crap.
Although his one bubble does indicate a troll, he actually does have somewhat of a point, If microsoft can spend 500 million on some cr@ppy casual peripheral, then surely Sony can do better with the launch of the PS4 this is Sony's chance to reclaim the throne. They could do better, what I never understood is that this company owns Columbia pictures one of the leading film companies in the world, Last year Skyfall was the second highest grossing movie of 2012, would product placement have hurt them (PS logo graffiti in the background) Or what about their music division Sony Music is the second largest record label in the world and look whose signed to them, only the biggest the most popular lol "artists" in the world Adele, Chris Brown, One Direction (cringe), Jlo, Pitbull the list goes on don't get me wrong I think their music is the worst thing since aids but a bit of products placement in their crappy videos would do them good, look how much views they get on youtube, Sony isn't make that great use of their resources.
360 outsold PS3? Not according to a little thing I like to call math. PS3 reached 70 million sold nearly a year faster than 360.
Funny thing bout statistics is that they can be manipulated (from ignorance, accident, or on purpose) to make them independent of math.
How did the 360 outsell the PS3? It had a year head start in which it amassed a much larger lead than it currently has. You're really bad at math.
Wait. Are people even complaining about this? Microsoft spent half a billion launching Kinect. Not a console launch. A peripheral launch. Are there really people upset that Sony is spending 1/5th that on a full-blown console launch?
ps4 reveal have over 28 million view http://www.youtube.com/watc... and that's one video, not talking about sites ,forums etc ps4 reveal already did all the marketing sony needs this gen MS did every thing with xbox360 tons of ads ,spent millions on timed exclusives/DLC etc and yet they ended up being outsold by sony's ps3
I'm so excited and I just can't hide it. I want you.
haha Pointer Sisters...what a classic :)
Lol. Love the new avatar.
The Ps3 had a huge 150 million dollar marketing budget. The PS3 launch campaign was AWFUL (demonic babies etc.) . If Sony wants success they must have really good simplistic adds that tell you what the PS4 about. MS will come hard with their ample billions so Sony must have a strong ad. campaign.
What do you have against demonic babies? They need love too.
Why advertise it?. They advertised vita a lot but did it get huge sales ?. No.. It's people them selfs that advertise what they like. I never bought something because i saw it in tv or on wall..etc I buy what's good and what my friends and family buy. Note: They do the same too so don't tell me they saw it in tv..
They advertised Vita!?
The vita had a 50$ million dollar budget. For reference, the Xbox 360 both had $500 million dollar budgets.
If the vita wasn't limited, had games like gta/gt5..etc , Cheaper games and memory's it would have sold really really , i mean it , realllllllllly well because we wouldn't need to think really hard to understand how the vita works. I swear when i knew about the vita limitation i almost changed my mind on buying it. I bought it because i needed it. If i didn't i would have waited until it hacked or fixed by sony. So advertising didn't made me buy it. If your product is good and exciting it wouldn't need 1 ad . Even news channels would advertise it them selfs for free if it's that good.
Ok. Now explain the correlation between a dollar amount and a good ad that works.
Consumers what to see cool things that the console can do and the must have games it has, not what the console does to possesd dolls.
Good ads aren't cheap and people tend to lean toward buying products that are more visible. Aside from unpredictable viral ad campaigns, successful marketing usually requires a high dollar value. That's just the reality, unfortunately. Warren Buffet said he would spend $2 billion on Geico ads if he could. In 2011, Geico spent $994 million on ads. Everyone knows the Geico Gecko and the Geico Caveman. Ads like that cost a lot of money to buy from an agency and get in the public view. There is a direct correlation between dollar value and success in marketing.
Exactly. What the advertising war will come down to will be whether Sony can put up quality ads that MS can't match, or will MS simply overwhelm Sony with numbers. Sony can pull this off. They need to do better than this gen though. That was just sad.
Oh don't worry. They'll be getting all that back plus interest once it launches.
Budgets don't concern me, quality games do. It's true the 360 output (from a 1st party point view) slowed somewhat. But you cannot deny the marketing and quality of the titles that MS studios releases. Sony are consistent with their game output, but their fans don't reward them for it (IMO) as the sales are lower than many MS releases. This tells me 360 owners will either buy anything or Microsoft's marketing is spot on or both. I own both PS3/360 and am not loyal to either brand, I am loyal to gaming as a hobby in general. Wait til E3 then be sure.
How could anyone disagree with this? Very Valid points. -I personally have quite a collection of ps3 games close to 100 total -I own 2 ps3's -I own a vita with 20 or so games -I own a psp -I'm a subscriber to Playstation Plus and have been for 2 years now. -I also own A wii 3ds and 360 MY point being is sony brings the games as you said and as long as they continue to do so i will continue to support Unfortunately you also have people who will sit behind a computer online get all excited about new products saying things like im willing to pay "350 for the ngp thats my limit", and "oh ill pay 600 for the ps4 no more than that." But then when the time comes for the system to launch "oh no 250 is waaay too expensive for the vita." and I see it now "400 is way too much for a ps4" If this isn't the case then can someone tell me why the vita is struggling at a price much less than 350 and why many ps3 titles struggle to even break 1 million sales.
You have to understand that the people on the internet that Hype a game or a console DO end up buying. What you need to understand is that the internet gaming community is a minority, our words do not account for the majority of console owners. Now as for why PS3 title struggle to break 1 million this is a question that has been asked and debunked several times, what are these PS3 titles ? if it's niche games like Starhawk, PSASBR, and Twisted Metal then no friggin wonder, those games received lukewarm reviews and so they got lukewarm sales. If it's in general allot of it has to do with marketing. It's no secret that marketing has never been Sony's strength especially compared to Microsoft, the week before Halo 3 my god it was like the 2nd coming, Gears of war was marketed with a world wide hit single. Also people need to realise that PS games and Consoles have always had long legs, many people didn't think the PS3 would survive its 1st year then it went up to it's 2nd,3rd, etc; now look. Many people dismissed Uncharted 2 as a commercial failure at first despite the game is now sitting on sales of 7 million copies sold worldwide, that game sold purely based on word of mouth despite it's poor marketing.
Its a wonder sony can afford that much its make or break time for the company imo.
They did just make a 545 million dollar transaction after chinese regulators approved there acquisition of part of Olympus to become the largest share holder in the company. They also have 13.7 billion dollars in cash reserves. They are in a trouble but Sony are far from "make or break". http://www.channelnewsasia.... http://beta.fool.com/peterp...
LOL Are people really this stupid? Sony doesn't get full $60 from $60 PS4 game sold,not even remotely close.Not to mention that PS4 will be sold at (small)loss at the start. And since when PS4 marketing budget is some puny $100 million?
I agree that Sony will obviously not be making $60 off of each game. They have to pay the retailer, distributors, publishers and developers before Sony sees any of it.
They'd BETTER get their marketing into shape. It was marketing, late launch, high launch price, and slow initial software development that kept the PS3 from crushing the 360. It seems like Sony is trying to fix all of their past mistakes.