PlayStation Makes More Money from DLC, Microtransactions than Anything Else

Ever wondered why publishers include microtransactions in their games? A breakdown of Sony’s latest financial report, spanning the period April 2020 through June 2020, reveals that a whopping 41 per cent of its revenue was generated by DLC, microtransactions, and other in-game purchases. That’s an eye-watering $2.29 billion.

To put things into perspective, packaged software accounted for just $350 million, which represents 6 per cent of the organisation’s overall income. Hardware represented a similarly small proportion, at just $520 million. As previously reported, digital PlayStation Store software sales are on the rise, and represented 24 per cent of the firm’s total revenue, pulling in $1.37 billion.

[isarai]

Y'know what's funny about that? They have the some of the least intrusive and egregious implications of MTs, hell besides U4 MP they really only do proper expansions, i love it.

[stuna1]

Not only that look at the size of the fanbase.

[UltraNova]

The title is misleading as it alludes to Sony making all that DLC/MTs and distributing them through their 1st party games which in fact they take a cut on each item sold through PSN; that means 3rd party DLC/MTs too, if I'm not mistaken. That's why they make so much money there, not because they've suddenly turned into EA or Epic.

[fiveby9]

I agree. Sony takes a cut of all MTX offered through their store. e.g. Fortnite MTX, season passes, etc Sony gets a cut.

[RauLeCreuset]

It's also worth noting the affect social distancing is likely having on these numbers. Nevertheless, that' s a nice chunk of change. So can we revisit the supposed need of some publishers to increase game prices to $70?

[dumahim]

How is the title misleading? There's nothing there suggesting it's only from their own studios.

[indysurfn]

This is misleading DLC is NOT micro transactions, and the numbers are BUNCH together. this is an attempt to make Sony look like EA.

[Pyrofire95]

Not really, as long as you understand that Playstation is the whole platform and Playstation Studios would be only their first party games.

[NeoGamer232]

Yes, but it doesn't matter whether it is first party or third party games. This is a big source of revenue for them. That is really all this is saying. The title is accurate because this is the major source of revenue for Sony.

To me, it does not imply Sony is the bad guy, it just tells us where money is being made in gaming. And look at how low retail sales of games are now.

What is really striking to me is how little hardware is on the revenue side. People keep thinking that this is a big source of revenue but really it isn't. To me that support a shared specification for hardware between the major console vendors. Would bring their costs down and allow them to focus us where they really add value which is their games and services.

[Silly gameAr]

Yeah, that is weird. But, they have to make it seem like the one with the least MT's makes the most from MT's.

[ABizzel1]

Not saying this is right, but this type of data is exactly why Sony and Nintendo are to be respected and shows why Xbox was never in it for gaming. It's clear that going forward digital games and GaaS is the money maker for these companies, and yet PlayStation and Nintendo to this day still offer a majority of classic gaming options that focus on providing the best experiences possible from their teams, whereas, Xbox is allegedly moving most of their line-up into the GaaS realm where they can focus on services like GamePass to allow us to get a library of digital games at a low cost, in order to turn around and sell us DLC, Microtransactions, and other Add on Content.

It's always been about getting market-share with their console, PR and Marketing to hype their base/platform as the greatest place to be, and then turning around and milking as much money from them. This is why the Xbox bosses are the scum of gaming IMO, absolute trash because most of them aren't gamers at heart, they're wolves in sheep's clothing and professional con-artist trying to make as much money off of their community as possible by any means necessary.

And it's sad because their fans don't deserve this, GamePass is a solid deal for what you got this generation, but when things go GaaS, less first-party franchises start coming out filled with Add-on content, and the price of the service inevitably goes up, it'll be too late, because gamers will be too ingrained in the thought of paying $15/mo. as it creeps to $20 and possibly more, to ever leave the service unless MS continues to pay for 3rd party content.

