Publishers Unhappy With PSN Bandwidth Fees

[Isildur´s Heir]

This is not to start a flamewar or anything like that, but, rather to shed some light on why the 360 is getting all DLC exclusive (GTA, Fallout 3 and Tomb Raider).
Ok, for all we know, GTA episodes were paid for the exclusivity, but, about the other games, why would the developers only release it on the 360 when the games were on the PS3 too?
It might be because of this...

From Kotaku:

According to MTV Multiplayer, the PlayStation Network Bandwidth Fee Sony charges for content downloads could have publishers thinking twice about what downloadable content they offer on the PlayStation 3.
The PlayStation Network Bandwidth Fee, instituted on October 1st of last year, charges game publishers 16 cents per gigabyte of free and paid content download via the PlayStation Network, which presumably helps Sony cover the cost of the bandwidth. The fee only covers the first 60 days of downloads for free content, while paid content accrues fees until the content is removed from the service.
While 16 cents may not sound like much, as MTV Multiplayer points out, a one gigabyte demo downloaded one million times equals an additional $160,000 a publisher has to pay Sony, on top of licensing fees to get their games on the PlayStation 3 in the first place. Needless to say, publishers aren't too happy about the fee.

"It definitely makes us think about how we view the distribution of content related to our games when it is free for us to do it on the web, on Xbox Live, or any other way - including broadcast - than on Sony's platform," one publishing source said. "It's a new thing we have to budget. It's not cool. It sucks."

The whole story has been uncovered by the folks over at MTV Multiplayer, whose request for comment from Sony on the policy were declined, garnering only an assurance from Sony Computer Entertainment America spokesman Patrick Seybold that the quality of content on the PlayStation Network wouldn't be affected.

"Of course we work closely with (publishers) to bring their amazing content to our growing audience, and we are focused on ensuring we, and our publishing partners, have a viable platform for digital distribution. We foresee no change in the high quality or quantity of demos and games available on PSN."

So is this the cost of the PlayStation 3 maintaining free online as opposed to the Xbox 360's subscription fees, or a result of Sony's overall financial problems? As of right now there's no way to tell. All we can do, as MTV Multiplayer suggests, is keep an eye on what DLC shows up on the PlayStation Network, and hope publishers don't start holding things back in response to the unpopular new policy.

 

[Erzengel]

Another article from G4

It's going to be one of those days where every story seems like a it's a bad day for Sony... According to MTV Multiplayer, Sony is now charging publishers 16 cents per 1GB of content served as DLC on the PlayStation Network as of October 1, 2008.

That is major. I cannot stress enough how this could effect the amount of content available on the PlayStation 3. I don't know for sure why Sony is doing this, but I can make an educated guess: the PlayStation Network is free for users.

Bandwidth is NOT cheap. YouTube pulled in $500 million in revenue last year and didn't make a profit. Of course, YouTube has higher traffic than 99.9% of websites and services out there, but the rule of expensive bandwidth holds. Why do you think so many ISPs are beginning to throttle downloads and charge for overuse?

You might be saying, "16 cents is pretty cheap. What's the big deal?" Well, let's do some math:

1GB Game Demo downloaded 1 million times = .16 * 1 million = $160,000 to the publisher.​

I think DLC packs will mostly be safe because they are paid, but we might see a price increase to account for bandwidth costs to the publisher. Free content like demos, however, will most likely slow down. Now, take a look at multiplatform games and a publisher's hypothetical thought process:

I can put my demo up on the Xbox 360 for free, but putting it up on for the PS3 will cost me money. In fact, the better my game is and the more people that download it, the more I'll have to pony up to Sony.​

It's not a big leap at that point for a publisher to forgo a PS3 demo. "You get what you pay for..." I've said time and time again: I willingly pay for Xbox Live and deem it a valuable expense. I prefer Xbox Live to PSN for almost everything and I hope Sony finds a way to avoid hurting publishers.

Sony's company line, made in an email to MTV Multiplayer, is:

“Appreciate the opportunity to jump in here, but we respect the confidentiality of our business agreements with our publishing partners. Of course we work closely with them to bring their amazing content to our growing audience, and we are focused on ensuring we, and our publishing partners, have a viable platform for digital distribution. We foresee no change in the high quality or quantity of demos and games available on PSN.”
​

I foresee a change. A big, big change.

