PS3 and Rev to Drive Online Content Sales

[cliffbo]

To me this is the most important part of Sony's plans. yes the games are going to be excellent, but its online commerce that will make them the money they need to cover their losses. i say they'll be into profit within two years.

Tech market analysts at ABI Research have reported that online game content sales for consoles will override revenues of subscription fee models, thanks in part to free online services from Sony and Nintendo.
A study by the firm forecasts that gaming downloads for consoles will grow from less than $1 million in 2005 to over $3.8 billion by 2011, capturing the majority of overall revenues from subscription models.

While Microsoft already has a content download service in the form of Xbox Live Arcade and Marketplace, online platforms from Sony and Nintendo will offer free multiplayer gaming, supported partially by paid downloadable content. Currently, online multiplayer is only available to subscription-paying Xbox Live Gold subscribers, and not to free Silver users. ABI speculates that Microsoft may be forced to drop its subscription model and opt for a primarily content-supported model.

"Sony's new PlayStation Network Platform - which will launch with its Playstation 3 console - and Nintendo's Wi-Fi Connection service for its Nintendo DS and Revolution, are changing the market for online console and handheld services," said principal analyst Michael Wolf. "With both of the dominant handheld gaming platforms and two of the next generation consoles doing away with fees for the majority of online gameplay, consumers will come to expect online multiplayer gaming as a core component included with the purchase of the game."

Wolf added that "online gaming for consoles and handhelds is entering its golden age," and that in-game ads will become more important as online gaming grows.

"While some online console gaming services, such as MMOGs, will continue to require monthly or annual fees, the clear direction for the future is content delivery," he said. "Advertising will also become an increasingly important business component as the number of online gamers increases dramatically over the next few years."

At the Game Developers Conference, Nintendo touted the expansion of its Revolution content download plan, with the announcement that Sega Genesis and TurboGrafx games will be available to download for use with the system's "virtual console".

Also during the GDC, Sony studios head Phil Harrison said, "We're moving from a disc-based business to a network-based business, with more complex revenue streams. PlayStation Network Platform can augment the current business model with content downloads, episodic content.

http://www.gametab.com/news/525966/

couple that with this:

According to a report in the South Florida Business Journal broadband subscriptions have shot up from 2 million in 1999 to 43 million now.
The story's numbers come from Consumer Electronics Association President and CEO Gary Shapiro revealing the results of the CEA's study on broadband in America. As expected with the increase in broadband connections, the number of dial-up connections slipped from 74% in 1999 to 36%.

The documented increase in broadband is interesting, but the most interesting nugget from the report doesn't concern the Internet at all. Instead, the CEA reports that of the homes that don't currently own HDTVs (which is the vast majority of homes), 33% of those households are interested in purchasing an HDTV during the next two years. The Smith household is one of them.

http://www.gametab.com/news/526016/

and of course this:

Today's revelation courtesy of the US patent office is news of wi-fi connectivity and distribution between the PSP and the as yet unseen PS3. Sony has filed a patent number 20040266529 (for those of you who'd like to check it out in full), which appears to show that the PS3 and PSP will be able to connect wirelessly and share content including games, movies and music.

http://www.computerandvideogames.com....php?id=114281

Sony are in a strong position.

Have incentives like this:

Very soon, credit card companies and game makers will reward their customers who spend money in the real world using private label "rewards" credit cards. They will use gifts of virtual currency such as Blizzard's World of Warcraft gold and Second Life's Linden dollars.

A special "News from the Future" from MAKE:Virtual.

We're a nation obsessed with credit cards. Seriously. Credit card companies and retailers all offer some form of loyalty program to commit to and encourage us to spend more of our hard earned dollars. Airlines pioneered these loyalty programs, convincing us to stick to a single carrier, and then rewarding with upgrades and travel. A company will do whatever it can to keep the churn down and spending high. Top brains at these organizations will obsess over how to keep you spending more and "join" their brand or bolt on to one you're already in. Like Nascar? Visa has a credit card for you, complete with a reward points program that can earn you clothing and chance to ride in a pace car, or so I'm told, I don't have the Nascar Visa card. But one group has been ignored, at least for now, the juiciest demographic of all, online gamers & "in world makers"...


