Playstation Network to earn Sony billions

Sony’s Playstation Network and Playstation Plus subscription have been the backbone of what Sony is offering Playstation 3 and Vita owners, giving customers “free” games, relatively cheap prices for new titles online, and a cloud save feature for game progress.

However, according to research done by IHS Electronics in 2012 the PlayStation online services only earned Sony an estimated US $140 million; a far cry from the $1 billion-plus that Xbox Live was generating for Microsoft during the same period.

Sony’s Playstation 4 changes that because multi-player isn’t free on the new console. Free-to-play titles on the console won’t require a Playstation Plus subscription, but any other title will require you have an active subscription to play online with other PS4 owners. The free multiplayer benefits remain, however, for the Vita and the PS3.

Sony Playstation Plus for PS4

Because of this change, IHS has completed a second research program that estimates by 2017, four years after the PS4 launch, Playstation Plus will earn Sony $1.2 billion in revenue each year, totalling $4.8 billion in the console’s first four years of life.

Microsoft’s Xbox Live service has charged for its services since it launched in 2002 and has made the company approximately $4.7 billion over the past 11 years.

Sony’s decision to put online multiplayer behind a paywall was generally well-received, as the benefits that the Playstation Plus subscription offer more value than its cost. PS Plus gets updated every month with a roster of free games for the PS3 and the Vita and these games are yours to keep and download so long as you continue to pay in your subscription. This system will continue on the PS4.

“IHS believes that lower research and development costs for PlayStation 4 hardware, additional revenue streams from online service subscriptions and a more aggressive transition to higher margin digital content sales are combining to strengthen Sony’s games business outlook even in the face of increased competition from cheap Android consoles and alternative devices eating into consumers’ gaming time, including smartphones and tablets,” suggested the research firm.