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.