A quick tour of the different MMORPG's reveals millions of players spending hours and hours each day, leveling their characters, as well as earning and spending some type of virtual currency (World of Warcraft currently has over 6 million players). While World of Warcraft doesn't allow their players to build gold with real dollars, there is of course an "underground" market that buys and sells WoW gold. Linden Lab's Second Life has a virtual currency, called Linden Dollars which unlike World of Warcraft "residents" can buy, sell and earn a living from Lindens - there's a growing population of residents who make their living in the real world entirely from the revenue they procure in Second Life.

As the time of this writing, there are 166,922 residents, spending over 135,984.00 in 24 hours and $6.5 million USD in transactions took place is about 20 days. In 2006, there's a good chance $100 million USD dollars worth of transactions will flow through the virtual world of Second Life. Linden recently rolled out their own exchange, Lindex, meaning - they're almost a bank now.

It's not a matter of if, just when - credit card companies, Pay Pal, Amazon, eBay and the individual "gaming" companies eventually bridge the real and virtual currencies with loyalty programs and private label credit cards - there's too much money out there to -not- to do this. This "demographic" is the battleground. The more you spend, the more you earn, sorta. Virtual $ isn't a crappy electronics doo-dad, it's just a number in a computer. Maybe you'll get some discounted airline tickets when you hit level 60 too, you deserve it! Earn your way to a new graphics card, why not.

With tens of thousands (and eventually millions) of "in world Makers" selling their virtual goods, routing the real money to and from a closely integrated bank / credit program seems to make sense. The virtual marketplace has happened, it just hasn't been installed everywhere yet. Maybe this will help a new generation of credit card owners manage their credit, it's hard to go $20k in debt in WoW, a lot easier in the real world...

Sure, there are complexities to any economy, real or virtual, and limits to how much currency would or could make an impact - but nimble MMO's with economies will figure this out. There's fraud and mischief that would develope, but that's true always. Spend in the real world, earn virtual currencies for the "games" you play, that part is simple. This can apply to Sony, Xbox, etc...Xbox 360 already has "gamer cards", ways to buy things too.

There's another component to a loyalty program for online gaming - avatars. If you "play" any of these MMORPG's a lot of emphasis on the appearance of your virtual identity, your avatar. In Second Life, it's impossible to fly/walk without seeing virtual clothing makers and avatar stores. You can (and will) spend countless hours dressing up and personalizing your digital doppelganger - even in Warcraft, your avatar is something you spend months and soon, years developing.

Part of a future private label credit card will likely be card personalization. With low(er) cost one-off printing and credit card companies looking to make their offerings more valuable, getting a credit card with your avatar on it is worth a lot. This isn't a new idea, personalized checks and license plates have been around for decades - in the last few years it's been possible to get custom photos on US postage stamps. With Second Life it's all user created content - I'm looking forward to going to the virtual bank for a photo shoot for my card.

There are a lot of neat integration and meaty engineering projects to get this going - the idea is simple, but in practice, we're a ways off from plunking down a shiny orc killing branded card to pay for dinner to later use the earned gold for a new sword. There are a handful of companies that can bridge the worlds, I've been talking with The Electric Sheep company (I'm not affiliated with them, just like them a lot) and with their SLboutique (web / virtual and real world commerce) I think they're a contender, they certainly have the technical chops - you see, this "virtual world reward points" idea is approaching now 5 years old, and with this article, I hope will get some conversations going, again. A little history, back in the day, I pitched to a big credit card company in 2001, after bringing a Macromedia Flash and Generator based online bank to market, but it was all just way way too early, the bank and this, there wasn't an article-a-day about the billions of dollars in virtual currencies, there wasn't a WoW, there wasn't a Linden dollar - now there is - so who knows, let's see what happens. If you're interested in making this real, er, virtual, drop me a line, or just go do it, ktx.

and i think you'll have to agree, the tails about the wag the dog

http://www.makezine.com/blog/archive...cards_ear.html

[Sovereign]

Haha, Xbox may have to free it all up on. Saw that coming. Unless they make everything free and not do payable content all together.

[cliffbo]

Haha, Xbox may have to free it all up on. Saw that coming. Unless they make everything free and not do payable content all together.

yes like Sony said the HD revolution starts with them and it seems that the online service that goes with it also starts with them, with Nintendo also with a similar model. this will force MS into an about turn on its pay to play phillosophy and make the comments about being happy that Sony are following suit leave them with egg on their face.

[Old_Timer!]

Nice post Cliff, man I remember back in the days I think it was Sega that mentioned they envisoned a set top box that customers could download games and play. Now Sega is out of the console buz, and even Nintendo is on the DD bandwagon. I say Viva la free Online....... DD was and is the Future....

