PlayStation Plus and the implications for the next gen

[moosegrinder]

Hello! I looked for a thread specifically discussing this but could only find stuff in previous threads, so if this is surplus to requirements I apologise.

On Twitter Leon, Jay and a couple of others were discussing PS+ and how MS are losing ground in respect that their online service gives you 'less' for your £40 a year, whereas PS+ gives you what is essentially an extra library of games. The offers and 'Gold Member Only' stuff that MS offer is pretty laughable when you compare it to getting Borderlands for free (as long as you maintain your subs, obv).
Personally I don't subscribe to PS+ for a few reasons, but the main one being I simply don't have time to play more games, even if they are free. Chances are I bought them when they came out and if I didn't I'd feel obliged to play them instead of something I've got on the Tower of Shame.

The other reasons are generally based around being institutionalized towards Xbox Live, having all the people I play games with on there, and other issues I have with the PS3 which are irrelevant to this discussion but also the major thing of not wanting to fork out £80 a year on 2 services. Anyway, the point of starting this thread aside from wanting to ramble on like a dribbling idiot before 8am on a Wednesday morning is this: What happens next?
Microsoft aren't going to answer PS+ this generation. They don't need to. They have enough of an installed base to keep Gold subs up and running as long as they have millions of people playing CoD, Halo and Battlefield et al but what about the next generation? Online integration is only going to become more important so are MS going to answer PS+ with giving free stuff away? Are Sony even going to continue giving free games away with their PS+ subscription? There's arguments you could make for Sony to start charging for online play like MS already do.

I just thought it'd be interesting to see what other people thought about where these companies go next, hopefully without any fanboy ravings and spewings because you lot seem lovely and capable of rational, balanced conversation.

[JaySevenZero]

My thoughts are that if Microsoft really wish to compete seriously with the other forces in the gaming market over the coming generation, then they have to open up their service. They got away with charging for online multi-player because they could, as they initially offered a service that was second to none. That is not quite the case anymore and with online gaming being offered for free by all of its competitors (PC, WiiU and PlayStation) they are gonna have to offer something very special to keep people interested in paying for it and not a service where gaming appears to be pushed ever further from the forefront and includes the inundation of superfluous and annoying (to some more than others) advertising within its paid for premium service.

As for Sony I don't believe they will charge for their online service as they have knowingly used the "free online" element in marketing the PS3, understanding that it gives them a possible advantage - especially in these economically trying times - instead they have chosen the route of "extras" such as PS+. Although I wouldn't be surprised though if they add things such as group chat etc. to the list of things that could be included within the Plus subscription for the next generation (hardware permitting) but I don't believe they will charge for the basic access to online play. The Plus service hasn't just been about free games though, they also get quite decent discounts to both DLC and downloadable games, which don't require permanent subscription and exclusive early access to stuff too which when combined with the free games too, give it a fairly reasonable advantage over a Gold sub.

[magicjoef]

I do think Microsoft need to have a rethink, as the dashboard is complete mess and paying for multiplayer has always felt a bit wrong to me. I pretty much had to, as the reason I got a 360 was that was the system a lot of my friends had, and at the time there was the small consolation that they did have the best online service (apart from the free and flexible PC!). Now they just feel a bit outdated and need to up the value of their service, it does feel like spending money to be advertised at!

I think next-gen they will probably tidy things up, and probably offer something more inline with Playstation +, but I wouldn't bank on them getting it right straight away. I think it also depends on when the systems launch. If the next Xbox is out before PS4, they might think they can get away with retaining people on Gold and still include online play as a premium feature. However, if they are out second, or pretty much at the same time, it could be interesting hearing them try to justify it to customers.

One thing to consider, a lot of PC multiplayer is based on connecting direclty to others, or having people host a server that they control and let other people play on. I know there was some hoohah when BF3 let private servers on the console, so should we think about who pays for the bandwidth in online games, and how the infrastructure is set up?

[magicjoef]

Oh, one thing I forgot...giving away free games on a service like PS+, even if they are a bit older, is great as everyone has access to them. I think that's a big deal for enabling people to get together and play. I love the idea that everyone can just jump in without having to track a game down or weigh up if they want to spend their money on a title they might not be sure about.

