GT6 Sales Discussion

[SlipZtrEm]

With PSPlus membership required for online, I don't think you could label Sony exclusives as freemium.

Why not? Unless a hypothetical GT in this mold required online play.

PD has a track record in (on average) monthly updates.

Monthly updates =/= monthly DLC. People wouldn't pay for a monthly pack that consists of yet more fine-tweaking of the physics engine, or fixing bugs that appeared in the last update, while introducing ones the next update would have to fix.

PD has no established track record of being able to provide dedicated monthly DLC at cost.

They are known to have exceeded industry norms, raising the bar on several different occasions.

Raising the bar on what replay info can be utilized for? Yep.
Raising the bar on level of discrepancy between pre-release hype and post-release content delivered? Yep.
Raising the bar on manufacturer relationships via VGT? Sure (though debatable, since it too hasn't amounted to what they originally promised).
Raising the bar on lack of communication? Sure.

 

[jimipitbull]

You are making claims based on figures that you have simply pulled out of thin air while ignoring those based on the actual attach rates for the GT series and proven industry figures for DLC take up. Why is that?

I presented two hypothetical scenarios. Based off the success of the series across 3 generations of console, I don't believe the numbers provided were unrealistic.

That said, figures pulled from thin air is a common theme across most pages of this thread.

 

[Nooboogering]

Why not? Unless a hypothetical GT in this mold required online play.



Monthly updates =/= monthly DLC. People wouldn't pay for a monthly pack that consists of yet more fine-tweaking of the physics engine, or fixing bugs that appeared in the last update, while introducing ones the next update would have to fix.

PD has no established track record of being able to provide dedicated monthly DLC at cost.



Raising the bar on what replay info can be utilized for? Yep.
Raising the bar on level of discrepancy between pre-release hype and post-release content delivered? Yep.
Raising the bar on manufacturer relationships via VGT? Sure (though debatable, since it too hasn't amounted to what they originally promised).
Raising the bar on lack of communication? Sure.

Is there politics in gaming? I wonder..no I don't really have to.
When playing a video game, the very thought of politics is way beyond what I want to be experiencing.
Why would Sony allow PD to raise the bar is a good question?
It's as if Sony deliberately told PD not to.
GT5 and GT6 are on opposite ends of their release date, (online)feature wise.

There is less traffic moving between Sony servers since car gifting ceased. When GT5 came out, you could send how many you wanted! But that was too much work for Sony admin.
If Sony brought out healthy profits and future proof innovations etc, maybe they would give the gaming division more love.

I'm just saying Sony have told PD to dumb down somewhat and not to worry about sales or in other words 'policing our fun'.

Why is Sony left out in debates like this?

 

[Scaff]

I presented two hypothetical scenarios. Based off the success of the series across 3 generations of console, I don't believe the numbers provided were unrealistic.

They require you to either double the highest industry DLC adoption rates or double the highest previous GT attach rate, while charging a DLC price that is higher than any season pass to date and that's not unrealistic?

Not to mention still failing to address PD's inability to provide monthly paid DLC for either GT5 or GT6.

That said, figures pulled from thin air is a common theme across most pages of this thread.

Indeed, that doesn't mean you should follow.

 

[mister dog]

Why would Sony allow PD to raise the bar is a good question?
It's as if Sony deliberately told PD not to.

 

[Johnnypenso]

As has been pointed out already that assumes a take up rate that is well above anything that has been managed with Freemium games, your second example requires a 20% uptake based on 'selling' 10 million units, or more than twice the high water mark for this business model!

A point further supported by this, get 10% and you are at the very top of the conversion curve.

Keep in mind that Sony and PD have in the past looked at and rejected it (the original GTHD concept was exactly this), not to mention the track record with DLC.

Now lets look at some actual numbers to get a rough set of figures, GT5 had an adoption rate of approx 12.5% of PS3 users (80 million PS3's / 10 million GT5's roughly), 13.5 million PS4 have been sold, 12.5% of which is 1.68 million 'sales' of GT. A high adoption rate of 10% for DLC (and that is at the top end of the scale) would be 0.168 million purchases. Even at the option of a $120 a year subscription model (can you name another season pass that expensive) it would be $20.16 million.

Now this would scale at more PS4's are sold, but its nothing like the figures you are suggesting at all, even if PD launched two years from now (with an assumed PS4 base of around 40 million) and maintained a 12.5% attach rate, with 10% DLC hit and $120 a year subscription model its $60 million. Which is what GT5 cost to develop as a minimum. That would require them to make GT7 and support a years worth of DLC for less than GT5 cost to develop just to break even!

I've asked the question twice now of Zer0 and he has ignored it, and that is what exactly has PD's record of chargeable DLC for GT6 been like? It was stated that car and track packs would be regular for GT6 (after the sporadic nature of GT5) and all that PD have to bring in revenue for GT6 via DLC is credit packs!

For this to be a viable model it would require PD to support a DLC strategy that they have a track record of failing to achieve and also exceed all industry norms for that model.

That's not a recipe for a sound financial return at all.

The other thing to consider is would they sell more DLC if the game was free vs. if the game was sold at full price because DLC will still sell if the game is at full price. In fact, the figures could be nearly identical for all we know in which case the entire revenue stream from initial sales of the game is lost for zero gain. It's also entirely possible people might buy more DLC if they purchased the game because they perceive it to be of higher value than something the received for free.

 

[synon]

A successful financial investment would require it to more than cover the cost of development and you believe that could be achieved simply in terms of increased sales of PS4's (so units that would not have been purchased without the inclusion of GT7 on PS4).

Citation required please, because these number of going to be rather interesting.

