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Sony Would Need to Shrink Investment on PS5 AAA Titles If They Release on PS Plus

Sony Would Need to Shrink Investment on PS5 AAA Titles If They Release on PS Plus - News

by William D'Angelo , posted 5 days ago / 1,580 Views

Sony Interactive Entertainment will launch its new PlayStation Plus service in Asia on May 23, in Japan on June 1, in the Americas on June 13, and in Europe on June 22. It will be available in three tiers, however, none of them will provide games on day one.

Sony CFO Hiroki Totoki in the company's fiscal year 2021 investor call said if Sony were to release AAA PlayStation 5 titles on PlayStation Plus they would need to shrink the investment in said games.

"I will refrain from making comments on the competitors’ strategy," said Totoki when asked if Sony were to ever release AAA titles on PlayStation Plus on day one.

Sony Would Need to Shrink Investment on PS5 AAA Titles If They Release on PS Plus

"Our current thinking is to have development costs/appropriate R&D investment for quality products and that will improve the platform and also improve the business in the long run.

"AAA type titles on PS5, if we distribute that on the subscription services we may need to shrink the investment needed for that and that will deteriorate the 1st party title quality and that is our concern.

"So we want to make sure we spend the appropriate development costs to have solid products/titles to be introduced in the right manner."


A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel dedicated to gaming Let's Plays and tutorials. You can contact the author at wdangelo@vgchartz.com or on Twitter @TrunksWD.


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30 Comments
Otter (5 days ago)

It's simply that they make more money this way, they could still continue to invest in AAA the same as they do but would have notably less revenue/profit for a while until their subs grow to a big enough number. MS is only doing what they're doing out of some combo of desperation and ambition. Starting from declining 3rd place there's less to loose, especially when you have pockets as deep as they do.

  • +4
The Fury (5 days ago)

Why wasn't Dr Strange 2 released straight to Disney+?

  • +2

Disney isn't doing that anymore. Too much backlash from that $30 charge on a subscription you're already paying for perhaps? lol most movies now have a 45 day movie theater exclusivity window before going to a streaming service. Dr Strange 2 hasn't had that announcement, but for now we'll have to assume it'll have the same path.

  • -1
method114 (5 days ago)

I'm assuming like last time some people will believe them and others will still think they are lying. This is an investor call though so I think lying would be illegal in this situation.

  • +1

I always accept information provided in investor calls as truth lest the company be susceptible to being sued into oblivion lol.

Sony puts a ton of money into their first-party games development, and it shows. The quality is always through the roof. But, Sony doesn't have Microsoft money, so I understand their viewpoint on the subject. At the same time though, if the new PS+ takes off for Sony and they end up making a ton more money from it, that tone can change in a few years.

  • +4

It’s not like they say anything legally binding. “we may have to do blah blah” isn’t committing to anything.

  • -2

True but then at that point there are really only two possible conclusions neither of which makes much sense. 1. They can make more money from a subscription service but they don't want to make more money. 2. They wouldn't lose any money and would still make the same amount of money but they simply don't want to provide the service to their users for some strange reason even though no money will be lost.

  • +1
Brimac19 (4 days ago)

They just set records for 1st party studio game sells. Why would they throw money away??? Stupid to put any AAA game day & date on a subscription service unless you have zero confidence in your games!!!

  • 0
Qwark (5 days ago)

Seems reasonable enough, for a subscription service you should focus on more quantity and smaller games to attract and keep as many subscribers as possible with sometimes a really big budget game to boost your subscribers and keep people really interested

  • 0
EpicRandy Qwark (4 days ago)

Yep seems reasonable, if you want your service to fail that is... Flagship titles are the reasons people buy subscriptions service (well it is in my case) smaller titles are only useful in-between. Certainly would not pay for a service providing only smaller titles. My steam library is already full of those and Epic store literally give those away on a weekly basis.

  • +4
LivncA_Dis3 (4 days ago)

Yeah that's what happened with halo they became complacent and lazy,

Releasing one part of the cake time after time instead of just release it all together,

Yes they released multiplayer then campaign but they missing so many other things,

Devs gets so lazy if ur triple AAA game is free dayone ish

  • -1
smroadkill15 (4 days ago)

No reason to change something that doesn't need to be changed. Not all of them have MS money.

  • -1
Azzanation (4 days ago)

While their direct competitor pushing these services are making record profits in their gaming division.. something doesn't add up.

  • -2

That's great for MS, naturally. But their record sales are for them only, and typically PS pulls in more on average.

If MS started pulling in higher profits, then there may be an argument to be made, but it still disregards the deep pockets they have to leverage the service.

  • +1
Azzanation twintail (4 days ago)

Deep pockets has nothing to do with profiting. Deep pockets help create the innovation and push ideas forward however month to month profits are different. If the Xbox devision can make great profits on a monthly basis on the back of carrying GamePass than it can happen to PS.
This falls under how much more money they want to make short term with less risk compared to more profits long term with higher risks.

Sonys big issue with this direction is they heavily lack games with staying power (MP and Online games) this is why Sony is starting to invest heavily in Companies like Bungie and Online games to keep there services alive. Currently they cant do what GP does exactly until they fill those voids.

  • -2

No, I think the angle you're pushing is incorrect for 2 reasons:
1) Even if GP is profiting now, it has taken many years to get to this point: MS having the cash to back it up has what allowed the service to get where it is now. Concluding that Sony could turn PS+, one of the the largest source of their profit (and which is cheaper than GP), into a loss leader for a how many years, with very little to back it up, makes little sense.

