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Submitted by Abriael 704d ago | videocast

How Does PlayStation Plus Make Money?

Michael Pachter discusses PlayStation Plus and more. (Michael Pachter, PS Vita, PS3, PS4, Xbox One)

SynGamer  +   704d ago | Well said
Why do people listen to this fool? 9 times out of 10, his "predictions" are completely off. He provides nothing of value, unless you want a good laugh now and then.
Ultr  +   704d ago | Funny
Laughing is the key to happiness...
So he provides the essence for a happy life.
SynGamer  +   704d ago
Laughing because something is funny? Yes, valuable, laughing because the situation is terrible/bad/frustrating, not so great ;)

My biggest issue with Pachter is his "predictions" can affect companies' stocks, and with his track record of being wrong most of the time, this concerns me...
BG11579  +   704d ago
Worse part of this, this guy actually makes a lot of money saying this kind of stuff...
GarrusVakarian  +   704d ago
"How Does PlayStation Plus Make Money?"

Step 1) Charge £40 per year for PS plus.

Step 2) People buy it.

Step 3) PROFIT!
devwan  +   704d ago | Funny

How does Michael Pachter make money?

Step 1)Have an opinion - the more controversial the better.

Step 2)Ummm he's never had need for a step 2.

Step 3)PROFIT!
WalterWJR  +   704d ago
The funny thing here is pachter think you only get 10 games a year. it's closer to 10 a month, what a complete idiot. How does he get paid to talk about the gaming industry?
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One_Eyed_Wizard  +   704d ago
Pachter doesn't make money off the accuracy of his predictions. He makes money off the controversy of his predictions.

In other words, he doesn't have to be right. He only has to make people talk about it.
andibandit  +   704d ago

Im pretty sure he meant 10 big games.

Anyways i dont see how anything he said this time on pach attack is wrong, unless all of you above actually believe amd is going bankrupt within 7 years
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Tiqila  +   703d ago

I 100% agree!
pixelsword  +   703d ago
How Does PlayStation Plus Make Money?

Make everyone pay for it.

The end.
Godmars290  +   703d ago
forgot the part where they have to buy or pay for the rights for "free" games.
caseh  +   704d ago
Because he's quite engaging and he knows a lot of people in the industry.

He only suggests what may happen based off current trends, past trends and word of mouth. He isn't an oracle but oddly enough, he is often right about many things, however most articles are only posted when he is wrong...never when he is right.
kreate  +   704d ago
His predictions of the future are usually wrong.

His 'predictions' of the current industry is right. But half of n4g users can do this.

His explanation of why he was wrong is superb though. This is where ppl fall for him.

He himself said he doesn't need to be right. So he's usually not right.

He does what he does becuz....

"It's a profit deal!"

(Ca'ching! Money drops over the background)
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rhcpfan  +   704d ago
I remember a few years back where he was saying how gaming PCs weren't nowhere near as powerful as the PS3.

The guy's a joke.
caseh  +   704d ago
Got an actual quote for that? It's a well known fact that Cell processor was an absolute animal for its time and 'power' wise he was correct.

A clustered set of PS3s would demolish anything that AMD or Intel had produced for the consumer market around that time.
Mikethejew  +   704d ago
When the ps3 came out it was true dumb fuck
rhcpfan  +   704d ago
It was on an episode of the bonus round on gametrailers during the 09-10 I believe. Geoff Keighley said how you needed a 1500$ PC to compete with current Gen consoles then Pacther added how that still wouldn't as powerful as a PS3. I'm too lazy to hunt down the exact quote, but maybe someone else can shed a light on that.


How about you learn how to construct a proper sentence?
jrbeerman11  +   704d ago
Grammar police for one missing punctuation?
rhcpfan  +   703d ago
I don't what to tell you. He and 17 very intelligent users seemed to jump to the conclusion that when I said "a few years back", it automatically meant 2007. Not really surprised though as this is N4G after all.
hay  +   704d ago
Humans like baboons.
thekhurg  +   704d ago
His predictions are right more often than not. But like with everything on the internet, only his wrong statements are brought to the top of the pile and hammered to death by the legion of know-it-alls in the community.
andibandit  +   704d ago
I particularly like all the bandwagon haters who dont even watch the episode, but just write
"Why do people even listen to this guy"
jrbeerman11  +   704d ago
I watch his show regularly and wonder why people think he's always wrong.