GT5 cost approx $60 million to develop (and Sony then have to pay out on marketing and distribution on top of that), its unlikely a PS4 version would cost less (particularly given the new building and additional staff PD now have, not to mention the fact that dev costs increase with each generation).

Forbes put the PS4 at $18 profit per unit on manufacture alone back in 2013, however that doesn't include marketing, distribution, etc. costs (its pure component and assemble costs).

That would require GT7 to shift 3.3 million units that would otherwise never have been sold at all for you argument to hold true (and assumes that dev costs don't increase, GT7 marketing and distribution costs are all zero and all ancillary costs for Sony around the PS4 have been off set).

So what your looking for is something to prove that GT7 (if free) would increase PS4 sales by at least 3.3 million to people who would otherwise not by the system.

Doesn't the revenue from future software sales, PS+ etc, also have to be factored in, not just the initial profit on the hardware?

So why were those factors apparently insufficient for GT6? I'm not seeing how the factors are so different, PS4+GT vs. PS3+GT. All that's changed is that the game has moved onto a new console.

Are you really trying to say that the only reason that GT6 sold poorly is because it was on PS3? It didn't seem to slow GT5 down much.

I imagine the factors being on the latest platform entail better graphics, not being considered too similar to the previous iteration, no next gen to affect sales etc.

 

[Imari]

I imagine the factors being on the latest platform entail better graphics, not being considered too similar to the previous iteration, no next gen to affect sales etc.

And we've seen the first release on a new console outsell the previous one markedly on one occasion, GT3.
And we've seen the first major release on a new console have about the same sales as the previous one on one occasion, GT5.

I'm not a big fan of the next gen excuse. GT6 is $20 now, and there are no next-gen competitors on PS4 to be playing instead. If people wanted to play it, they'd be playing it.

One could hope that people have decided to hold off for an early GT7, but after the GT5 debacle I sort of doubt it. Does anybody actually trust PD to deliver on time in full any more?

 

[Scaff]

Doesn't the revenue from future software sales, PS+ etc, also have to be factored in, not just the initial profit on the hardware?

Before you even get to that point you have to show that significant sales of additional PS4's would come just from a free GT title, i.e. someone who is only buying a PS4 for that reason. Oh and keep in mind that as a free-to-play title PS+ would not be required for it (unless Sony wish to go back on a commitment for Free to play not needing PS+ to play online).

If someone is going to buy a PS4 anyway, a free copy of GT is not a sensibly financial move at all, its an utter waste of money for Sony. Keep in mind that the GT5 attached rate was 12.5% and certainly not all of those people bought a PS3 just to play it, it may seem odd that for many of the GT die-hards to understand that the majority of people (by a large margin) didn't buy a PS3 for just GT.

The claim made was that a free GT title would be "successful financial investment" fro Sony, yet oddly enough nothing has been shown to come even close to backing that up. DLC doesn't do it, that much is clear and no one seems to be able to show how many additional PS4s would be sold as a result of this alone.

 

[Rich S]

And we've seen the first release on a new console outsell the previous one markedly on one occasion, GT3.
And we've seen the first major release on a new console have about the same sales as the previous one on one occasion, GT5.

I'm not a big fan of the next gen excuse. GT6 is $20 now, and there are no next-gen competitors on PS4 to be playing instead. If people wanted to play it, they'd be playing it.

One could hope that people have decided to hold off for an early GT7, but after the GT5 debacle I sort of doubt it. Does anybody actually trust PD to deliver on time in full any more?

GT3 was a great game. I remember being in aww as a 13 year old playing that game. The pavement looked so real. Still remember the summers spent playing that one, probably one of the greatest console games in history.

I personally feel that GT7 can improve and build on everything GT6 is finished with unlike GT6 starting out with GT5 divided by 50%.

That being said I think PD have proved they can improve a game & build it as it goes. The idea being to get feedback from the community as to how to build the game similar to the Project cars mentality. I dont mind this, as long as IT GETS DONE AT SOME POINT. Obviously sales will suffer with a partially complete game. But right now I think GT6 is looking pretty for the player, for one thing you dont have to pay a penny to play and for another thing were looking at a new community feature, and hopefully a track creator. That's pretty slick, you might not get the ultra realism but you get freedom which is more important for the long term playability.

 

[nickg07]

GT is just too boring for the casual gamer.

Need for speed for all its sins had that 'grab you' and play feel about it with its presentation and music.

Look at COD abd it's success on the consoles, it's all ' release the hounds' and MEGA KILL in your face style.

GT just isn't exciting enough at face value to grab these people and keep them committed hence losing casual players generation after generation in key markets like USA (faddy) and Japan (very fickle and faddy).

 

[MasterFocus]

Delete

 

[trustjab]

You didn't 'explain' anything of the sort.



So you expect level demand for a product (which has never happened for a GT title ever - they have a large initial hit and then a long but rapidly decreasing tail) and also expect GT7 and all its DLC to cost less than GT5 to develop ($60 - $80 million)?

Now I know that maths is a subject that foxes you at times, but that really doesn't strike me as a of financial investment for Sony at all




No you are being 'super' optimistic with these figures and have not even addressed the question I asked regarding PS4 unit increase sales, nor have you supplied a single source to validate a bit of this, oddly enough (and its a bit of a pattern) others have that undermine your claims.



Remind us all again what have those DLC revenues been for the last full GT title?


I'm going to be blunt here. I do not believe you for a moment.

You have once gain utterly failed to supply a single source to validate you claims, yet try and jump on me in regard to sources (sources that are the same as they were in a conversation you ran away from 18 months ago).



And the point I'm making is that $20 profit over the life of a GT title is not even close to accurate.