[JaySevenZero]

One thing to consider, a lot of PC multiplayer is based on connecting direclty to others, or having people host a server that they control and let other people play on. I know there was some hoohah when BF3 let private servers on the console, so should we think about who pays for the bandwidth in online games, and how the infrastructure is set up?

I think that's a separate issue for another thread as different games support different set-ups, Halo for example is peer-to-peer whilst Battlefield uses dedicated servers which cuts across both consoles irrespective of their own services.

One thing Microsoft should definitely address is the barring of content that requires a separate subscription. I have a Lovefilm account that I pay a monthly sub for which allows me to stream movies. I use this for no extra charge on the PlayStation but Xbox demands I have a Gold account sub in order to access this feature, a decision that only serves to push me towards the PS3 for extra services such as these. The same, I believe, applies for Netflix too.

[delb2k]

Microsoft will only budge if the migration of users and gold payers on the new system does not match or closely resemble a curve they will have charted internally. The reason I believe this is that communities of friends who have played on 360 together will be banked on to transition to the new console together so they can keep on playing together.

So the cycle would start again, and friends get live so they can play against friends and compare the gamerscore and all that jazz. For a lot of us on this forum it may come down to feature sets and what the different companies do with the offerings but for the man on the street that just wants to play FIFA online with his mates in the online league will just plump for it regardless.

The only benefit for me currently to get plus is the digital library, but it is just too much stuff for me to play with my current backlog. Discounts are nice but I just wait until the seemingly endless sales pop up.

Which means to answer the question, after a long winded post, MS should change but probably wont unless the numbers do not go in the direction they want them to. Mainly because consumers, I suspect, will just pay and get on with it while we as enthusiasts debate it.

[JaySevenZero]

I think it's dangerous for any company to assume that their consumer base will take up whatever they offer, this was Sony's approach in 2006 and they have suffered for it, losing ground to Microsoft in regards to sales and footing (and this was without any subscription service). There's also a media angle to this too with plenty of big gaming sites showing disdain for the current XBL experience, these still have plenty of pull in colouring consumer choice.

The landscape is ever-evolving and competition is increasing, with the likes of Valve beginning to show signs of encroaching onto console territory with Big Picture. I'm very curious to see what happens over the next couple of years.

[delb2k]

Very true. I guess the thing is they can start to open it up and present that as added value without really doing too much.

I am not too sure about the media angle, there is a lot of dislike for the new dashboard but most of what I read and listen to these days seems to say that the price can be found for so cheap these days that its not really that big a deal as long as the eyes are kept open.

I guess I just cant see why they would change unless the subs numbers begin to drastically dwindle, and I am not too sure that they will. With everything moving to a more standard PC architecture the feature set between the systems in terms of online attributes should be much of a muchness soon which makes everything harder to justify but who knows, Sony are equally as likely to stuff it up as MS are in my mind these days.

[magicjoef]

I think that's a separate issue for another thread as different games support different set-ups, Halo for example is peer-to-peer whilst Battlefield uses dedicated servers which cuts across both consoles irrespective of their own services.

But doesn't that have an impact on what Microsoft are actually charging for with Gold? I presumed part of the cost for Gold is to contribute to Microsoft server maintenence/bandwidth costs etc. If they aren't even doing that then putting multiplayer behind a fee is criminal, isn't it?

[NokkonWud]

I don't think it's a case of two £40 services. I've not paid more than £26 for Live over the last 4-5 years and PS+ is £30 at the moment.

Next generation is interesting. Playstation Plus came about around 3.5 years after launch and established itself about 4 years after launch. That's a lot of a back catalogue to 'give away', but what happens from day 0 on a new console? They're not going to be giving away new PS4 retail games.

That said, I want to feel I am getting more from my Gold subscription, something like dashboard configuration, no adverts and worthwhile offers (and freebies!) for Sony I think they have it right now but I want Party chat. But again, curious as to what they'll offer 'free' games wise next gen from systems launch.

