Jim Ryan: subscription models like GamePass are not sustainable

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SolidGame_basic

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#1  Edited By SolidGame_basic
Member since 2003 • 27685 Posts

Ryan told GamesIndustry.biz that PlayStation does not plan to follow Xbox's approach with a similar offering. Xbox Game Studios games currently release into Xbox Game Pass the day they launch at retailers.

"For us, having a catalogue of games is not something that defines a platform. Our pitch, as you've heard, is 'new games, great games.' We have had this conversation before -- we are not going to go down the road of putting new releases titles into a subscription model. These games cost many millions of dollars, well over $100 million, to develop. We just don't see that as sustainable."

https://www.androidcentral.com/sonys-jim-ryan-says-ps5-will-not-put-100-million-games-subscription-services-referring-microsofts

What do you think, SW? Can GamePass last long term? Will they have to raise the price or have different levels of service? For $14.99 a month, GamePass ultimate is already pricy. That's $180 a year. With MS adding more games to it, I'm not sure how profitable it will be. Let me know your thoughts!

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SecretPolice

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#2 SecretPolice
Member since 2007 • 36915 Posts

He's wrong. :P

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sts106mat

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#3 sts106mat
Member since 2005 • 25004 Posts

who the hell is Ryan?

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Archangel3371

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#4 Archangel3371
Member since 2004 • 32254 Posts

Sounds like Jim Ryan is in panic mode. 😅

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JasonOfA36

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#5 JasonOfA36
Member since 2016 • 2378 Posts

180 bucks a year is just 3 games. It's good for the consumers. For MS tho, I dunno. I don't think they make huge money out of it, but it's probably big enough since MS is still on board with it.

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sirk1264

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#6 sirk1264
Member since 2003 • 6174 Posts

Tell that to netflix, Spotify, Apple Music, YouTube music, amazon prime video, and so on. These services seem to be doing fine with subscription models. Why can’t one for gaming survive as well. Hell playstation now is still around and it’s been available for a long time.

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Random_Matt

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#7 Random_Matt
Member since 2013 • 5609 Posts

Hence GS will be quantity over quality. It will not pay for $100 million dollar game budgets, whoever thinks otherwise are pretty dumb.

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Telekill

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#8 Telekill
Member since 2003 • 9821 Posts

I understand where he's coming from. The number of people subscribed would have to be astronomical to break even.

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rmpumper

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#9 rmpumper
Member since 2016 • 1165 Posts

@Random_Matt said:

Hence GS will be quantity over quality. It will not pay for $100 million dollar game budgets, whoever thinks otherwise are pretty dumb.

So MS just made a deal to buy Zenimax for 7.5billion just to make shitty games?

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Star67

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#10 Star67
Member since 2005 • 4783 Posts

@Random_Matt said:

Hence GS will be quantity over quality. It will not pay for $100 million dollar game budgets, whoever thinks otherwise are pretty dumb.

Yes and No.

Until GamePass has something like 50 million plus subscribers across Xbox and PC I don't think it's going to be sustainable for Big AAA games that just came out. As it stands right now, big AAA games would lose money on GamePass.

Which makes me afraid GamePass is going to be filled with small garbage indie game filler or half baked AAA releases that will be "Updated" over time

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madrocketeer

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#11 madrocketeer
Member since 2005 • 7645 Posts

We'll see, but Microsoft are doing everything they can to make it work. The key to the subscription model is scaling; i.e. getting as many people to sign up as quickly as possible. In an effort to build up this scaling, Microsoft are launching a budget console and decoupling the software platform from the hardware through xCloud and releasing games on PC.

Time will tell if their efforts will work.

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madsnakehhh

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#12 madsnakehhh
Member since 2007 • 16931 Posts

@Star67 said:
@Random_Matt said:

Hence GS will be quantity over quality. It will not pay for $100 million dollar game budgets, whoever thinks otherwise are pretty dumb.

Yes and No.