GT6 may have retailed for $60 new, but now a year after launch its $30 (and has been for a while), which would make $20 wildly optimistic (your profit is not going to jump from 1/2 to 2/3 while the retail cost of the unit halves, not even in the most wildly optimistic model).

So how much do they make? Do you think the game profits a set amount per unit, or is it given a figure, for instance $50 million, from all its retailers for its product to then sell? Is retail costs in the budget? Do they rely solely on sales for the income? These are questions that would solve all the mysteries. Sadly, I doubt we'll ever see all the answers

 

[Tornado]

GT6 was developed in PS3 not PS4.

It's fantastically good timing that you fully committed to the "4 good, 3 bad" nonsense after repeatedly implying it, because I know you like extremely old Kaz quotes and this just came up in an other thread:

"To be honest, I can't really say the [original PlayStation] or the PlayStation 2 were able to sufficiently represent the realistically modeled physical world we wanted [in previous Gran Turismo games]," Yamauchi said. "With the PS3, we will be able to perform true physical modeling for the first time."

He certainly sounds similarly blown away by what the PS3 can do compared to the previous systems as he does with the PS4 now.







I wonder what happened?

 

[Scaff]

So how much do they make? Do you think the game profits a set amount per unit, or is it given a figure, for instance $50 million, from all its retailers for its product to then sell? Is retail costs in the budget? Do they rely solely on sales for the income? These are questions that would solve all the mysteries. Sadly, I doubt we'll ever see all the answers

That would depend entirely on accounting structure, but strictly speaking for software you don't make a penny profit until you have covered the costs of development, and we will never know for PD in exact terms because of the way in which they are structured within Sony's corporate structure (they only have to report that to shareholders - which consists of Sony and PD staff).

However we can take the general models from the industry as good model (and certainly better that just making things up), in which the publisher (Sony) would cover all manufacture, marketing and distribution costs (and take around 25-30% of the retail price for doing so and the developer would cover the development costs and take around 15% of the retail value for itself (so $9 per $60 retail or $4.5 per $30 retail unit). From that 15% it would need to cover all development costs and until its done that it will not have a profit.

So as an example if GT5 did cost $60 million to develop (and that would seem to be the case) the PD would not break even until around 6.67 million units have been sold, at $60 dollar retail. If you don't cover it when the retail drops to $30 then its going to take longer to hit that point.

Yes these are rough, indicative figures, but they are a better starting point that nothing and its also likely that Sony 'injects' cash into PD on a irregular basis and may well wave licence fees.

 

[Zer0]

So you can't actually show what you claimed you could, that giving away GT would be a successful financial investment for Sony (unless you define successful as loosing money).

Already explained and with an easy to follow examples to show the effect even with very low numbers, jimipitbull have used the same formula but with a more reallistic focus, but you decide to ignore others valid opinions than your own.

What a surprise, lets add it to the (growing) list. I await the claim (again) of bullying and misquoting in around six months time.

Is easy to grow a list of claims when you invent the content of them. In the other side people get banned for that.

Lets be blunt, your claim is unsupported, wildly speculative and doesn't stand up to even a basic level of analysis. Its not about having the time, its about you not being able to support your claims (again).

OH, the irony...

In other words its quite likely that DLC is the only thing that returned PD to profit with regard to GT5 and they would have only got around 15% of that as well, meaning they are most likely still having to be part funded by Sony and certainly could not survive for decades.

Again, not worth the time.

 

[Imari]

That being said I think PD have proved they can improve a game & build it as it goes.

I'm not entirely sure that they have.

I mean, obviously they've shown that they can continue to add to a game after release, but I'm not sure that they've shown that they can do this at a pace and a quality that would make it a viable strategy.

Looking at the evolution of GT6 over the past year, I doubt many people would be comfortable buying another unfinished game from Polyphony. To make an analogy, they may have shown that they can serve a 7 course meal, but they haven't shown that they can do it with the timing and quality that one would expect from a fine restaurant.

The idea being to get feedback from the community as to how to build the game similar to the Project cars mentality.

Lets not even go there.

Gran Turismo does not take feedback from the community, does not give feedback to the community, and is pretty much the polar opposite of the pCARS mentality. For the entire PS3 generation I've been hoping that they would pull their heads out of their collective backsides. At this point I think that hoping that Polyphony would engage with the rest of the world and recognise that there are plenty of good ideas out there for the taking is fantasy. Sadly.

Already explained and with an easy to follow examples to show the effect even with very low numbers, jimipitbull have used the same formula but with a more reallistic focus, but you decide to ignore others valid opinions than your own.

I pointed out how optimistic your numbers were. You brushed it off with "because GT", much as you brushed off the questions about why GT7 would be expected to sell more than GT6 with "because PS4".

If you want to claim that the name is worth so much that it makes what would be wildly optimistic numbers for any other game into a conservative underestimate for GT, then you're going to have to back that up with something. At the moment it looks awfully like wishful thinking. It might be true, but you very much haven't established that it's even plausible.

 

[Scaff]

Already explained and with an easy to follow examples to show the effect even with very low numbers, jimipitbull have used the same formula but with a more reallistic focus, but you decide to ignore others valid opinions than your own.

So 10% of all PS4 customer will pay for GT7 DLC will they?

That's the claim you are making, now given that the attach rate for GT5 was 12.5% that would mean that you have the equivalent of of 80% of GT purchasers will buy DLC from a freemium item, 8 times more than the highest industry level.

As for jimipitbull's figures you seem to have missed that they would require either an attach rate twice as high as the highest levels the series has ever had or a two fold increase over the highest level of DLC adoption the industry has. Not to mention needing people to spend $120 a year on DLC.