I feel bad for their developers because they're games are made as if they have no life in them, and the devs don't care about making quality games because their overseers (Team Xbox) developer philosophy is all about how can we turn this game into something that we can continue to profit on for the next 5 - 10 years.

I get and understand offering the option for it, but when it becomes part of your game development philosophy, your main push and the selling point of your console, it becomes detrimental to the gaming scape, and I have GamePass as well so I'm part of the potential problem, but I can't support the underlining goal of what MS is doing with Xbox, because if it's successful this will be gaming going forward.

Unfinished, subpar games, that can be patched and fixed over time, whose primary focus is to milk as much money out of fans as possible over a 5 - 10 year period. That is not gaming, and if that's what it primarily becomes I don't want it.

[HotMoltenLava]

Really?

[UltraNova]

"...and I have GamePass as well so I'm part of the potential problem, but I can't support the underlining goal of what MS is doing with Xbox, because if it's successful this will be gaming going forward."

Look I've mostly found your comments to be well thought out and constructed but when you are admitting of paying (supporting) for the very same thing you are crusading against I can't help but cringe. This is not a personal attack, its just my honest opinion.

[ABizzel1]

@HotMoltenLava

Really.

@UltraNova

There's nothing cringy about it, it's just being honest. I have paid for this service, and I've been vocal about it. I have it for an additional 2 years, because I joined when it was $1, and it upgraded your XBL Gold to GamePass as well, so since I had 3 year of Gold, it turned into 3 years of GamePass Ultimate. I also have a little brother, who games and since I gave him my Xbox, GamePass was an easy way to get him plenty of games to play, since my mother is overall clueless about buying games.

So yes I have GamePass, and I'm stuck supporting it for 2 more years, the purpose of that was my decision afterwards which is clearly to continue to support Sony and Nintendo's practices to prevent a widespread ideology around a reduction in game quality to focus on maximizing game profit.

[UltraNova]

ABizzel1,

Fair enough. At least you clearly know what you are doing and why, which is more than I can say for most people.

[Chris12]

What has this got to do with Microsoft. Completely off topic. You Sony fans are absolutely obsessed with something you have no interest in.

[ABizzel1]

@Chris12

It's those of you who lack critical thinking skills that always resort to this being a bash MS thing or labeling people PlayStation fans.

MS and Xbox actions have made it clear that digital, service, GaaS, and additional content are their idea of gaming going forward, and as this chart clearly demonstrates that's because these are the biggest money makers for them. If PlayStation is making nearly 81% of its gaming profit from digital sales, Add-on content, and services then MS is making a similar percentage if not more with them focusing directly on those metrics across their exclusives and as we've seen their games are continuously moving towards GaaS.

This is a business, and I understand that, however, any company ran on fandom / providing a service needs to make sure they offer a balanced product that gives value to the consumer while providing a return for the company. Sony and Nintendo are doing this. GamePass is technically a great deal for consumers currently, but everything comes at a cost, MS has gone on record to say it's currently not profitable, so that means increasing the price of the service is inevitable, or the quality of games has to be reduced to cut development budgets. MS as a company is all about software and services, and they are forcing the Xbox platform to slowly become exactly that.

You are entitled to support whomever you want, but MS has shown me for the first time I have no reason to buy their console, even if I think it's a great piece of hardware when I can simply upgrade my PC GPU and get a PS5.

[Chris12]

@ABizzel1

Don't patronise me with your 'lack of critical thinking' BS.

You have the nerve to talk about value to the consumer, so where is your article taking about Sony making consumers buy a new console to continue playing new games. Even worse, you have to buy a second controller if you want to couch co-op because your old one won't work. That's total nickel and diming the customer base and a great way to subsidise the console itself.

About time you took your own advice on critical thinking and purchases and not trying to lecture others on theirs.

[TheProblem]

Agreed.

Microsoft have looked at the mobile market and are trying to bring it to consoles. Some of those mobile games are cash generators.