Of course he isn't always right, nature of predictions.

Does anyone listen to sports radio? They are wrong 80% of the time and will kill anyone with a different opinion.
Crazyglues  +   704d ago
Wait when I first read this, I was like are you kidding me...

"How Does PlayStation Plus Make Money?"

-They charge for it.. 49.99 yearly

||.........___||............ ||
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Crazyglues  +   704d ago
Really who disagrees with this, can you please tell me where Playstation Plus is free.. because I would like to sign up there..

Instead of paying... LoL
nirwanda  +   704d ago
They probably don't make that much money from it with the amount of games they give away, but the whole point of it is that takes people like me away from an Xbox 360 to a ps4.

Lets be honest its worth more than the price you pay for it by quite a margin.
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jrbeerman11  +   704d ago
you "read" the video?
KwietStorm  +   703d ago
So do you think Sony and Microsoft make 400 and 500 dollars for every system sold? It's been it straight forward like that. Sony doesn't just choose other developers games and offer them for free. The question, "How does PS+ make money," doesn't insinuate that it does not make money. It's asking how do the profits work, as in profit margins from those $50 subs after the deals behind the scenes have been put together.
Mikethejew  +   704d ago
Because hes a whole lot fucking smarter than you. Im in the industry and believe me all developers and publishers listen to him. Because his job is to tell investors if they will make money investing in our company, not argue with fanboy tards on n4g and gaf.
KwietStorm  +   703d ago
What industry is that? The "I'm gonna fake it til I make it, talk down to people, make myself feel superior" industry?
BX81  +   704d ago
snarf snarf
jmac53  +   704d ago
Pachter has become a tabloid junkie. He thrives off of the limelight and will say anything controversial to get the press. Just watch his videos and you will see how arrogant and full of himself he is.
TheTowelBoy  +   703d ago
I'd say 9/10 he predicts stuff that is PAINFULLY obvious, or he's wrong lol
showtimefolks  +   703d ago
Remember when Microsoft doubled the price of Xbox Live? Did you play Grand Theft Auto V when it came out in 2010? Were you pleased that Kinect launched at $50? Are you happy that the console wars have finally ended?

If none of that sounds familiar, it’s because these are just a few of the widely off-the-mark predictions of video game industry analyst Michael Pachter.

Pachter is wrong a lot. He predicted that we were in the “last generation of consoles,” before the Wii U, PS4, and Xbox One were announced. He predicted Kinect was unlikely to sell for more than $80. He promised Grand Theft Auto V would arrive by 2010, then by 2011, then by 2012.
joab777  +   703d ago
How does valve make money? What is wrong with this guy? He has too much time on his hands.
FanboyKilla  +   703d ago
but go to his articles with negative xbox stuff, and the same mutha f***ers in here bashing him, will be praising him there.smh sigh
chrissx  +   704d ago
Lol Patcher the clown.
BX81  +   704d ago
Says the guy wearing sunglasses inside.
RedDevils  +   703d ago
lol agree
Rimgal  +   704d ago
My question is how does this guy still have a job?
Sharius  +   704d ago
as long as you keep click in his link

seriously, this guy is nothing but a clickbait, that's why he still has his job
Rimgal  +   704d ago
Thank god for adblocks then.
Capt-FuzzyPants  +   704d ago
I don't think he gets paid for this. Gametrailers does a show with him every week and he agrees to answer questions. His real job is to analyze the industry and give advice when and where to invest. I don't know why people get on him so much, he is usually pretty accurate and when he does make crazy, outlandish predictions he prefaces them by saying something to the effect of "this won't happen, but [insert crazy prediction]. People that make these articles take what he says out of context and tone all the time to make him look like an idiot. Actually watch the videos and you will see.
Goro  +   704d ago
What a dumb article, PS Plus makes money because it's a PAID subscription service. They make more money from subscriptions than they pay the developers to put their games on the IGC.
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Omar91  +   704d ago
I think what the article or the question is trying to say is with the amount of free games sony gives, how is it that they are making a profit out of it?
Goro  +   704d ago
I explained in my above comment how they are making a profit out of it, seems like common sense to me.
Panthers  +   703d ago
All I know is that I am profiting from PS+ every month, so as long as Sony can keep it up I am happy.