That his massively optimistic figuers are more realistic that yours only serves to illustrate one point, and that's just how absurd your claim is in the first place.

I'm not ignoring your figures, or his, I'm pointing out how far adrift they are from the realities of attach rates for the series and DLC buy-in, odd that you are not able to supply anything past 'but GT' to support these claims.

So please explain just how GT will get 8 times the buy-in rate of the highest industry figure, be sure to include the citations to validate it.

Is easy to grow a list of claims when you invent the content of them. In the other side people get banned for that.

I'm not the one inventing claims or do you need a link back to that absurd little rant of yours?

OH, the irony...

Really and your sources for the 8 fold DLC buy-in are? Please keep in mind I made no factual claim, you did. That a free GT on PS4 "would still be a successful financial investment for Sony", that leaves no ambiguity, it would be.

Extraordinary claims require extraordinary proof, you have supplied nothing at all to back it up apart for figures that far exceed anything the industry has seen before.

Then again you did once claim that Sony made $65 on every $60 copy of GT5 they sold.

Again, not worth the time.

From a different thread and totally out of context as that's DLC on top of paid for unit sales, not DLC alone.

Highly misleading and much as I would expect from you.

So aside from being unable to support your own argument you now have to try and mislead people do you.

Let look at what I actually said befor you 'edited it'

Are you actually aware of how much GT5 cost to develop?

Rough estimates are that it cost a minimum of $60 million dollar.

Now they have sold 9 million units, at lets say an average of $40 each (that's being generous considering how quickly it went to a budget release), which would give $360 million. Great if PD got all of that, but they get around 15%, which would return around $54 million.

In other words its quite likely that DLC is the only thing that returned PD to profit with regard to GT5 and they would have only got around 15% of that as well, meaning they are most likely still having to be part funded by Sony and certainly could not survive for decades.

Oh look its how DLC supported the units sales of GT5 to help ensure PD made a profit (all based around 15% of the retail price going to PD for both).

Odd that's not how you presented it isn't it? Almost like it was aiming to misrepresent me.


Explain exactly why you have presented this in such a misleading way or your gone and this time it will be for good. I've had enough of this from you and you certainly can't say you have not had your chances.

Make sure its in your next post.

 

[MKVSupra]

And we've seen the first release on a new console outsell the previous one markedly on one occasion, GT3.
And we've seen the first major release on a new console have about the same sales as the previous one on one occasion, GT5.

I'm not a big fan of the next gen excuse. GT6 is $20 now, and there are no next-gen competitors on PS4 to be playing instead. If people wanted to play it, they'd be playing it.

One could hope that people have decided to hold off for an early GT7, but after the GT5 debacle I sort of doubt it. Does anybody actually trust PD to deliver on time in full any more?

Its legit reasoning, I love Gt and its the #1 reason i game. But since getting a PS4 i haven't touched the PS3. Its just so damn slow and the game so freaking ugly. Its like driving a kcar by choice when you have a M3 parked next to it.

PDs PS3 failure is same as most Japanese devs, few actually knew what to do with it. None were great, there is no Japanese equivalent of Naughty Dog on it.

On time is debatable, but i do expect it sooner rather then later.

 

[Zer0]

I pointed out how optimistic your numbers were. You brushed it off with "because GT", much as you brushed off the questions about why GT7 would be expected to sell more than GT6 with "because PS4".

If you want to claim that the name is worth so much that it makes what would be wildly optimistic numbers for any other game into a conservative underestimate for GT, then you're going to have to back that up with something. At the moment it looks awfully like wishful thinking. It might be true, but you very much haven't established that it's even plausible.

I doubt that those generic Fremium charts you pointed would tell anything of the situation proposed, in the same way that this generic chart failed to tell anything regarding PD in the past, too many custom variables not conteplated. One of the most popular racing games in the world being free for the first time and ready to play to any of the PS4 purchasers the first time they plug the console. It could be considered the first game played for million of PS4 new buyers with no games or very few to expend their first hours or days, weeks, etc of gaming, many of them new to the series and potentially new adopters if they like it.

GT have already an install base of millions that will expend for sure more in DLC in a free GT than what your generic could tell. Over them, it will exist all the new PS4 buyers that can or can not expend money in a GT7 DLC. It's a very different situation and there are not charts or previous studys about it, except this genuine GT DLC data:

GT5 DLC = 1M DLC in two weeks with an user base of 7,43M
http://www.examiner.com/article/gran-turismo-5-dlc-breaks-1-million-sales

For the GT install base the DLC sales expectations should be even better thanks to the saving in the game purchase.

As an example. An stablished GT user base of 10M expending an average of only $10 in DLC per year during 5 years at this supossed rate:

1st year = 5M (5M x $10 = $50M)
2nd year = 7M (7M x $10 = $70M)
3rd year = 8M (8M x $10 = $80M)
4th year = 9M (9M x $10 = $90M)
5th year = 10M (10M x $10 = $100)

Total= $390M

Then all the new millions of PS4 buyers that will play the game, a suposed 40M, and only a suposed 5% (happy?) of the total expending $10 in DLCs per year.

1 year, 8M x $10 = 80M

5 years = $400M

And without contemplating the grow of the installed PS4 units year after year, and the potential grow of GT players.

Total in five years = $390M + $400 => $790M

There is a HUGE margin to cut whatever you want and still end with a great or an "enought" incoming, and also there is still room available for a potential better result if the DLCs were smartly choosen and promoted periodically in the game and console given the newer unusual HUGE potential userbase situation.