Until GamePass has something like 50 million plus subscribers across Xbox and PC I don't think it's going to be sustainable for Big AAA games that just came out. As it stands right now, big AAA games would lose money on GamePass.

Which makes me afraid GamePass is going to be filled with small garbage indie game filler or half baked AAA releases that will be "Updated" over time

Exactly what i'm thinking ... Yeah for gamers it's good value, but i don't know how big companies feel about losing day 1 revenue by having their games on gamepass ...

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PC_Rocks

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#13 PC_Rocks
Member since 2018 • 4441 Posts

Translation: Sony is too poor for such kind of investment.

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ProtossRushX

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#14 ProtossRushX
Member since 2007 • 7895 Posts

He's right a lot of people with gamepass had Xbox Live and just bought 3 years of gamepass ultimate for 3 dollars.

3 dollars doesn't cover Starfield or Elder Scrolls 6 budget. This is not sustainable long term people are getting games for 3 years now and they only paid in 3 bux.

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Antwan3K

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#15 Antwan3K
Member since 2005 • 4799 Posts

Looks like Game Pass just passed 15 million subscribers..

Game Pass!

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sleepnsurf

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#16 sleepnsurf
Member since 2009 • 3551 Posts

Boy... Most of you never took marketing classes did ya? I'm betting half of the cows on here ARENT from the USA.

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Sancho_Panzer

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#17 Sancho_Panzer
Member since 2015 • 1426 Posts

Subscription TV services which actually fund new content have obliterated the competition. I can't see why it wouldn't be the same for games subscriptions. If anything, It's the PS Now model which looks more likely to go the way of Blockbuster.

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2Chalupas

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#18 2Chalupas
Member since 2009 • 7203 Posts

@sirk1264 said:

Tell that to netflix, Spotify, Apple Music, YouTube music, amazon prime video, and so on. These services seem to be doing fine with subscription models. Why can’t one for gaming survive as well. Hell playstation now is still around and it’s been available for a long time.

Music really isn't comparable, since it costs them very little to add to music catalogs and more people listen to music via streaming. There is a critical mass being reached, and that was reached quite easily once music shifted to streaming.

Netflix is more comparable, because alot of people thought the Netflix model wouldn't work. First, because of the atronomical prices they were paying to license premium content. That actually wasn't sustainable, which was why they started developing their own original content. People had their doubts about the sustainability of the model, but Netflix was able to reach a critical mass of subscribers to make it work (their math still isn't great on profitability though, their stock success has been more the brand - they are like the Reynold's Wrap of streaming services).

Gaming seems to me it will be hardest to make work, because the critical mass isn't really there to fund AAA games via low priced monthly subscriptions. You can do it with indie games, and they've sort of been doing that for awhile with Games for Gold and Playstation Plus throwing out games as a carrot to stick with their subscriptions, but is it enough to cover the costs of continued AAA development? That isn't clear. The business models for games are a already mess, with DLC, microtransactions, etc. muddying things.

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Pedro

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#19 Pedro
Member since 2002 • 43457 Posts

With MS latest acquisition Gamepass is going to shake things up a lot.

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ProtossRushX

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#20  Edited By ProtossRushX
Member since 2007 • 7895 Posts

The One dollar deal is on the console dashboard. That is not sustainable an casuals are seeings its only dollar on the dash.

People are acting like only hardcore gamers got the $1 deal for 3 years.

This service is inflated by $1 users right we don't know how it measures up to PS Now which costs way more than that.

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sirk1264

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#21 sirk1264
Member since 2003 • 6174 Posts

@2Chalupas: there was still uncertainty with music when streaming was beginning. People thought it wouldn’t be sustainable either. There’s risks with everything. Microsoft just made their console that more attractive with this acquisition. They seem to be all in on game pass as well. They have the money to throw at it. Time will tell if they are successful.