[Xantiriad]

Firstly a quick couple of things to clear-up: the XBL service does not provide gaming servers - most games are peer to peer, and those that do have dedicated servers are provided by the game publisher. What XBL does provide is the TruSkill system and integrated online features (player matching, invites, online connection protocols, messaging, etc) which uses little bandwidth but does require infrastructure. The only thing on XBL that MS provide those does use huge capacity and bandwidth is the marketplace...which everyone pays for when they buy stuff anyway. So your £40 sub is really paying MS back for the investment they made in building the XBL platform and API in the first place. Therefore, there is a point at which MS recouped that money and moved into making a profit on the platform. Depending on your POV that was in 2009, when they broke even, or 2012 when the total XBL profits exceeded all the development and original XB costs.

As for next gen, I think you can look at the evidence of what all three companies have been doing in the past 2 years and draw a straight line.

Nintendo are out of the traps first, and are trying to establish themselves once again as the unique offering. They don't want consumers to consider a Wii-U and a PS4 but to consider buying BOTH. This is the strategy they have used for the past 6 years, and it has paid off handsomely for them. It feeds into their pricing, console design and even their post-launch laissez faire attitude to third parties. To quote Daniel Floyd, Nintendo strive for "brand relevance" rather than "brand preference". They won't be charging for online services, but will instead use premium pricing on their online products.

I firmly believe Sony will be the first to release a new console. The development is likely to have been underway for a few years, so you can look at the Vita for hints as to what to expect. Vita uses a lot of licensed technology and off-the-shelf parts: I fully expect the next console to be much the same, potentially using a x86 or PowerPC architecture. The Vita is very much designed as an always online console, with social networking (which is what NEAR is although very shit), chat, trophies, and messaging built into the OS. There is no cost for this, nor will there ever be considering no other platform charges for these services - you make money on the services you hook into it. I don't think Sony will go the paywall route with new chat features, but will build on the success they have had with PS+ this year. So PS+ will continue to be a premium service, likely offering discounted and free older games initially. Again Vita shows us the way in that PS+ discounts have been heavily applied to PSP games since launch. PS+ could eventually become a full subscription library: in that you pay monthly and have access to any games in the library. I think Sony are a few years off this though.

And then we come to the 400lb gorilla. I won't rant any more about that bloody dashboard, but it is an indication of the platform holders direction and motivations. Microsoft at are a funny place in their existence. They are struggling to remain relevant in what was their core and dominant market position: Windows and Office are no longer monopolies and the once strong relationship with OEMs and business customers is at a new low. Java took a massive chunk out of their Visual Studio business, Office has been devalued by Google and Open Office (plus 1000s of apps), Windows and PC sales have been dramatically affected by Tablets and smart phones (netbook sales are just 20% of what they were at their peak!), business customers are still happy to run Windows 2000 and XP, and Zune was a financial disaster. So they are reliant on the entertainment division to keep the figures looking good. For this reason you are not going to see the £40 XBL fee going anywhere, even with the next generation. They will continue to put more and more content behind the paywall to "add value", as they need that money, just like they need the ad/marketing revenue from the dashboard. The Xbox is being used more & more as a marketing tool for MS. The "Windows 8" style dashboard was more than a cosmetic change; it was to promote how wonderful Win 8 will be (not saying it won't - I like what they are doing) and get everyone used to the look.

If I was a betting man, I'd have MS coming out with a console last, and with something more akin to an "Xbox 590". An incremental improvement on the current model with the ability for consumers to buy "upgrades" for it in the future. It will be more like an upgradable Apple TV with basic services, and likely sold in different SKUs with more capacity and power. This seems to be route they want to take (and leaked), and is no doubt driven by the good after sales they had with proprietary hard drives and Wifi adaptors. It is also a clever strategy in terms of risk, as they can look to licensed OEMs to manufacture these parts, or even the console, in the future if they wish.

So there you have it: MS to keep the paywall with more stuff behind it, Sony to keep the PS+ with freebies, discounts & possibly a subscription library, and Nintendo to be completely free but charge more for marketplace stuff.

[ratsoalbion]

Brilliant insight & analysis, Gary. I'm looking forward to seeing how accurate your predictions are.

[magicjoef]

Yeah, quality post Xan, and thanks for the breakdown of what MS actually do on the network end.