 

[StrainedEyes]

They have to get their money from somewhere, I guess. It's dumb, though. Of course something like this would limit what developers do for the system.

 

[Tron Bonne]

I guess you can look at this as a cool move for consumers who don't want to pay for online service, but in the end I think this will, as predicted, bite Sony in the ass.

 

[hippie_hunter]

This is not to start a flamewar or anything like that, but, rather to shed some light on why the 360 is getting all DLC exclusive (GTA, Fallout 3 and Tomb Raider).
Ok, for all we know, GTA episodes were paid for the exclusivity, but, about the other games, why would the developers only release it on the 360 when the games were on the PS3 too?

Actually all three of those were because Microsoft paid for exclusivity.

The rest is ******** though. Sony should really get rid of those fees when Microsoft is doing it for free. It would probably help them out a lot with online content in general.

 

[StrainedEyes]

The rest is ******** though. Sony should really get rid of those fees when Microsoft is doing it for free. It would probably help them out a lot with online content in general.

They have to do fees and micro-transactions to make up for the free online service. Microsoft can do it for free because of the 50 bucks they get from every player each year. It's the drawback, and time will tell if it is worth it.

 

[Tron Bonne]

They have to do fees and micro-transactions to make up for the free online service. Microsoft can do it for free because of the 50 bucks they get from every player each year. It's the drawback, and time will tell if it is worth it.

I just wonder if the developers/publishers will wait to see if it's worth it

 

[Master Chief]

It's kind of like having free health care but complaining about taxes.

 

[StrainedEyes]

It's kind of like having free health care but complaining about taxes.

Not really. Developers can get free healthcare at either company, but only one needs them to pay taxes.

Strictly from a developer standpoint, I would go with the company that isn't trying to take money out of my pocket for something consumers can get for free.

 

[ChrisBaleBatman]

I dunno, I kinda understand that they might want to pull in some cash for the PSN.

But, they just need to do a better marketing job, I think. I personally didn't know that PSN was free until I actually did the research into purchasing a PS3. I think the PS3 has some fantastic selling points with having an internet browser for free AND online gaming for free.

Now, yeah...Xbox Live is probably better and set up alot better, but I think it's a good selling point to advertise like hell that online play is free on PS3.

 

[Havok83]

I really dont see this as much of a big deal. I can understand it for demos, bc those are free and publishers dont get direct revenue for posting them up but for episodic content and expansion packs, 16 cents is a VERY small number. Most of that type of stuff is sold for at least $10 and that can range up to $20. Sony gets a cut of the sales as do the publishers. For arguments sake, lets say its a 50/50 split. For a $10 DLC, if the publisher is losing 16 cents per sale (assuming whats being offered is even 1gb), they are still getting $5. Thats a net gain of $4.84. For this reason, I dont think a bandwith fee is the reason why publishers wouldnt put up DLC on the PS3. It's not like they are losing money as they charge way more to get it to us than Sony charges for them to have it up there. With that said, I wonder why then would some publishers offer free DLC. For example, Epic just did so with Unreal Tournament 3's Titan Pack which they arent even going to put on the 360

Ok, for all we know, GTA episodes were paid for the exclusivity, but, about the other games, why would the developers only release it on the 360 when the games were on the PS3 too?
It might be because of this...

The article said that the fee has only been in effect since Oct. That doesnt account for why publishers havent always released the same amount of demos/DLC to the PS3 as they did with the 360 within the 2 years prior

 

[kingman]

I have one word to sum it all up: Advertising.

Placing a demo on the PSN Store or XBOX Live is advertising the game. It was brought up earlier on another forum and I said the same thing (the following was my response to another post on that forum):

Using the example of Resident Evil 5 and the 1 million people we're talking the $160k for the marketing aspect of it. OK so we have 1 million potential customers playing our game to see if they like it.

Now lets say that half of those people decide that they're going to buy the game based upon the demo. I'm going to work with US figures since that's what the amounts are presented in throughout the thread.