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regnaston

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#22 regnaston
Member since 2008 • 1274 Posts

This reminds me of the VHS/Betamax debate back in the day :D

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Pedro

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#23  Edited By Pedro
Member since 2002 • 43457 Posts

@ProtossRushX said:

The One dollar deal is on the console dashboard. That is not sustainable an casuals are seeings its only dollar on the dash.

People are acting like only hardcore gamers got the $1 deal for 3 years.

This service is inflated by $1 users right we don't know how it measures up to PS Now which costs way more than that.

You reading the acquisition news.
You reading the acquisition news.

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jcafcwbb

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#24 jcafcwbb
Member since 2015 • 218 Posts

The big question to answer will how will this affect game studios.

On of the biggest gripes about Spotify is that subscription money goes to the bigger artists and the smaller artists and labels get very little. There have been hold outs on streaming sites and Taylor Swift took off all her material until she got the deal she wanted.

It is my fear that the indie game developers will suffer from Gamepass in a negative way.

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Pedro

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#25 Pedro
Member since 2002 • 43457 Posts

@jcafcwbb said:

The big question to answer will how will this affect game studios.

On of the biggest gripes about Spotify is that subscription money goes to the bigger artists and the smaller artists and labels get very little. There have been hold outs on streaming sites and Taylor Swift took off all her material until she got the deal she wanted.

It is my fear that the indie game developers will suffer from Gamepass in a negative way.

Gaming is different from music. In music there are various artists working more or less independently on independent projects. Games are a team effort and works towards one product.

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Bluestars

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#26 Bluestars
Member since 2019 • 1803 Posts

this jim ryan fellow seem like 10 stone of shit squeezed into a 5p carrier bag..which makes hanging on his every word even worse

hah

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PC_Rocks

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#27 PC_Rocks
Member since 2018 • 4441 Posts

@2Chalupas said:
@sirk1264 said:

Tell that to netflix, Spotify, Apple Music, YouTube music, amazon prime video, and so on. These services seem to be doing fine with subscription models. Why can’t one for gaming survive as well. Hell playstation now is still around and it’s been available for a long time.

Music really isn't comparable, since it costs them very little to add to music catalogs and more people listen to music via streaming. There is a critical mass being reached, and that was reached quite easily once music shifted to streaming.

Netflix is more comparable, because alot of people thought the Netflix model wouldn't work. First, because of the atronomical prices they were paying to license premium content. That actually wasn't sustainable, which was why they started developing their own original content. People had their doubts about the sustainability of the model, but Netflix was able to reach a critical mass of subscribers to make it work (their math still isn't great on profitability though, their stock success has been more the brand - they are like the Reynold's Wrap of streaming services).

Gaming seems to me it will be hardest to make work, because the critical mass isn't really there to fund AAA games via low priced monthly subscriptions. You can do it with indie games, and they've sort of been doing that for awhile with Games for Gold and Playstation Plus throwing out games as a carrot to stick with their subscriptions, but is it enough to cover the costs of continued AAA development? That isn't clear. The business models for games are a already mess, with DLC, microtransactions, etc. muddying things.

Actually games subscription is the easiest to make it work, at least in theory. Music, movies and shows don't have recurring revenue model like that of MTs in games. You need just one or two big name games with such a model and it will print money for you. As shitty as it is, I'm sure that's the idea behind it.

@jcafcwbb said:

The big question to answer will how will this affect game studios.

On of the biggest gripes about Spotify is that subscription money goes to the bigger artists and the smaller artists and labels get very little. There have been hold outs on streaming sites and Taylor Swift took off all her material until she got the deal she wanted.

It is my fear that the indie game developers will suffer from Gamepass in a negative way.

For sure this is going to happen.

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jcafcwbb

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#28 jcafcwbb
Member since 2015 • 218 Posts

@Pedro said:
@jcafcwbb said:

The big question to answer will how will this affect game studios.

On of the biggest gripes about Spotify is that subscription money goes to the bigger artists and the smaller artists and labels get very little. There have been hold outs on streaming sites and Taylor Swift took off all her material until she got the deal she wanted.