[-Foxtrot]

Yet it’s funny as games like Spiderman, Ghost of Tsushima, God of War, Ratchet and Clank, The Last of Us Part II, Dreams and the like don’t include them

[CorndogBurglar]

Spider-Man has paid DLC.

[Bathyj]

I'm completely fine with that type of DLC. We got a full game for $60 and a damn fine one at that. And then DLC came afterwards. That's how it should be.

[-Foxtrot]

I meant MTs

[UltraNova]

Expansions or any extra content (DLC) are welcome when they already offered a full game at launch.

[RgR]

Depending on the size and importance I would normally call these types expansions.

I'm fine with expansions to games after the fact...I'm not fine with a game releasing with a bunch of optional dlc.

[Mister_Wolf]

Shhhh Sony fans wont like you reminding them that the main game gave you a small percentage of the story the DLC would complete so they could lure you into buying the dlc. They won’t like you saying things like that about their darling exclusive Spider-Man game.

[porkChop]

They get a cut of all sales on the PS Store. So this includes MTs for games like Fortnite, COD, etc.

[Petebloodyonion]

And what is the multiplayer component for these games?
Now can you explain why UC4 Mp has MTs?
MLB the show?
Tlou multiplayer?
Gran Turismo Sport?

[ChristopherJack]

Well good games are part of the attraction to gamers to join the Sony ecosystem- their own hardware, peripherals & games make up less than 20% of that revenue (& that's putting r&d aside)- once they're in, well then that's when they get the other 80% when people buy vbucks in Fortnite on PSN & buy the PS version of CoD, & so on & so forth.

Their own games specifically target quality rather than direct profits. Sony could make more direct profits from a Candy Crush style game than Uncharted if they wanted to, the issue is the former doesn't excrete quality & depth- when gamers go to recommend the console to their mates, they won't talk about how great the Candy Crush style game is.

Put simply, the pretense of quality is more valuable than quick, cheap & easy money.

[Lord_Eriol]

i dont like MT, but 1 good DLC addon is acceptable if game is already "complete", and DLC add not contain susbastial part of game.
Too much dlc for a full price game is unacceptable, this mean you buy a game not complete

[Kribwalker]

and games like MLB The Show contain fifa ultimate team style MTs that generate big money. Then there’s GTsport, which also has MT’s, then theres money they get from their cut of fortnite and apex style games and their MT’s, it’s really no wonder companies see service based games having a larger impact than SP one and done stories.....

[Christopher]

Which is why Sony puts out way more SP one and done games than MTX games?

[Kribwalker]

@christopher

and all of those single player games sony puts out can’t hold a candle to their biggest money maker. A mobile MT infused game (Fate/Grand Order) that is consistently a top performer, bringing in over $240 million last quarter alone, and So much so, that they are “ Going forward, Ahmad says, the plan is for Sony to explore future growth through “pan entertainment digital contents” like FGO, which can be seen in such moves like Sony’s recent investment in Epic Games and Chinese media platform Bilibili. “
https://gamerant.com/fate-g...

And yes the money from F/G O is counted in the dlc/mt money brought in

https://twitter.com/RocketP...

[Christopher]

@kribwalker: Still doesn't support your idea of a move towards those things, though, does it?

I mean, look at their PS5 announcements. None of them MTX games. Even Godfall, which I thought would be MTX heaven, says no MTX in it.

You're selling this thing of "Sony is also GaaS company" but they still put out more games that are one and done.

You keep trying to sell this thing that isn't happening. Regardless of what Ahmad says, the studios aren't doing that on PS4/PS5. And trying to act like Sony controls what third-parties do? Silly.

[Marquinho]

This shows up how "inconvenient" is hardware for console manufacturers. No wonder why only a few survived this race through the decades. And to imagine things will get much harder when next-gen starts.

It also comes to my attention how much of a gap is there now between digital and retail sales. Global situation must have influenced this.

[SamPao]

you need hardware to even be able to sell something to anyone. So having hardware is the FOUNDATION not "inconvinience" for console manufacturers.