[cliffbo]

Nice post Cliff, man I remember back in the days I think it was Sega that mentioned they envisoned a set top box that customers could download games and play. Now Sega is out of the console buz, and even Nintendo is on the DD bandwagon. I say Viva la free Online....... DD was and is the Future....

the combination of all four things are going to be awesome. the credit card idea is an unexpected revenue flow and has taken me by surprise. good idea though, even though i know its only going to be used for fleecing the unsuspecting.

[Domination]

I will repeat what I have been saying for awhile since it first started: not every consumer is willing to come out of their pocket to play online games - especially the average gamer. It's common sense. Those under subscription servers are usually hardcore gamers. From what I've gather over these pass years, it is most obvious that Sony doesn't have (or should I say follow) a hardcore marketing ploy. It never worked before, and it still doesn't work. So it doesn't make sense why they would suddenly follow one now. I'm not entirely sure what Nintendo is doing, but it seems they, too, understand this.

[Old_Timer!]

Well the thing is M$ does have time to change the outlook on their online plan, but will they? They already stated that leaders don't react to every little salvo that the enemy lobs at them. But now it seems that they're about to be carpet bombed like President Bush did in Desert Storm, time for M$ to run for cover. Surrender to free online gaming or dieeeee....

[cliffbo]

Well the thing is M$ does have time to change the outlook on their online plan, but will they? They already stated that leaders don't react to every little salvo that the enemy lobs at them. But now it seems that they're about to be carpet bombed like President Bush did in Desert Storm, time for M$ to run for cover. Surrender to free online gaming or dieeeee....

lol thats what i meant when i said the tail is about to wag the dog

[Old_Timer!]

lol I hear you Cliff... hey have you seen the new crowd sim from GDC, it's with fish not the chicken

check out these new demos they are zip files

http://www.watch.impress.co.jp/game/...0331/ps3_2.htm

[cliffbo]

i really think that Nintendo have a good chance of being the challengers this generation. they obvious have progressive online plans like Sony and with a machine thats fundimentally different, who knows. it could be an era of innovation all round.

[Old_Timer!]

Cliff I really don't think Nintendo has done anything new at all, they used a light gun back when they released the original NES, which is just an old version of this new Rev controller. I give them props for getting TurboGraphics games onboard but until I see something really compelling I will hold further judgement

[Loc]

i really think that Nintendo have a good chance of being the challengers this generation. they obvious have progressive online plans like Sony and with a machine thats fundimentally different, who knows. it could be an era of innovation all round.

Not if their garbage Friends Code system is still in use.

[cliffbo]

lets not start bashing the opposition here please. just refresh your thoughts by re-reading the thread intro and start again.

[Loc]

lets not start bashing the opposition here please. just refresh your thoughts by re-reading the thread intro and start again.

Yea I already wrote a mini-editorial on this, it's in the PSP discussion section somewhere. Basically I always had the idea that the online-play could be provided free with the music and movie purchases supporting the costs, w/ additional support from a few in-game ads. I just want the online experience to be very close to Xbox Live. I want to be able to view what games my friends have and seemlessly be able to communicate with them for easy set up of gameplay.

[cliffbo]

a lot of people have been saying that there aren't enough HDTVs out there to justify true HD content, but it seems that at least 33% of Americans want to buy one, which is a healthy number. all Sony, Toshiba, Panasonic etc... have to do is bring out reasonably priced HDTVs then we could well see 1080p games as early as next year. with Blu-ray ready to deliver HD movies and surfing the web about to revolutionise the TV experience, Sony are well placed.

[Hrama]

Man, if everything goes as this patent plans out, it is going to be *very* impressive, but my only fear is that things might end up like last gen, with so many things being worked out on the PS2 that never came to fruition. I do believe that Sony has a much better gameplan this gen, and honestly a lot of these things I think are kind of what the PS2 should have been last gen. As far as Xbox Live is concerned, it is one of the major reasons to buy a 360, but this could be a potential problem if everything works out according to Sony's plan and it is every bit as robust as they are telling us it will be. I see Microsoft having to re-evaluate their initial plan. No matter what MS says about leaders not reacting, in an industry as competetive as this, its the only thing that can keep a company afloat a lot of the time. Hell, when Nintendo didn't adapt to the changing times with the N64 they lost their number 1 game console maker title to Sony and have yet to get it back. (Not hating on Ninty at all, but you have to admit, the N64 and Gamecube could definitely have been better contenders) And yes, I agree Cliffbo, I think that Nintendo may be doing the same thing that Sony did ten years ago and escaping from the norm to make their own path away from the competitors. This will turn out to be very impressive to watch it all play out.

