Pachter: PlayStation Plus Needed for PSN Profits
Ever since the launch of Sony’s premium free online gaming and digital media service, the PlayStation Network always sets out the bring PS3 users the best content available. To step it up a notch Sony introduced the PlayStation Network Plus, a enhanced version of the PSN for which users paid a monthly or annual fee for some exclusive features and content. It now looks like Sony could procure profit from the PSN+, however they will require roughly 2-3 million subscribers, claims Wedbush Morgan analyst Michael Pachter.
Pachter recently released a video on his GameTrailers show, Pach Attack answering some fan questions regarding the PSN+ and whether it will turn in the cash cow to Sony. When questioned by one of the viewers “Do you think the PlayStation Plus is going to be profitable?”, Pachter replied:
“PlayStation Network is free, PlayStation Plus is a charge for a service and it is essentially the same service. Sony is already spending the money on PlayStation Network, so layering on a new group of users paying it for a service will be profitable”
He then continued about the amount of time it will take PlayStation Plus to become profitable like the Xbox Live service. Pachter expressed that Xbox Live only went profitable after the introduction of other services such as Netflix.
“PlayStation Plus will take a while to get up to the same level as Xbox Live and I think you will see around 1 million subscribers early on, which amounts to around $50 million in profit.”
Pachter carried on to say that the PlayStation Network as a whole will not become profitable as he assumes it costs Sony any where around 100 million a year to maintain, and the best they could hope for is that PlayStation Plus will actuate consumers to download more movies and games, thereupon bringing in more capital.
His final comment was his assumption on how many subscribers it will take to make PSN+ beneficial :
“I think for Sony to make a profit on the PlayStation Network, it will need at least 2-3 million PlayStation Plus subscribers within the next two years.”
Do you think Sony will profit? Let your thoughts be heard in the comment section below.