I think Playstation would love to get out there first, having been stung last time with the 360. I just wonder how hard they are backing the ten year cycle thing? I think Microsoft have to be at the next E3 with their new console, announcing it ready for Christmas. Their lower capacity discs, and slightly older hardware in the box means there can't be much ground they can break over the next year. Most of the stuff I saw at E3 this year felt like it wouldn't run well on the current Xbox. I can't see them wanting to fragment the market on a technology basis though. Having a situation where some games will only run on some systems is something they would be desparate to avoid.

I fear you're right about the paywall staying there for MS, and I'm not sure I can justify paying for it in the next gen, especially if nobody else is. I don't feel Gold gives me anything other than multiplayer, and I don't think they'll justify their cost to me.

[countstex]

Good posting all. I'm really confused as to what is going to happen in the near future with the consoles, I'm starting to think I will be holding off on purchasing any of them until we know exactly what they are about and what you do and don't get. I came into the current generation late so I can't see it being too much of an issue. I've found myself playing more and more on the PC again over the last 12 months, not so much because the the graphics and performance are so much greater (ignoring lazy ports) but because I know where I stand with them, and it's a system i'm in control of more than the providers. Though MS look set to try and change that with Win8, which is probably why it will fail completely.

The most interesting thing for me has been all the noise Valve have been making about Linux. Now I can't see everyone jumping to Linux from Windows no matter who tells them the performance can potentially be better, but with the additional stuff Valve has had leak, about hardware and so on I can't help but wonder if they are contemplating building a 'new' OS of their own somehow, clearly based on Linux in the same way Android is, but specifically for gaming. Probably well off the mark, but I like to speculate wildly

[delb2k]

Reading Xan's very well written post there were one or two things that I am not too sure about, mainly regarding the MS statements to be honest.

To say that Microsoft are struggling to stay relevant would indicate that there earnings from those sectors should be taking a trajectory downwards and harming there overall income ability due to migration to other platforms. The truth is that this is not the case, the latest reports showing consistency across all of its business sectors from last quarter. The odd bit is that the one of the worst performing section of the business was the entertainment division in terms of revenue. So far from using that to keep the figures looking good it is a weak part of the group. Info here:

http://techcrunch.com/2012/07/19/micros ... b-revenue/

Looking back over the last few earnings results the company have managed to show relative stability as well. Now I am not saying that they do not face a squeeze right now, more devices, online options and competition has harmed them that is for sure. But I can say, working in a support capacity for my company currently, we hate our 2000 boxes. They have been out of support for 2 years now meaning any issues with them and we are stuffed with 2003 slowly going that way too. I would honestly be surprised if that many companies are comfortable having 2000 tin as a production base.

Xan is right though, the home market is nowhere near as strong as before and is hurting them. That may change in the future but for right now it is not great for them. Will be intrigued if the idea of expanding the manufacturers pans out, they like to keep things so tightly controlled it would definitely surprise me. But then never say never.

[Xantiriad]

The problem for MS is that large companies replace their 2000 tin with Linux servers.

I work in s/w development for one of the UKs largest financial companies. The term "Sweat the asset" is applied. We still use Office 2003!

MS's businesses are in stagnation which is always a risk in IT. They need to be building revenue for 5 years time and its here that they are in trouble.

The consumer market has the potential to be huge for them, as demonstrated by the huge growth shown by Google, Facebook, Apple and Amazon. That's the rainbow they hope to chase with Windows 8 being the magic carpet to do it.

[delb2k]

I guess thats the interesting thing, in a financial company as well and we are looking at removing all our linux assests at this point.

I guess it is swings and roundabouts, different companies move at the pace they need to. Our office suite is at 2007 currently for example but some may have it at 2003, others use open office etc. i could never say i know what anyone else is doing on a trend basis but from a numbers perspective they still manage to do pretty well for themselves do MS.

[Xantiriad]

As I said in the OP if you look at what MS have been talking about in the past 2 years for Xbox and for them as a company it is all consumer lead electronics, software and services. Hence, my feeling that NextBox will be a media device that can play games and not a games machine per se.

Did you guys ever read the leaked MS strategic presentation which was eventually confirmed. It detailed a strategy which involved future modular hardware focused as a media device controlled with Kinect and Tablets - the doc was written 18 months before the announcements of Surface and SmartGlass. I'm pretty sure that they are still going in that direction.