I just wished I didnt miss out on it for so long. Thank God PS4 forced me to get it. I would have never known how awesome it is.
jrbeerman11  +   704d ago
you do know that his show is a Q + A right? so hes answering questions. He also does not make the headline for gametrailers nor N4G.

This isn't an article at all.

Not to mention that the question was asking for more details on how exactly the payments worked for the publishers whos games were on the service.

Its also 1/3 of the video.
KwietStorm  +   703d ago
No, you didn't explain it. You assume that's how it happens, but you have no idea what the numbers are, and you have no idea how it's handled from game to game. That's what's being asked and discussed, specifically how the program works. It's not a simple "do they make money.?"
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Petebloodyonion  +   704d ago
I know that Pachter isn't the most loved guy around here but at least watch the video.
Someone ask him a question about how PS+ make money with the free game program and he provided a logical answer.
As for his job, it's not about giving is opinion about the video games industry but about being a analyst for investor.
and at that, it seem he's quite competent.
hay  +   704d ago
Answer, which was released and talked about multiple times(try Googleh), brings nothing new to the table along with his legendary legacy of being doubtfully precise.
andibandit  +   704d ago
I guess they should ask people to stop asking questions on the show, if it can in anyway be found on google, and of course what you find on google is always fact..........
hay  +   704d ago
Of course, because we all know that people who live by packaging and re-selling in 90% incorrect information are the biggest gifts of humanity we should cherish that 10% of the time they are right.

This just makes my education hurt.
lonewolfjedi  +   704d ago
all I could was face palm hearing him trying to explain how playstation plus works. add on to that pachter knows if somebody grammar is incorrect in their question but doesn't know how playstation works wtf. the rest of the video was pretty good and interesting.
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speedforce131  +   704d ago
Pachter strikes again! All kidding aside, he gave a pretty basic answer but it's a little more complicated than that.

First of all, PS+ has different subscriptions. Not every PS+ user is paying the same amount. Some are paying more than others, and others are paying less.

Obviously the 49.99 one is the best deal in the long term, however the 17.99 presents a decent term at a less upfront cost. The 9.99 sub is for users that only want certain games so their usage pattern is a bit sporadic compared to the other two.

Keeping this in mind, the last two type of users end up paying more in the long run than the one that paid more up front. Even if they don't, the sheer amount of people means that while one guy got PS+ for one month, there are 11 other people that did the same, which makes them more money over the course of the year (12*9.99 vs 49.99). The options in subs open up the service to people who otherwise wouldn't get it.

Beyond the subscription costs, then you factor in Pachter's answer regarding the differences in usage patterns for each subscriber.

Some people will take every game, some people won't. You might have a game that got, lets say, 100k downloads, but the subscriber base is 1 million (these are just examples don't shoot me). Sony only pays for the downloads, so there is excess funds from 900,000 people that did not download the game.

In addition to that, publishers have a huge incentive for putting a game onto PS+. Yes, we've had some AMAZING games on PS+ such as the latest TR, Bioshock Infinite, Metro Last Light, Borderlands 2, etc. Keep in mind that while we got those games for free, each game (especially BL2) has substantial DLC and that DLC generates extra profit for the publisher. In the end, we all win. Pubs get paid, Sony gets paid and we get a lot of games for cheap.

You're welcome Microsoft. Send me a free X1 while you're at it. I just saved your GwG service.
Shad0wRunner  +   704d ago
Pachter gets a lot of hate, from a lot of people. Granted, this guy isnt ALWAYS right. Is anyone EVER always right about anything? I've seen meteorologists predict the weather and get it wrong. Doesnt mean the weatherman is stupid. Or sucks at his job.

