While Sony has been running the PlayStation Plus (PS+) subscription service since June 2010, it has become a lot more interesting during 2012: first, we saw the introduction of the ”instant game collection” for PS3, and this week saw the addition (at no extra cost) of PlayStation Vita games (and online save backup).
Effectively, Sony is turning PS+ into a high-value subscription service to exploit an extensive back catalogue of game titles by distributing them electronically at virtually no cost. This has advantages, such as a predictable revenue stream and the generation of usage data. Obviously, the downsides are that revenue from traditional sales of a game title are lost, and the rate of remuneration for third-party publishers including games has to be carefully balanced. It contrasts with Microsoft’s Xbox Live Gold service — which is basically a souped-up version of the free Xbox Live service — Sony has always given more away for free in its network
In what promises to be a tough Q4 for all videogame markets, Sony’s move could significantly boost its hardware sales and PS+ subscriptions. In terms of consumers, it’s clear that this announcement affects three key groups:
- Existing PlayStation 3 (PS3) and Vita owners without PS+ subscriptions. This group is probably the least affected; these early adopters probably have most titles included in PS+ for the PS3 and Vita. They may be potentially slightly miffed that so many games for which they paid full price are being given away. They are unlikely to sign up for PS+ in the near term, but they could be a medium-term opportunity if Sony adds newer titles and other benefits.
- PS3 PS+ subscribers without a Vita. This is the most obvious target group; effectively, Sony has cut $80 off of the cost of a Vita by bundling two of the best-known first-party titles — Uncharted: Golden Abyss and Gravity Rush. While (unlike Sony) we don’t have subscriber device profiles for PS+ users, I’d guess that 80% or so still haven’t invested in a Vita, though some of these gamers will also have legacy PSP digital downloads in their account. Conservatively, this offer could convert 10% to 20% of these owners into Vita owners in the next three to six months — especially as the third-party AAA Vita titles start to arrive at the same time.
- New consumers. The Vita addition makes an all-in PS3/Vita/PS+ bundle much more attractive, but it will still be a significant outlay for those who have resisted investing in the Sony ecosystem for 5+ years. While there may be some upside here, it will be fairly limited.
What else could Sony do? A couple of things may help even more:
- Discount coupons for larger-format memory cards. The price of memory cards for the Vita is still one of the most common complaints in user forums. Any mechanism that allows PS+ subscribers to get a 10% to 15% discount voucher for memory cards would help here. Making this a limited-time offer may also spur the buying decision. This could even tap into the first group mentioned above and help them justify the PS+ sign-up; they could save 6GBP on a 32 Gb card and still get the one or two games they haven’t already bought for the Vita. Of course, this opens up a world of hurt in terms of dealing with merchants and making sure that discount codes aren’t reused, but it could potentially boost hardware and PS+ adoption in the short term.
- Get those physical PSP games onto the Vita. The obvious benefit that would also play to our first group is a version the “disk à digital” program (similar to the UMD passport program launched in Japan when the Vita came out) for UMD-based PSP titles: let new PS+ subscribers pick two or three of their legacy PSP games for conversion to a Vita digital copy. Again, there is probably quite a lot of work here in terms of authentication, validating the title list, etc., but if many of these titles are already available in the store, there is little downside. This could also strengthen the case for buying a Vita for our second group as well, but to be fair, the case is already pretty strong for them.
- Offer discounted DLC for Assassin’s Creed and Black Ops via PS+ as soon as possible for both the PS3 and Vita. Looking beyond the groups mentioned above, aggressively priced hardware bundles and the new AAA third-party titles should sell some additional Vita hardware to the more casual FPS gamer, even if they’re reviewing badly, such as Black Ops on Vita. Assuming many of those buyers have a PS3 but don’t have PS+, adding discounted DLC to PS+ could push them over the edge to subscribing — particularly as those titles are unlikely to be included in the subscription any time soon.
- Market the “great value” PlayStation message. There seems to be a definite anti-Sony feeling this holiday season: the Wii U is offering new hardware; Xbox is becoming (seemingly) the other major supported format, particularly at supermarkets / non-dedicated retail; while there’s criticism directed at Sony that the new PS3 design didn’t come with a price cut and the Vita is too expensive. Without getting into negative messaging, the value of PS+ (even with just a PS3) is probably Sony’s trump card. Spinning this with a message of “But wait! There’s more! Free quality Vita games!” could at the very least drive PS+ sign-up and probably get that Vita PS+ message out there.
The 2012 holiday season will be the final push for Xbox 360 and PlayStation 3 before new consoles are released next year. Given how radically the gaming landscape has changed over the past two years, it will be interesting to see how successful these final quarters are. It’s even more critical that the Vita makes an impression after a lacklustre launch and increasing competition from smartphones and tablets.