 

[Imari]

I doubt that those generic Fremium charts you pointed would tell anything of the situation proposed, in the same way that this generic chart failed to tell anything regarding PD in the past, too many custom variables not conteplated. One of the most popular racing games in the world being free for the first time and ready to play to any of the PS4 purchasers the first time they plug the console. It could be considered the first game played for million of PS4 new buyers with no games or very few to expend their first hours or days, weeks, etc of gaming, many of them new to the series and potentially new adopters if they like it.

Maybe so. But can you quote any examples of games that went freemium and were more successful than expected based on their established name?

You're advocating throwing away the only data we have, the generic freemium model which works for everything from Angry Birds to Joe's Second Awful Game, with little more rationalisation than "because GT". And then what you're replacing it with has no rationalisation, other than "this is a possible best case scenario".

How seriously are we supposed to take this? The numbers that you're presenting have absolutely no basis, and could just as well be replaced with all zeroes, no uptake, no profit.

GT have already an install base of millions that will expend for sure more in DLC in a free GT than what your generic could tell. Over them, it will exist all the new PS4 buyers that can or can not expend money in a GT7 DLC. It's a very different situation and there are not charts or previous studys about it, except this genuine GT DLC data:

GT5 DLC = 1M DLC in two weeks with an user base of 7,43M
http://www.examiner.com/article/gran-turismo-5-dlc-breaks-1-million-sales

You know what the difference is? The statistical base of 7.43 million is 7.43 million people who have demonstrated that they're willing to spend money on GT. These are people that plonked down hard cash just to play the game in the first place.

When you go to a freemium model, suddenly you have a huge influx of players who are willing to play for zero, but are unwilling to pay any amount for the game and wouldn't have bought it had it been a regular game. That's why traditionally the percentage of people who actually pay in a freemium game is so low.

And that's why you gain so little from making GT freemium. Freemium is great when people don't know about your game, and in order to get them enthused enough to pay money you have to actually let them play the game a bit. I'm not sure how much Gran Turismo benefits from that.

For the GT install base the DLC sales expectations should be even better thanks to the saving in the game purchase.

Just because people didn't have to spend money on the game, doesn't mean they'll turn around and spend that money on DLC. In fact, there are cases where the opposite is the case, people feel pressured to spend money to have the DLC because they already spent money on the game. It's called the fallacy of sunk costs, and a lot of people fall prey to it.

It's going to work both ways depending on the person, but your assumption that people who save money buying the disc will automatically put that into DLC is not valid. They're just as likely to spend it on something else.

As an example. An stablished GT user base of 10M expending an average of only $10 in DLC per year during 5 years at this supossed rate:

1st year = 5M (5M x $10 = $50M)
2nd year = 7M (7M x $10 = $70M)
3rd year = 8M (8M x $10 = $80M)
4th year = 9M (9M x $10 = $90M)
5th year = 10M (10M x $10 = $100)

Total= $390M

See, and you've gone from ~15% of customers purchasing DLC in GT5 to 100% purchasing it under your system. How did that happen?

Then all the new millions of PS4 buyers that will play the game, a suposed 40M, and only a suposed 5% (happy?) of the total expending $10 in DLCs per year.

1 year, 8M x $10 = 80M

5 years = $400M

Say that 5% is a reasonable assumption, you're also assuming that every single PS4 owner will download and play GT and is thus a valid part of the pool of potential DLC purchasers.

No freaking way.

You could preload the game on every single system sold, and you still won't get anything like 100% of people playing it. Some people just don't like racing games.



GT5 sold ~10 million in a field of 70-80 million PS3s. Let's just call it 15%. Let's be generous and say that there's another 30% of people who would be happy to play the game but wouldn't buy the disc (even when it was on heavy discount for $20 with all the DLC). So you get ~45% of PS3 owners who would play a free GT game, and extrapolate that to PS4.

Of course, two thirds of those are by definition people who are happy to play for free but won't spend money. Still, you can always hope that once they play the game they are swayed to get into it more, and some will be. But that's where the freemium statistics come back into play. Those people are not GT fans, and are almost certainly very well described by the standard freemium model, so you'll get somewhere between 1 and 10% of them converting.

At this point, if you're really, really optimistic, I figure you've got ~3% of all PS4 owners paying for DLC (30% non-GT owners that will play for free x 10% freemium conversion rate) plus somewhere between another 3% and 15% of the previous GT fans (15% of console owners purchase GT x somewhere between 15% and 100% of those will spend money on DLC). So grand total, you've got somewhere between 6% and 18% of PS4 owners actually paying for DLC, and it's probably more like the low end.

1st year = 600K-1.8M purchasers.
2nd year = 1.2M-3.6M purchasers.
3rd year = 1.8M-5.4M purchasers.
4th year = 2.4M-7.2M purchasers.
5th year = 3.0M-9.0M purchasers.

Total lifetime = 9.0M-27M purchases.

I think your $10 average purchase is generous too, but let's say for the sake of argument that it's correct. You've then got revenue of between $90M and $270M.

That's a pretty big difference to your numbers ($790M), and the high end of that is what I would call pretty generous, as I don't believe for a minute that 100% of people who would purchase a disc version of GT would pay for DLC on a free version.

Considering the costs involved in developing GT5 and that there's going to need to be 5 years of support for the game with frequent and engaging DLC, I think there's a fair chance that $90M of revenue would be an overall loss for Sony and PD with that sort of game. And $270M isn't exactly silk underpants territory.

And without contemplating the grow of the installed PS4 units year after year, and the potential grow of GT players.

Total in five years = $390M + $400 => $790M

There is a HUGE margin to cut whatever you want and still end with a great or an "enought" incoming, and also there is still room available for a potential better result if the DLCs were smartly choosen and promoted periodically in the game and console given the newer unusual HUGE potential userbase situation.