A typical game in the US costs $60. If 500,000 people decide to buy it you're talking a total of $30m. Given Capcoms claims of shipping 4 million copies (I know it's not sales) and again working with the typical US figures they're talking about a potential $240,000,000. All of a sudden their $160k doesn't seem so bad or as you've pointed out, peanuts.

If the publishers have faith in their games then they would want to advertise it through every medium in hopes of generating sales. The fact that they don't again shows that money is all they care about, not the gamers. However, some people will refuse to buy a game until a demo is available and they really need to weigh up the positives and the negatives.

 

[Isildur´s Heir]

Kingman....

The point is not taking everything into the 360 and none to the PS3, the point is having developers having to think twice about what to bring on the PS3 and what not.
And like the article in Kotaku points out, the fee they pay only covers the first 60 days, after that, they continue to pay until the content is removed.
What will developers do, put DLC for a time limit on the PS3?
For the consumer is great not having to pay for online, but for the developer is not, it sucks.
And when you have two consoles on the market, one that you put things for free, and the other you to pay for, guess who the developers will choose?

 

[Havok83]

Kingman....

The point is not taking everything into the 360 and none to the PS3, the point is having developers having to think twice about what to bring on the PS3 and what not.
And like the article in Kotaku points out, the fee they pay only covers the first 60 days, after that, they continue to pay until the content is removed.
What will developers do, put DLC for a time limit on the PS3?
For the consumer is great not having to pay for online, but for the developer is not, it sucks.
And when you have two consoles on the market, one that you put things for free, and the other you to pay for, guess who the developers will choose?

both bc as stated before the 16 cents is such a small number compared to how much the games/DLC are sold for. Not putting games on the PS3 based on that results in losing alot of potential money. Yeah 16 cents per gig is saved but then they lose the 5 or more dollars they would have gotten for it

 

[Timstuff]

And like the article in Kotaku points out, the fee they pay only covers the first 60 days, after that, they continue to pay until the content is removed.

Um... That's not exactly what the article said, and that wording doesn't really make any sense. I'm pretty sure they were saying that for free content, the publisher has to pay Sony's fees for the first 60 days, and after that Sony drops the fee, while with paid content Sony collects the fees until it is removed from the service. Makes sense to me, considering that the time when a demo first comes out is usually when it causes the most server traffic for Sony, and after those first 60 days the operational cost for keeping a demo on the server is fairly minuscule.

 

[KALEL114]

Sony to match dev budgets in return for exclusivity

Sony has kicked off a scheme today which will see it match the development budget of self-published games in return for PlayStation exclusivity.

The first game to take advantage of this deal is Doublesix's Burn Zombie Burn, which goes live via the PlayStation Network today, with Sony indicating it's "looking for a great many more titles" to take advantage of the fund.

"It's all very well for us as platform holders to say 'put all your money into PlayStation Network, it's a fantastic idea', but are we prepared to put or money where our mouth is? The answer is yes," Chris Eden, Sony's development relations manager, told an audience at the Game Developers Conference today.

"We're looking for a number of great games, and in return for exclusivity we'll match your development budget with guaranteed royalties," he said.

The scheme, called the Pub Fund, is a realisation of comments made to GamesIndustry.biz last year by Sony's David Reeves, who said that while exclusive deals with publishers is probably a thing of the past, there's scope for such a relationship with the development community.

Eden added that Sony is not buying titles directly from developers, and IP rights and control of any games will remain in the hands of the teams that create them.

"A really important thing to point out is that this is not first-party publishing, this is not Sony buying your product," he said.

"You'll be the publisher, you'll own the IP and you'll control your product. This is assisting you to make your next step from developer to publisher."

http://www.gamesindustry.biz/articles/sony-to-match-dev-budgets-in-return-for-exclusivity

 

[KALEL114]

Double Post!! Doh!

 

[Spidey17]

both bc as stated before the 16 cents is such a small number compared to how much the games/DLC are sold for. Not putting games on the PS3 based on that results in losing alot of potential money. Yeah 16 cents per gig is saved but then they lose the 5 or more dollars they would have gotten for it

+1

It can't be put into easier to understand terms than Havok just did. 16 cents lost is nothing compared to the money gained. It's clever how that the person in that article did the math for what Sony got from it, but not what the theoretical company still made. Could it be because it would ruin their point? Nah.