Consider this: Where do you work? Some of you might work at Wal-Mart, restaurants like McDonald's or Burger King, some of you might be auto mechanics, telemarketers, or work at a gas station. Some of you might not even be working at all...or still in school. That being said, what do YOU know about THIS profession or industry, to qualify you as experts in the field? THIS is Pachter's job. He is an analyst for investors, like petebloodyonion above me said. He get's paid to "know his shit" and analyze. I'd say he's more qualified to tell someone how PlayStation Plus works...than ANY of us, here. You people treat this guy like he's Nostradamus. LOL. Then lash out at him, when he's wrong. Well, even Nostradamus was wrong sometimes, too. So what? Stop lookin for a cross to burn, everytime this guy makes a miscalculation.

Let the man do his job and get off his nuts....
Hicken  +   704d ago
You know, as consumers and people who are dedicated enough to come to a site like this on a daily basis to get the latest gaming news, I'd say many of us know more than you give us credit for.

Many folks here are part of the gaming industry(though some make the claim with dubious credibility), often as indie developers or retailers. Some of us are economics majors, meaning we know something about various markets and how different influences can change their direction.

Some of us just spend a good deal of time soaking up every bit of information we can find on whatever subjects we come across.

The problem we generally have with Pachter is that many of the predictions he makes are so OBVIOUSLY wrong or, alternately, so OBVIOUSLY right that it's hard to figure anybody missing it. People give him flak because there have been far too many occasions where we- who are not qualified to know so, according to you- can tell he's going to be off on a prediction, and even give an estimate of how much.

Tell you this: I wouldn't want to risk my money with an investor who could be outdone by a video game forum full of armchair analysts on a fairly regular basis.

And maybe it's just in the gaming industry, while other predictions are more frequently right. Maybe when it comes to oil futures or feather bed futures, he's on the money 90% of the time. Then, in those cases, he's perfectly fine to listen to.

But as it pertains to the gaming industry, he's not very good; with respect to that- and given that he should have far more pertinent information at his fingertips than we should- he should probably stop predicting.

Also, it's kinda our job- or that of investors, and who knows? maybe someone in here is affected by his analyses- to tell people when they do THEIR job wrong. Or should we just shut up and watch the train wreck happen?
Summons75  +   704d ago
Easy, they promise a bunch of "free" games but forget to mention that in order to keep said games you need to keep paying for them So because a lot of people signed up under false pretenses they need to keep paying because instead of buying the games they relied on plus to provide them and would have a small library without them.

For Ps4 its basically xbl gold except not all games require plus to be online but a lot do. Plus seems more worth the money on the Ps4 since you get access to online plus a rentable game or two on the side. They just need to build the "free" games on the Ps4 fast since there isn't much which is understandable at the start of a new gen
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ThePsychoGamer  +   704d ago
"Easy, they promise a bunch of "free" games but forget to mention that in order to keep said games you need to keep paying for them So because a lot of people signed up under false pretenses"

Now that is bad... Or it would be if that's where remotely true, not only can you read it on PSN+ cards, or from the PSN, but every time you download a game through plus you get a notification telling you that you only have access to said game while you're a paying member.
Summons75  +   704d ago
I've never seen it on the cards and on psn it's written at the very bottom of the small legal stuff that most people never read. It should be in bold and on top. They should just say it's renting games instead of FREE games, FREE implies that it is yours for no cost. If I give a friend a copy of a game I don't play that would be a FREE game, if we end up not being friends I don't demand the game back because I gave it to him for FREE, not on a loan.
GentlemenRUs  +   704d ago
How does Patcher make money? Oh yeah...