[Marquinho]

That's why I placed it between quotes. It's a "necessary evil" for manufacturers. From a consumer standpoint, new hardware is exciting but looking at those financial numbers, perspective changes.

[rainslacker]

You don't need hardware, but to make this kind of percentage versus your own output, you need to have your own storefront service where you take a cut, or make a game that is driven by the sale of these kinds of purchases....like F2P, or games that have heavy impetus to purchase such things.

[UltraNova]

On the contrary, it shows how convenient it is to sell so much hardware because it enables an increasing number of users to spend money on physical/digital games, MTs, accessories, and services. The more users buy the console the more potential revenue Sony can take in from sales. Sony's traditional platform business model is working wonders for them.

[Marquinho]

You guys aren't getting the point. I know and I'm convinced console sales are the foundation or everything else. This is why I smile at people saying MS will stop making consoles and go all-cloud for example.

What I'm stressing is how little of a profit they get from hardware sales being the end of current generation when parts are at their lowest cost. Considering those numbers will turn red when PS5 arrives (same for XSX) as they will most likely sell at cost (or even at loss) it doesn't come as a surprise why many had to quit the console market.

[SamTheGamer]

Exactly. I feel bad for XBOX. They always went through bad times

[Marquinho]

Why though? They're doing extremely well in software and services and things should improve dramatically in console sales next gen. Exciting times for gamers.

[BehindTheRows]

@Stepamphetamine

In gaming, no, they are not.

[SamPao]

well yeah it just seems silly to call it an inconvinience, its like calling the humanbody an inconvinience because its so fragile. But its the base of everything we are.

[Nacho_Z]

If GTA is included that will be a chunk, the game is a monster in terms of how much it takes in through MTs.

[RazzerRedux]

Exactly. My boss has poured hundreds of dollars into Warface for some ungodly reason. And that's not even a popular game in comparison. GTA and RDR2? Would love to see a pie chart showing the top microtransaction money makers. Would probably make it crystal clear why R* isn't in a hurry to make GTA 6.

[CrimsonWing69]

And that’s why we have ‘em!

[Christopher]

Two months with no major third party releases, during the year with new hardware, and kids home all the time due to COVID is a bad way to analyze this stuff.

I'm not saying MTX isn't a big factor, but this isn't a real accurate view of it's true value compared to software and hardware during normal times.

[Atom666]

Fair points.

Prior two quarters were at about 1.6b over the holidays and then 1.5b for the Jan-March for add-on content. We can call that Fortnite/Warzone/2K money.

All things digital went up during this time. He's reporting on the 1.37b they made for full software sales during this "covid quarter." Holiday quarter was at about 1.2b for full digital games, and the the Jan-March 2020 qtr was at about 900million for comparison. Of course, LoU and GoT helped there.

So it's definitely a spike across the board like we saw from everyone else, but the % distributions between physical, digital, and MTX/DLC are actually fairly consistent.

It's ultimately why these companies aren't going away from MtXs anytime in the future.

[Rocosaurus]

Microtransactions are not going away anytime soon.

[JackBNimble]

Well when publishers want to appease gamers with stagnant prices on games , you end up opening the door for other means of making a profit.
It's to late now ,I'm sure MT's are here to stay.

[RgR]

I think it's obvious by now that MTXs make a ton of money off people.

That said software sales are still a huge portion of that overall revenue. 30% is a big deal. In terms of their exclusives a big factor of their appeal is the lack of BS.

[Kavorklestein]

Retail copies are dying.
These consoles have huge updates to download, tons of DLC and various other things. The disc based DRM is about the only purpose of a Disc these days.
Most PC gamers have been buying mostly digital since Steam got big, and World of Warcraft died.

Digital is the future. As much as having retail copies is a nice thing for collector's and such, Digital is taking over. Undoubtedly.