It is my fear that the indie game developers will suffer from Gamepass in a negative way.

Gaming is different from music. In music there are various artists working more or less independently on independent projects. Games are a team effort and works towards one product.

But how will your subscription money be divided up.

One criticism of Spotify is that all the money gets pooled and then divided up on percentage of overall plays. But that doesn't take into the fact the some users will listen to specific tracks endlessly.

For example I never have streamed a Taylor Swift track but some of my monthly subs will get used to give her royalties. Whereas artists I have streamed would not get a fair share of my subscription.

With sales the company will get a fair return from the units they sell - how does Gamepass/PS Now work? Would EA for example, expect a higher chunk of your subs than the makers of Dead Cells - even if you only play those two games in a month? If it is run like Spotify they would.

I fear, like Spotify, the consumers will profit and the bigger studios will but the smaller ones will not. I could be wrong.

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Gatygun

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#29 Gatygun
Member since 2010 • 2109 Posts

Yea 80 euro PS5 games are the future guys and is sustainable.

What a joke.

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Pedro

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#30 Pedro
Member since 2002 • 43457 Posts

@jcafcwbb: Its not the same. A closer model would be Netflix and Disney +. Studios owned by MS are not same as musicians.The studios will continue to function more less the same and will have a budget based on the game.

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Ross_the_Boss6

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#31  Edited By Ross_the_Boss6
Member since 2009 • 4014 Posts

As I recall he also knocked the idea of having a lower spec console (Series S) this week.

Both of these strategies have never been tried by PlayStation, so I don’t think he has any leg to stand on here. Sounds like he’s worried.

We’ve already seen subscription models work in other media, and Gamepass is a great deal.

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jcafcwbb

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#32 jcafcwbb
Member since 2015 • 218 Posts

@Pedro said:

@jcafcwbb: Its not the same. A closer model would be Netflix and Disney +. Studios owned by MS are not same as musicians.The studios will continue to function more less the same and will have a budget based on the game.

What about the studios not owned by MIcrosoft who are on Gamepass? How will they be paid a fair share of the revenue which would be equivalent to what they could earn selling the copies the old fashioned way?

How will their base revenue be affected by people not buying copies and waiting for it come to Gamepass? And if they do not go on Gamepass will gamers still buy their games? Maybe some hardcore gamers but others will stick to what they get on Gamepass.

It is a good deal for the consumers but let's not pretend it will be good for every studio - especially the ones not owned by Microsoft.

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Pedro

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#33 Pedro
Member since 2002 • 43457 Posts

I don't know the arrangements MS has with studios on Gamepass so I am not sure what was the point to your question. Gamepass is entirely up to the developer and the arrangements is something they agreed to.

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lamprey263

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#34 lamprey263
Member since 2006 • 37462 Posts

Maybe he's right, but question is, who will hit their breaking point first?

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sheep99

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#35 sheep99
Member since 2020 • 318 Posts

@SolidGame_basic: basically you need about 50-100 million subscribers to to be able to sustain that kind of model

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shellcase86

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#36 shellcase86
Member since 2012 • 5152 Posts

He's right. It's not sustainable up until a certain point. Spotify for example, is the world's largest music streamer, and they're usually not even profitable.

What Microsoft doing is trying to build a base with GS, and it's smart. But they will be raising prices. Probably, sooner than later.

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Martin_G_N

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#37 Martin_G_N
Member since 2006 • 2056 Posts

The quality of games will go down. I would think if they mainstream how games are made, make the tools easy, get all developers in the world under one subscription forcing millions of users to join it, then it can be possible. Otherwise I think it's going to be hard to earn money.

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hardwenzen

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#38 hardwenzen
Member since 2005 • 3969 Posts

He is kinda butthurt. Weaker system, not being able to match gamepass and now Bethesda is on the green side. He is mad.