[cliffbo]

More movie download sites go online
US video rental companies Movielink and CinemaNow have begin offering pay-to-own movie downloads from the Sony Pictures Home Entertainment and MGM catalogues. Tomorrow, they will offer the first Sony title to be made simultaneously available in both DVD and download formats.

The first dual-format release is Dirty, followed on 11th April by Fun with Dick and Jane. Today, around 75 titles go on sale as downloads, including Memoirs of a Geisha, Spider-Man 2, Taxi Driver, Barbershop and Hitch. More titles will be added on a regular basis.

http://www.techdigest.tv/

yes its all coming together nicely. obviously Sony is preparing for meltdown. DVD makes sense because of the limited bandwidth at the moment.

[Viper]

Cliff I really don't think Nintendo has done anything new at all, they used a light gun back when they released the original NES, which is just an old version of this new Rev controller. I give them props for getting TurboGraphics games onboard but until I see something really compelling I will hold further judgement

Where do you get that? Rev controller = light gun? You don't read anything on the Rev much do you?

A study by the firm forecasts that gaming downloads for consoles will grow from less than $1 million in 2005 to over $3.8 billion by 2011

Now if only I could get my foot in the door on that growth model.

That would be rather ironic if Sony and N forced the current online leader to completely change their strategy.

[Z]

Where do you get that? Rev controller = light gun? You don't read anything on the Rev much do you?

lol. let me try to give him an example: it is like a virtual arm you use to play the games. was that good?

That would be rather ironic if Sony and N forced the current online leader to completely change their strategy.

if their services work, and I don't see a reason why not, MS will have only two choices:
change their policy or prepare for a serious challenge.

Sony and Ninty have the biggest names in gaming. everyone is dying to play their games online...and for free no less!
don't get me wrong, MS has great 1st party games, but due to their early console gaming life, they don't have nearly as many names, or nearly as popular games as those two. I would have said Sega and Neo-Geo too, but those were melt doen between the two gaming giants.

though MS has a head start, their online worries are far from over.

[cliffbo]

make it feel cool:

PS3 'LIFESTYLE' DETAILS DIVULGED

Further info on some of the PS3's hottish new 'lifestyle server' features dribble out of the US, plus PS3 E3 conf confirmed

14:33 Following yesterday's leakage from US publication PlayStation Magazine on GT 4 Online being playable at E3, some further intriguing info from the mag has come our way today in the form of fresh confirmation on how the PS3 might become something of a 'lifestyle server', as Sony's next-gen machine tackles the brave new world of online.
The PS3 certainly seems to be gearing up to offer more 'lifestyle' type features in the next gen, presumably because Sony will be aiming for similar take up to the PS2, which has sold over 100 million worldwide.

So in keeping with its 'lifestyle' tip, people on your PS3 friends network will be able to access all manner of goodies from your personal machine, including details like any blogs or forums you're running - even if your PS3 isn't switched on.
PSM goes on to give some concrete examples of content which you'll be able to share, like seeing some of your recorded gameplay footage, including achievements and in-game highlights, or perhaps viewing your personal Vlog (video blog) which you'd record on an EyeToy-style camera. Presumably your friends list will contain some decent security settings, so only the fully authorised can have a proper gander because you wouldn't want just anyone being able to rifle through your personal photos and videos.

Still, you'll also be able to send goodies like photos and videos to your PS3 from anywhere in the world, perhaps recording them on your PSP with its new camera add-on, and then uploading them to your PS3 lifestyle server to make your mates green with envy as you relax on a beach in Goa.

Although Sony has hinted at and even mentioned this functionality directly during its various PS3 presentations since last E3, confirmation via PlayStation Magazine means they should be implemented in full for the PS3's launch in November. It also means Sony's PlayStation Network Platform will be going head-to-head in lifestyle terms against Microsoft's Live service, with its marketplace, media sharing, friends functionality and community orientated features.

Expect a drooling world to learn more all on the afternoon of Monday May 8 as, to no great surprise, Sony has just confirmed its annual pre-E3 conference for that date. Although we're keen to hear more on these interesting online lifestyle features, we'll also be holding our breaths for more crucial information like price, launch line-up and what's going to replace that boomerang controller. As always CVG will be on hand to bring you the very latest.