By idiots who keep clicking on these links, Stop paying him guys!
Capt-FuzzyPants  +   704d ago
This isn't at all how he makes money. All this goes straight to gametrailers so I'd say you are the idiot.
GentlemenRUs  +   703d ago
They get the ad-revenue, Patcher gets part of that.
Visualift  +   704d ago
Going out on a limb here... but I'm guessing they make money from all those annual subscriptions and online sales. People forget that Sony sells more than games on PSN.
mochachino  +   704d ago
Wow that was a horrible answer, he normally at least knows what he talking about. This time his "guess" was more of a shot in the dark. He should have just said "I have no idea" because it was clear he didn't.

It's more likely Sony dedicates a percentage of Plus revenues to purchasing game deals. I doubt they just give $10 a download. It's probably a lot more complex by taking into account a games monthly sales at the time, the games price and giving companies the amount or close to the amount of profit they would receive for a period the game is on Plus. It's like an advance on projected sales on top of any other retail/non Plus sales they'll still get.

Sony's not going to pay for every download, that could be disastrous. A lot of people download everything just because it's free even if they don't plan on playing the game. OR download just to "try" the game, hate it and never play again. More importantly, The number of downloads would far exceed any monthly sales the game would have if it weren't on plus. Devs would be getting far more "sales" than they ever would were they not on Plus. Sony's not going to pay for false sales, they probably pay for the real world sales the game has at the time which is always low by the time it reaches Plus. They're not paying $20 million for Bioshock when it's only selling 20,000 a month at the time. That's ridiculous.

A lot of the games on Plus are down to $30-$40 by the time they arrive on the service and selling only 25000-50000 a month if that. Sony probably just gives them their monthly sales profits which isn't much considering the game's price is already discounted in stores and peak sales long over.

So If Plus has 10 million subscribers at average an $50 a subscription (in Canada it's $50), and brings in revenues of $500,000,000 per year the budget for free games is maybe 1 million a month which is nothing to them. If they're paying devs $250,000-$500,000 for a game like Tomb Raider or Bioshock, and indies a bit less of course (due their lower prices and generally smaller volume of sales).

Basically Sony pays the devs the amount of profit they would have made from the game sales for the duration the game is on Plus, which by the time the game is on Plus isn't THAT much. Note that from a $40 game sale most of it doesn't go the pub/dev, so Sony's not buying a $40 game, they're buying the devs game profit which is probably closer to 25% of the price.

That my guess, and I think it's a hell of a lot better than Patcher's.
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rainslacker  +   704d ago
I think in addition, some publishers use PS+ as a marketing tool. In these case it means that Sony may not even have to pay. Borderlands, for example, had Borderlands 2 coming out a couple months after they offered it. It allowed people to try the first, thus garnering new fans who were more likely to buy the 2nd game.

Then there's games that have a lot of DLC attached. By the time they're released, their retail run has dried up, and likely their DLC run, but making the game essentially F2P means that they get the possible revenue from DLC purchases.

This goes for AAA games. For indie titles, the price could be low just for discovery. How many PS4 owners now follow Housemarque due to getting Resogun for free? Although in that case it was a Sony published game, so while they didn't make money off it, they didn't really lose it either, and they now have a strong dev that people know about.

I think a lot of the smaller PSP/PSN games they release tend to be 1st party, however I do know that Square has offered a few games on there. They may have had to pay for those, but I doubt it's in the tune of hundreds of thousands, and certainly not on a per download basis. Probably just a flat amount regardless of downloads.

Overall it's a great model that seems to benefit all those involved.
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mochachino  +   703d ago
Totally agree. Housemarque is a perfect example. I didn't even know who they were previously now I eagerly aniticpate their next release.

Same with Red Barrels Studio, Outlast was probably the scariest game I've ever played and one of the best games I've played in a while.