[Sciurus_vulgaris]

Stay at home measures may have decreased physical game purchases. Digital spending as whole likely benefited from people staying home.

[Kavorklestein]

No, they are dying. Physical sales have been on a decline for years.
I understand This info is talking about during the Pandemic yes, but that doesn't change anything. Physical is dying.

[jznrpg]

Dying no , lessens because of Covid and others not wanting physical sure . But I’ll be physical until the day I die !

[anast]

They are not all Sony Mts and DLC though.

[Pancit_Canton]

With over 100 million PS4 users out there. Sony are besically printing money on their gaming division in general. It doesn't matter which section of their gaming department. Pretty much all are doing a great job.

[aquamala]

Sony making a killing getting 30% on Fortnite/FIFA/2k MTXs

[RamRod88]

Probably helps when F2P games are actual free on ps4

[Petebloodyonion]

Sony make's ton of money from the transactions made on PSN including avatar, theme, and royalties from the other publishers.

[esherwood]

That’s not good. The days of buying a game for a set amount of money are coming to an end and when it does I’m finding a new hobby. I want games to be designed around fun instead of constantly trying to trick me into spending more money.

[Nebaku]

That's never going to happen. The people who get into the the games industry to make games, are just like us, they just want a good game with no extra bs.

There may be a section of the industry that becomes all money grubbing, likely the top AAA game makers. But there will always be alternatives that aren't.

[esherwood]

Yeah I agree as far as still having some indies and stuff but things like the Witcher 3 are numbered. The game takes a massive amount of work and games 1/10 the size probably make more because of mt’s. Cdpr doesnt get enough credit, wish there where more developers like them

[battlegrog]

doesn't very company ? DLC and services are a driving force. I guess if a game is good its proven that it can be free with micro transactions

[ApocalypseShadow]

We would need pre covid numbers to compare this to. These numbers might be accurate but not exactly the full truth. Makes it look like Sony is leading the pack pushing out micro transactions.

[HannibalLecter]

PlayStation is leading the pack on install base alone.
Yes numbers across all consoles are up cause people are home more because of this pandemic.
But also normally the company with the biggest install base would be bringing in the most profits in all these categories.

[ApocalypseShadow]

Which is true. More systems, more potential sales. Something Microsoft could learn from.

But the narrative of Sony's micro transactions are pandemic numbers. What were the numbers for physical and digital before the virus? What were the dlc and micro transaction numbers before the virus?

This is a snapshot without full context. The ratio may still be true when people were moving about. But it would be a fair comparison. And tell us why current numbers are the way they are.

[jznrpg]

If there are people who spend money on 3rd party MTs and DLC (yes Sony has some of that but it’s not prevalent and they aren’t making this much $ from it) and Sony makes profit that’s great for me as I rarely buy DLC or MTs and In the end Sony profiting gets me more first party games that I want that don’t have a focus on MTs and such . I don’t like MTs and some DLC but unfortunately others seem to love them by the amount of money they are spending , but it also benefits me in more games .

[WelkinCole]

I hate it because its a terrible trend but gamers a big chunk of them anyways are saying it is fine by voting with their wallet.

Never bought a MT in my life. My money my choice. Others obviously have made theirs.

[Positivelypositive]

I bought DLC for the Witcher 3 and Final Fantasy XV. That is the entire list. I do own ESO on steam with all the expansions. When I look at DLC this is what I see. "New game content, one new mission and a custom costume for your toon." $19.99!! I see this and go, well I paid 60 for the game so far. That is not 1/3 more game content. It looks meh... I mean The witcher 3. This is DLC. The standard they set for DLC for me is high but its the real value we deserve.

[crxss]

duh. anyone here who didn't know this?

[Artemidorus]

Only going to get worse, already heard of the new ideas and you will be paying in sections for full content.

[Pyrofire95]

Well there's a lot of whale games and Playstation gets 30% of all of it on the platform so I'm not surprised.

[GOULDYBOBS]

Bit cunty that