It's a huge margin based on a bunch of assumptions that really aren't that supportable. You've just pulled a bunch of numbers out, assumed that the world always works in the way that would benefit GT best and run with it.

I'm sorry, but there's no way on God's green earth that a free GT would come anywhere close to that. I've shown what I think is a more reasonable set of assumptions (and explained where I got the numbers from).

This is probably why GTHD never happened, because Sony/PD did the same calculation and came to the conclusion that even in a best case scenario they didn't really stand to make as much as they did from a disc based game. And the negative backlash they they received on announcing GTHD pretty much guaranteed that the best case scenario was never going to happen. Risk too high for a reward that isn't that good and isn't that likely.

But by all means feel free to keep trying to explain why this freemium version would be better than another disc based game.

 

[Zer0]

Explain exactly why you have presented this in such a misleading way or your gone and this time it will be for good. I've had enough of this from you and you certainly can't say you have not had your chances.

Because you have accused me to speculate and to made unsupported claims and you also did a similar move in the past to sustain a point. Speculating with a generic found % earning data very unrelated to the PD situation as a VIP 1st party developer and with no other official source to support it.

What's wrong with that?

And I would need to copy this for the third time in case you forgot what I'm discussing in this thread. I'm not claiming anything, just arguing about a theoric situation that will not happen.

And in before you start to picking and asking for proves I have to remind you that this is a speculative thread and an opinion of a theoric situation that will never happen and can not proven right or wrong, just plausible or not.

 

[Johnnypenso]

GT5 DLC = 1M DLC in two weeks with an user base of 7,43M
http://www.examiner.com/article/gran-turismo-5-dlc-breaks-1-million-sales

For the GT install base the DLC sales expectations should be even better thanks to the saving in the game purchase.

As an example. An stablished GT user base of 10M expending an average of only $10 in DLC per year during 5 years at this supossed rate:

1st year = 5M (5M x $10 = $50M)
2nd year = 7M (7M x $10 = $70M)
3rd year = 8M (8M x $10 = $80M)
4th year = 9M (9M x $10 = $90M)
5th year = 10M (10M x $10 = $100)

Total= $390M

Then all the new millions of PS4 buyers that will play the game, a suposed 40M, and only a suposed 5% (happy?) of the total expending $10 in DLCs per year.

1 year, 8M x $10 = 80M

5 years = $400M

And without contemplating the grow of the installed PS4 units year after year, and the potential grow of GT players.

Total in five years = $390M + $400 => $790M

There is a HUGE margin to cut whatever you want and still end with a great or an "enought" incoming, and also there is still room available for a potential better result if the DLCs were smartly choosen and promoted periodically in the game and console given the newer unusual HUGE potential userbase situation.

Ironically, you are making the case against giving the game away. Assuming the link you have is accurate (in the past if something didn't come directly from PD it wasn't considered gospel. See-Quantum Leap in DLC) and 1Million people paid for DLC after paying for the game, what you've done is set a baseline that 1 million GT users are willing to buy DLC even after paying for the game. So in order for Sony to benefit from giving GT away, they have to generate extra DLC revenue over and above that which the rabid fanbase would have purchased anyway.

Who is most likely to buy DLC? Rabid fans who would buy the game anyway
Who is least likely to buy DLC? Casual players who are more than happy with 1200 cars and 100+ tracks and don't play very often anyway.
Who likely will never buy DLC? People who get the game for free and have little to no interest in driving games.

Arguable, since the price of the game drops to $20 or less as GT6 has, anyone who has even a remote interest in the game will buy it at that price. It's easy to surmize then that giving the game away to people who wouldn't even buy it at $20, which is 85% give or take of the install base, will not lead to any additional DLC sales or certainly not enough DLC sales to overcome the lost revenue of literally $100's of millions.

 

[Scaff]

Because you have accused me to speculate and to made unsupported claims and you also did a similar move in the past to sustain a point. Speculating with a generic found % earning data very unrelated to the PD situation as a VIP 1st party developer and with no other official source to support it.

What's wrong with that?

I used industry data to support a set of figures that were quite clearly stated as being rough approximations, you have supplied no sources at all to support something that was stated by you as fact (would still be a successful financial investment for Sony - do you not understand the word would - its a statement of fact - not rough or approximate).

That still doesn't explain why you edited a good chunk of context out, why it doesn't support your claim and why you once again have chosen to distract rather than explain and why you still refuse to use sources to support your factual claims.

I've used sources to support rough approximates, why can't you supply sources to support factual statements?

And I would need to copy this for the third time in case you forgot what I'm discussing in this thread. I'm not claiming anything, just arguing about a theoric situation that will not happen.

No you made a factual claim and are now trying to justify it with shoddy logic and poor maths.

You claim 1 million DLC for the first GT5 pack, yet forget to mention that he source actually says downloads and doesn't break down what that means. Given that the DLC launched was made up of multiple packs, one of which contained a hundred paints and another contained 90 items of race gear getting to a million may be rather easy (is the complete pack 1 download or 210 downloads? Given PDs method of counting cars I would not put the later out of the question). Oh and the vast majority of which don't come close to the price you put on DLC

You then pull some great logic out of the air in that by making GT free suddenly every one with a PS4 will want it and spend money on it, yet not a single piece of data or source (even your own one) supports this claim. Yet all the data we do have in regard to freemium products contradicts this, yet you dismiss it with no basis at all (because its GT is not a basis to do this at all.

You made a factual claim in haste, one that not a single source (including PD who abandoned such a model) support, and rather than simply acknowledging that and move on you follow the same tired old past of simply burying yourself in absurd, unsupported claims while throwing invalid accusations around and miss-quoting people.