In my mind, PS4 already has better exclusives than xone IMO for my gaming tastes. That is if we don't count PC of course.
Father__Merrin  +   704d ago
he's talking out of his bottom again, plus gives you a shed load of games today even more so if you have the 3 Sony console's

I'm snowed in with titles having P.S.3/4 add a vita on top of that and you even more snowed in, how can that not be a good thing
Jovanian  +   703d ago
How does PS+ make money? By ripping people off making them pay for online multiplayer, and offering them bottom of the bargain bin games which have been discounted to hell that everyone and their momma already has played
il-JumperMT  +   703d ago
Someone is jealous people are getting games like Bioshock Infinite 3 months after release.
tweet75  +   703d ago
ive noticed most of the freeor discounted games I already own. This is how sony makes money its thought out. If they put slightly older big titles on ps plus for free most gamers will have already bought them and sony only has to give a small amount away for free. I have learned though if you dont buy games early and wait thats where ps plus value really shows.
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Dan_scruggs  +   703d ago
He does get one thing right. Nothing is free. PlayStation Plus is a 50 dollar yearly premium. The money for the games come out of that. The cost for the game realistically is significantly less considering it is nothing more than data to be transferred. There is no physical copy so that means no manufacturing fees. Some people do take more and some take less. Not everyone wants every game. This is not unlike the Steam sale where a 50 dollar games are suddenly 2.99. The cost of the game is coming out of the 50 dollar subscription fee. Plain and simple.
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DoggyBiscuit  +   703d ago
Why we can't get a real Gamer to tell us these things, the only time ppl actually pay attention to this fool is when he trolling on Nintendo
Petebloodyonion  +   703d ago
Actually People around here hate Pachter when he putting down Sony, he's stating the obvious when's putting down Ms and he's logical when he's badmouthing Nintendo!

The cold hard truth is that he's often right and logical when you look directly at the source (like is capsule on Gametrailers and not website that try to spin what he says like how Xboxone will destroy everything when he clearly said at E3 that Sony had a huge advantage over Microsoft due to having a lower price.

Here's some sa
D0UbleF_  +   703d ago
Money or not.
I know a couple of facts for sure:
I paid 45€ for a year of Playstation Plus, got 3 months extra for free at that time of the special offer.

In these months since August I kept on downloading free games for my PS Vita, PS3 and now also PS4 since December.

The games I've been downloading for free were mostly available on PSN for normal non PS+ users the month before it for prices around 29,99€ and 39,99€ even games for 45,99€ and so on. (examples are Hitman Absolution, Bioshock Infinite, Metal Gear Revengeance,...)

I did a little counting up last week.
I'm brainfucked.
Since August I downloaded for over 500€ worth of downloadable game content.
And I'm only 7 months member.
This is better than any Steam Summer Sales :D

Playstation Plus = Worth the money, worth fucking everything!
Flames76  +   703d ago
They dont hell the playstation division hasn't made profit in 8 years now.I have no idea how they are even still around?5.8 billion loss on the PS3,2 billion loss on the PSvita,and now $60 loss every PS4 sold
pupa  +   703d ago
In my view just looking at the PS4 popularity and sales numbers indicates to me that the PS+ service is a win win generator for Sony and the playstation brand!

As for Pachter...just no comment!
Azzanation  +   703d ago
Easy Sony don't make money from PS+, have you seen Sonys income lately?
A LIVING LEGEND  +   703d ago
Yes,nearly double my own.
Really though,between a few of the more intelligent posts above not only has the question been likely answered,Pachters usefulness is very questionable moving forward.
Orionsangel  +   703d ago
Playstation Plus isn't giving away free games. It's basically a rent a service. You pay money and you get to play certain games they choose that are connected to your plus subscription. Fail to pay when your subscription runs out. They take back the game.
pupa  +   703d ago
Funny that, when I am off line I can still play the free games. No need to be online! (wink)

Now explain that then.
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Orionsangel  +   702d ago
Why would not being online effect Plus if it's already part of your account? The activation is on a timer. When your time is up, online or not. Plus goes down, until you pay again.
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Sadist3  +   703d ago
I'm sure what all you people failed to realize is that Sony pays publishers/developers to have theirgames available for free on PS plus. So basically a lot of the money that people pay for PS plus, where it may not directly be going straight to the publisher, is still being used in the process in paying publishers for free games. So if Sony is recouping the money spent, it's still technically not making a profit off of PS plus.
#24 (Edited 703d ago ) | Agree(1) | Disagree(1) | Report | Reply

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