2) In terms of revenue and profit, the XBOX and PS divisions are not even at the same position currently to make a 1:1 comparison. Yes, Xbox might be seeing records, but those don't apply to Sony. The PS division has been attracting higher revenue/ profit than Xbox's current successes every quarter for the last few years. If anything, that proves that Sony's decision is actually the more profitable one, not vice versa.

  • +2
Azzanation twintail (4 days ago)

Not saying that Live and PSN are on the same level, however they have to forecast the future as times will change and to stay ontop they need to be ahead of the curb.

Sony are only now building towards it with alot of their changes. They are investing, however due to the lack of 1st party Online/MP games, it will take time. Services like GP require a good blend of everything and its the MP games that will get gamers to stick longer. SP games alone wont keep gamers subscribed since most SP games can be finish in a day or a week.

Sonys methods is considered even by David Jaffe as the Dinosaur method. It works however its incredibly outdated and not as reliable in the future. These services are still growing, like digital, it takes time however once majority switch, the industry default standards changed.

Also Sony is far from a poor company, it doesn't take a Trillion dollars to implement the systems in place. Sony can easily afford it however they have to change their structure for it to work. Like getting onboard the MP games etc which they are.

  • -6

David Jaffe is not an authority on... anything.

If Sony believed that their tentpoles games wouldn't suffer, of course they'd jump onto the GP bandwagon. They know their business, and they would've crunched the numbers.

MS also obscures a lot of info related to GP whenever they present their financials, whereas Sony are pretty open about this information. And considering how well their business has been since 2013, I think they know exactly what trends will work for them going forward.

  • +2
Azzanation twintail (4 days ago)

Thats how it looks to outsiders. Some companies like Sony wait for others to pave the way before dropping billions. Some companies wait, some companies want to squeeze every bit of juice out before changing etc. However as we have proof GP isnt hurting the Xbox brand and saying its not sustainsble while megaton games like Starfield launch day one tells the story.

  • -2

GP isn't hurting the XB division because MS isn't giving us financial numbers to examine. The fact that MS can prop up the service financially plays a big role too.

The fact that games like Starfield can launch day 1 is a prime example of MS's giant wealth allowing GP to survive as a loss leader until it's financially stable.

  • +2
Azzanation twintail (3 days ago)

MS wont allow a service to bleed money without the protential to make money. They arent the wealthiest company in the world by building ideas to lose on.

  • -2

Exactly right. GP will become a profitable and sustainable business eventually from its loss leader position.

MS has the money to sustain it till that point. Their $68B acquisition of ActiBlizz proves they have the funds.

Sony, on the other, do not.

  • +2
Azzanation twintail (3 days ago)

I garentee you, once Sony gets their online and MP games going, you will see Sony offer a service very similar to GP and it wont take a trillion dollars in revenue to provide it. And their 1st party quality wont be affected.

  • -2
Machiavellian (5 days ago)

I am going to call this PR BS. Its not like Sony will stop selling at retail so they will still get paid. What they are really saying is that they want all the money from retail first at 70 bones then when the game has finished its retail run are they willing to put it on their service. Its more a money decision as they are not concerned to make their service a priority. Nothing wrong with that but its pretty much on the same level as their rumble statements before they did a about face. I believe if MS and GP start to do some serious dent into Sony market share, we would see Sony also make a different decision but right now, there really is no need. They have the marketshare and install base so the benefits are way to long for the immediate future.

  • -7

Big difference is that MS has the money to support GP in its current state as a loss leader. Therefore, they can continue to support the budgets their games need.

Sony are nowhere near financially secure to maintain the budgets for their games to support a service like GP.

If it financially made sense for Sony to pursue the GP model, they would've done it already. But they have the numbers and the data, and have determined that it's not feasible for them to do right now.

  • +4
Jumpinbeans twintail (4 days ago)

If Sony says its financially not possible to do it then I'm pretty sure MSFT will be forced to provide the financial details for the Gamepass service in the near future. Predatory pricing is illegal so they will have to ensure they are not running this as a loss (subsidised by other parts of the business) to take market share from Sony/Nintendo etc.

  • +2

Sony said it isn't possible for them to pursue it, not that others can't.

  • +3
drkohler Jumpinbeans (3 days ago)

You pretty much summed up MS' XBox Group since day one. There have always been myriads of ways to subsidize XBOx with some construction so you don't fall into the predatory minefiled trap. Just look back at what usually wasdivision- bundled with the XBox group.

  • 0

I disagree that Sony would pursue the GP model based financially. Not all companies see the future like others. Most companies do not make moves until others pave the way that is why the ones who can jump on something first and execute gets the rewards. A lot of companies do not adapt to changes in market until the competition or new competition comes in and up end everything. I am not saying that GP is that type of service but that MS evidently made a commitment that this is where the industry is going so they are putting everything behind it. Sony has a different opinion. We will see years later who had the better long term vision.

In my opinion, I believe that Sony could reach 150 million subs for their service way faster than MS and having 150 million recurring subs a month would finance any project they want with the amount of quality they want. Its more a matter if Sony wants to go full service mode or not and right now they do not.

  • +3

Of course it's a money decision he clearly states that in the call. I own a gaming PC with gamepass and a PS5. I can say without a doubt that so far this gen Sony has put out better and higher quality games. Is that because of GP or not? I don't know because Sony also did that last gen and xbox didn't even ahve GP then. It will be a while before we see how something like GP affects a games budget.

  • 0