Well its ends now. Any factual claim you make in the future will be backed up with sourced evidence, fail to do so and your gone. The goodwill that would normally exist in these situations has long been burned by your own actions.

Your account is on last chance status and you will receive no further warnings.

 

[Tornado]

Is easy to grow a list of claims when you invent the content of them. In the other side people get banned for that.

"This pre-release mockup shows the true cost of GT6's microtransactions. The stuff PD has posted on their website is false."
"GT5 sounds much better when properly recorded. The fact that this specific example sounding better is merely a result of a audio glitch GT5 briefly had (which is pointed out in the video description) is false."
"Here is a comparison of both games in a real multichannel environment. The fact that this specific example is using a Dolby Pro Logic stereo system rather than true multichannel audio equipment (which is pointed out in the video description) is false."
"Here is a video showing how close a real life car drives compared to GT5. The fact that the real life car isn't actually in GT5 is false."
"Here is a video proving GT5's framerate in the rain. The fact that this video doesn't contain any rain is false."
"The Xbone simply isn't powerful enough to do what developers will accomplish on the PS4, and the whole internet is aware of it. The fact that the Google search I provided as 'proof' brings up two game developers in the first 7 links that say otherwise is false."

 

[Griffith500]

That would depend entirely on accounting structure, but strictly speaking for software you don't make a penny profit until you have covered the costs of development, and we will never know for PD in exact terms because of the way in which they are structured within Sony's corporate structure (they only have to report that to shareholders - which consists of Sony and PD staff).

However we can take the general models from the industry as good model (and certainly better that just making things up), in which the publisher (Sony) would cover all manufacture, marketing and distribution costs (and take around 25-30% of the retail price for doing so and the developer would cover the development costs and take around 15% of the retail value for itself (so $9 per $60 retail or $4.5 per $30 retail unit). From that 15% it would need to cover all development costs and until its done that it will not have a profit.

So as an example if GT5 did cost $60 million to develop (and that would seem to be the case) the PD would not break even until around 6.67 million units have been sold, at $60 dollar retail. If you don't cover it when the retail drops to $30 then its going to take longer to hit that point.

Yes these are rough, indicative figures, but they are a better starting point that nothing and its also likely that Sony 'injects' cash into PD on a irregular basis and may well wave licence fees.

Why does the developer need to "profit" in this case? Also, to my simple mind, if the 60 million dollar figure doesn't include things like getting the game into stores and letting everybody know about it, then that's simply not how much it cost - it's a useless figure. I find that unlikely.

It seems more likely that PD is an ongoing expense for Sony and sales are absorbed into the larger body of the organisation. Budgets then are determined purely on forecasted sales, which probably explains why GT5P blew Sony's expectations out of the water.

I'm not really interested in the free to play argument, too many unknowns given the stature of the series and its "unusual" additional content model. I think it'd be a close run thing between the already high draw the game experiences at full price, and that with zero barrier to entry if free (pricing of content is another matter). Suffice it to say, the game itself and its content delivery would have to change a great deal, so extrapolations on the current product in respect of feasibility are pointless, I think.

 

[Scaff]

Why does the developer need to "profit" in this case? Also, to my simple mind, if the 60 million dollar figure doesn't include things like getting the game into stores and letting everybody know about it, then that's simply not how much it cost - it's a useless figure. I find that unlikely.

Given that I'm not the one who claimed it would be a 'Successful Financial Investment' for Sony I have no idea why you are asking me?

I asked the very same question, the answers have made no sense at all and show it to be anything but a 'Successful Financial Investment'.

As for the $60 million being a useless figure if it doesn't include marketing and distribution, I totally disagree. Given that PD develop the product and Sony distribute and market the product, not only does it make total sense to separate out the figures (as they appear on different balance sheets) but it would be required for Sony to know what impact their investment(s) in PD are returning or not. That's a long way from a useless figure.

It seems more likely that PD is an ongoing expense for Sony and sales are absorbed into the larger body of the organisation. Budgets then are determined purely on forecasted sales, which probably explains why GT5P blew Sony's expectations out of the water.

Given the way the two are structured I find that unlikely, they are a legal subsidiary of Sony, which means that they can be 'bankrupted' if required and closed with no risk to Sony, yet they would be accountable to Sony for a return.

Is it likely that Sony pump investment into them? Without a doubt and I have consistently said as much for years, does that mean that making GT free and hoping that increased PS4 sales and DLC will make for a 'Successful Financial Investment'? Not at all and its almost certain (based on the best information on sales breakdown and distribution) to result in a less 'Successful Financial Investment'.

I'm not really interested in the free to play argument, too many unknowns given the stature of the series and its "unusual" additional content model. I think it'd be a close run thing between the already high draw the game experiences at full price, and that with zero barrier to entry if free (pricing of content is another matter). Suffice it to say, the game itself and its content delivery would have to change a great deal, so extrapolations on the current product in respect of feasibility are pointless, I think.

I disagree, they may not tell the full story, but they certainly give strong indicators.

Sources from industry professionals have already been provided (and ignored by certain members) that show PD and GT as a product are unsuitable for this model, that PD and Sony themselves rejected the model seems to also be totally lost on the member making the claim.

Its far more likely (again based on the industry sources that have been posted here) that the GT hardcore would buy it anyway as a product and are the most likely to buy the DLC, the casual GT buyers would now have it for free and no evidence exists that they would be more likely to buy DLC as a result (in fact at least one of the sources show that they would be less likely as the 'free' nature of the product has just devalued it and its now a disposable item).