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#39  Edited By kuu2
Member since 2005 • 11429 Posts

@ProtossRushX said:

The One dollar deal is on the console dashboard. That is not sustainable an casuals are seeings its only dollar on the dash.

People are acting like only hardcore gamers got the $1 deal for 3 years.

This service is inflated by $1 users right we don't know how it measures up to PS Now which costs way more than that.

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HalcyonScarlet

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#40 HalcyonScarlet
Member since 2011 • 8908 Posts

LOL, that's quite a come back.

MS: "we're buying Zenimax"

Sony: "YEAH WELL... Gamepass is poopy head!".

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Phlop_Spencer

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#41 Phlop_Spencer
Member since 2020 • 794 Posts

He's right though. Gamepass currently does not turn MS a profit. It's an investment they made to hopefully one day make money off of. How long until their model breaks even?

napkin math - 15 million subs at say $10/month = 1.8 bill rev per year

assuming the number of subs stays the same for the next few years, it will take over 4 years alone for GP to break even from TODAY's 7.5bil acquisition. Fact is, right now GP is a money loser and with today's big purchase even more so. The question is, will this model one day become profitable for MS? If so, how long until it is projected to do so? What if it doesn't? Only time will tell, but at the end of the day it is great for consumers.

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Starshine_M2A2

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#42 Starshine_M2A2
Member since 2006 • 5311 Posts

Jim who? Play what?

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briguyb13

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#43 briguyb13  Online
Member since 2007 • 4828 Posts

@sts106mat said:

who the hell is Ryan?

Nobody special.

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NathanDrakeSwag

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#44 NathanDrakeSwag
Member since 2013 • 13974 Posts
@Pedro said:
@ProtossRushX said:

The One dollar deal is on the console dashboard. That is not sustainable an casuals are seeings its only dollar on the dash.

People are acting like only hardcore gamers got the $1 deal for 3 years.

This service is inflated by $1 users right we don't know how it measures up to PS Now which costs way more than that.

You reading the acquisition news.
You reading the acquisition news.

What happened to you hating exclusives? Such a pathetic hypocrite.

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Pedro

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#45 Pedro
Member since 2002 • 43457 Posts

@NathanDrakeSwag said:

What happened to you hating exclusives? Such a pathetic hypocrite.

I am so pleased that my taunts are really upsetting you fools. Like I told another one of your delicate ones, I have stated that I am not a fan of this move but that doesn't stop me from making fun of you losers.

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NathanDrakeSwag

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#46 NathanDrakeSwag
Member since 2013 • 13974 Posts
@Pedro said:
@NathanDrakeSwag said:

What happened to you hating exclusives? Such a pathetic hypocrite.

I am so pleased that my taunts are really upsetting you fools. Like I told another one of your delicate ones, I have stated that I am not a fan of this move but that doesn't stop me from making fun of you losers.

Cows live rent free in your pea brain. It's amusing to see.

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Pedro

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#47 Pedro
Member since 2002 • 43457 Posts

@NathanDrakeSwag said:

Cows live rent free in your pea brain. It's amusing to see.

Nope! I live rent free in you ALL minds.

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onesiphorus

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#48 onesiphorus
Member since 2014 • 3602 Posts

@sts106mat said:

Who the h*** is Ryan?

Why not read the GamesIndustry.biz article to find out who he is?

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BlackShirt20

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#49  Edited By BlackShirt20
Member since 2005 • 2151 Posts

LOL Sony Ponies are freaking out. The panic among cows right now, is legendary.

When Netflix started a digital streaming service, Blockbuster said the same thing. That it’s not sustainable. One of those companies went out of business.

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JoshRMeyer

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#50 JoshRMeyer
Member since 2015 • 11141 Posts

They'll probably do what Netflix did and have different resolution prices... 720p for $10, 1080p for $15, 4k for $20 or something like that. I'm kidding, but it wouldn't surprise me if they had different tiers in the future.