This would certainly result in a massive reduction in full game sales revenue (to zero) with no evidence that it would increase DLC sales at all and no evidence it would increase PS4 sales either (in comparison to people buying GT7 and a PS4 anyway - which the hardcore would anyway).

Freemium products need to be cheap to develop and distribute (GT is not), with a solid DLC strategy and a track record of implementing that strategy (which PD do not have).

I don't see anything that makes this a 'Successful Financial Investment', hence the reason why I asked for some detail behind that, and so far nothing that has been provided supports that at all.

 

[Griffith500]

Given that I'm not the one who claimed it would be a 'Successful Financial Investment' for Sony I have no idea why you are asking me?

I asked the very same question, the answers have made no sense at all and show it to be anything but a 'Successful Financial Investment'.

As for the $60 million being a useless figure if it doesn't include marketing and distribution, I totally disagree. Given that PD develop the product and Sony distribute and market the product, not only does it make total sense to separate out the figures (as they appear on different balance sheets) but it would be required for Sony to know what impact their investment(s) in PD are returning or not. That's a long way from a useless figure.



Given the way the two are structured I find that unlikely, they are a legal subsidiary of Sony, which means that they can be 'bankrupted' if required and closed with no risk to Sony, yet they would be accountable to Sony for a return.

Is it likely that Sony pump investment into them? Without a doubt and I have consistently said as much for years, does that mean that making GT free and hoping that increased PS4 sales and DLC will make for a 'Successful Financial Investment'? Not at all and its almost certain (based on the best information on sales breakdown and distribution) to result in a less 'Successful Financial Investment'.




I disagree, they may not tell the full story, but they certainly give strong indicators.

Sources from industry professionals have already been provided (and ignored by certain members) that show PD and GT as a product are unsuitable for this model, that PD and Sony themselves rejected the model seems to also be totally lost on the member making the claim.

Its far more likely (again based on the industry sources that have been posted here) that the GT hardcore would buy it anyway as a product and are the most likely to buy the DLC, the casual GT buyers would now have it for free and no evidence exists that they would be more likely to buy DLC as a result (in fact at least one of the sources show that they would be less likely as the 'free' nature of the product has just devalued it and its now a disposable item).

This would certainly result in a massive reduction in full game sales revenue (to zero) with no evidence that it would increase DLC sales at all and no evidence it would increase PS4 sales either (in comparison to people buying GT7 and a PS4 anyway - which the hardcore would anyway).

Freemium products need to be cheap to develop and distribute (GT is not), with a solid DLC strategy and a track record of implementing that strategy (which PD do not have).

I don't see anything that makes this a 'Successful Financial Investment', hence the reason why I asked for some detail behind that, and so far nothing that has been provided supports that at all.

I wasn't interested in the battle you were having, I thought I made that clear.

I'm also not interested in accounting tricks. Part of a game's development cost is marketing, regardless of which balance sheet it shows up on. Since in this case the money all comes from the same place ultimately, I doubt that 60 million excludes marketing etc. It's a budget, or it isn't. The way you stated it made it seem the 60M was to cover PD's (assumed: 15 parts out of 40-45, as you stated) 30% only. Which would serve to grossly overestimate the total cost of the product, unless there's weirdness in the respective profit margins.

Equally, there is no way to tell how 'financially sucessful' GT6 was (the whole point of this thread), so comparisons to a different product strategy cannot be made, even to rebuke someone else's claim. If the 60M figure is an incomplete budget, as you state, then we can't even assess GT5's 'financial success'. Either in making a claim, or in rebuking another.

I find it unlikely that PD would go F2P, but I won't presume to base that on any perceived financial insight on Sony's behalf, rather previous product design decisions alone (more directly evidenced, although we don't know what they didn't chose to do, nor why). I could be wrong.

 

[Scaff]

I wasn't interested in the battle you were having, I thought I made that clear.

You asked the question, I can;'t really help it if you don't like the answer.

I'm also not interested in accounting tricks. Part of a game's development cost is marketing, regardless of which balance sheet it shows up on. Since in this case the money all comes from the same place ultimately, I doubt that 60 million excludes marketing etc. It's a budget, or it isn't. The way you stated it made it seem the 60M was to cover PD's (assumed: 15 parts out of 40-45, as you stated) 30% only. Which would serve to grossly overestimate the total cost of the product, unless there's weirdness in the respective profit margins.

No a games development costs are the costs associated with development and come from the developer, the games distribution and marketing costs come from the publisher. That's not accounting tricks that's how the industry works, as has been clearly shown by every source provided.

The costs given were specifically stated by the developer as the cost to make the game, that you are reading more into that would simply seem to be confirmation bias.

Equally, there is no way to tell how 'financially sucessful' GT6 was (the whole point of this thread), so comparisons to a different product strategy cannot be made, even to rebuke someone else's claim. If the 60M figure is an incomplete budget, as you state, then we can't even assess GT5's 'financial success'. Either in making a claim, or in rebuking another.

Oddly enough that's what I have said all along, which would be why I have stated they are rough figures based on industry norms, which are a damn sight more valid (which still being rough) than pulling figures out of the air.

I find it unlikely that PD would go F2P, but I won't presume to base that on any perceived financial insight on Sony's behalf, rather previous product design decisions alone (more directly evidenced, although we don't know what they didn't chose to do, nor why). I could be wrong.

And yet you seem to be happy to dismiss them based on far less.

 

[synon]

Interestingly, Sony are now offering the latest iteration of a playstation exclusive, Little Big Planet, for free, albeit in the US only.

http://arstechnica.com/gaming/2014/12/psa-400-ps4-now-officially-comes-with-one-of-four-free-games/