PlayStation Network snags 20M users, Xbox Live still way more profitable
By Ross Miller 
posted Feb 26th 2009 6:06PM
posted Feb 26th 2009 6:06PM
However, more interesting to us is a note about the service generating $180 million life to date in revenue. It's a stark contrast to Xbox Live's reported $1 billion revenue since its 2002 launch, as of E3 2009. Based on figures from leaked to Seattle P-I this week, which said XBL had 10 million subscribers worldwide and a 56 percent Gold subscriptions rate in February 2008, we can do some fuzzy math. Assuming those Gold members paid the $50 annual subscription -- or $4.16 monthly, the cheapest per month option -- that amounts to $23.3 million for the month, not accounting for discounts or free Gold trials. Presuming no subscription growth for sake of argument -- we know it's growing -- that's $280 million annually, well over PSN's life to date revenues. Say what you will about mean ol' Microsoft charging for online play, the numbers seem to go in its favor.
[Via Joystiq]
Read - Leaked XBL data
Read - Comparing XBL vs. PSN
Read - Sony press release
Crash and BURN Sony, you evil bastards!
well we can all agree on the fact
that we wont see a free full featured xbox live for a LONG time =\
Sony is the evil one? Wait, who's the one that's letting us play online for free and not milking use $50-$60 a year to simply play our games online? Not Microsoft
But But teh xbox live is better!!!!
xboxlive is marginally better and at the end of the day, you still have to pay to play you video games on your game console online where with sony it comes right out of the box. Plus the features that make live supposedly better, actually come for free, so the only thing you are paying for is to play online :P
correct me if im wrong... but:
In 7 years, XBlive reported $1 Billion in revenue since 2002
In 2 years, PSN reported $180 Million in revenue since 2007
so if you do the math... in its 7th year PSN will be at atleast $1.08 Billion?
So how is MS doing better?
Is my math wrong? Has PSN been here longer or something?
@NineT9:
If you lack basic reading and comprehension skills, then yeah, you would probably figure that PSN is more profitable than Xbox Live. Tthe author of this article just wrote how XBL makes ~$280mil per year in subscription fees alone, which almost doubles PSN's life-to-date total. I'm sure XBL was much less profitable in the first couple years... I wouldn't doubt if XBL made $500 million in the last year or so alone (DLC, movies, tv shows, etc.).
@ john: And if you have used both services with any amount of regularity, you'd know that "marginally" doesn't even come into the picture. Xbox LIVE is a far superior service to PSN. Yeah, it costs $50/yr but it's seamlessly integrated.
The ONLY thing that I like about PSN is that even though it's free, its voice chat isn't as muddy as Xbox (tested multiple times with the same people).
Beyond that, LIVE all the way.
So because Microsoft charges you for xbox live, Microsoft is better? (revenue)
People keep saying this about XBL being more 'integrated' than PSN, but I don't see it. I really don't.
How is it more integrated than PSN in any meaningful way? In fact, with Home and game launching, you could argue the PSN is more integrated.
Really engadget? A paid service more profitable than a free service?
You guys wouldn't happen to be the ones that put that report of a ps3 w/o blu-ray coming soon? Got any stock picks too?
Yea, this is such a stupid point...
Guess what, iTunes have gained more profit than torrents. -_-"
DUH
*has
That is exactly what i was thinking. I am very dissapointed in engadget for posting such an obvious article. FREE vs. PAID do the math
Ehh, to be fair, these articles are just regurgitations of other articles or quotes or whatever. At the same time, sometimes they do further add to an incorrect or unfair item that the public latches onto. Like this, for example. Comparing the revenue that XBL brings in vs PSN is like comparing apples and oranges. Over at Joystiq, readers and fanboys were all furiously calculating their own versions of how much of that revenue was from XBL gold subscriptions... it's pointless, but it does make it seem to the public like XBL is just something else Mircrosoft is doing better.
Exactly. It's a ridiculous point to say XBL makes more money than PSN. With PSN, the goal isn't to make as much money as you possibly can.
The PSN started off behind - XBL had already been running for years on the original Xbox, whilst Sony couldn't realistically add it to the PS2 with any more system integration than it had. They're running it now to build up the userbase and infrastructure. The best way of doing that is to make it free, but you'll sacrifice money in the short-term.
You're missing half the point here. The idea led by the article is that PSN has twice the number of registered users than XBL and yet it's still earning.
And don't give me this crap about PSN being free. If it's earning $180M then somewhere, somehow, it still charges you for the services.
... still earning less*.
"And don't give me this crap about PSN being free. If it's earning $180M then somewhere, somehow, it still charges you for the services."
Oh, I will give you crap. PSN is free. I have spent exactly zero dollars (that's zero with a 0) using the PSN. My Burnout Paradise has been heavily upgraded using my (free) PSN account.
Since getting my PS3, I have spent a total of about $25 for three downloadable games. That may be the source of the $180M figure. But I do not pay for PSN.
As a sidenote, I felt bad for MS falling behind and just signed up for a free Silver account. Not sure what I'm going to do with it considering I don't own an Xbox, but what the hey! That tightens the race up a bit.
For a "Free" service, Sony is making Bank off of me. I buy new online games every week for my PS3, since they are always gorgeous and innovative titles. I've spent several hundred dollars on downloadable games alone for my PS3. I can't say as I've even bought half as many for my 360. PAIN beats %95 of all 360 downloadable games, hands down.
And as far as integration, the only things I need are voice chat and friend support. The reason these features on both the PS3 and 360 are lost on me. Achievements, trophies, video chat, instant message, avatars, blah... All filler. Never use them.
20M including millions of only-forum users. Xbox Live's users are all actual silver and gold users who happen to all use Xbox Live.
Not true I can got to the xbox website and make new silver accounts all day and not own an xbox.
If you look at it another way, there are *almost* 20 million people that can play online with the Playstation, only the paying customers get to do so with Xbox Live, which is a little more then half of the people playing are Gold, the rest are plain old Silver- who can't play online.
@Temple
But according to the article, I belong in the category of "...anyone who wishes to use the official PS forums, whether or not they own one of the aforementioned consoles". So, I am part of the PlayStation Network but have no ability to play online.
Well, let's assume 50% of all PSN users are forum-only users. There are still 10 million users left who can use PSN for free. That's way more than the XBL gold users... And I doubt there are 50% forum-only users, so 10 million is probably a conservative estimate... also don't forget that PSN was launched 4 years after XBL.
and i would say it's quite successful to generate $180 million in revenue without subscriptions...
That is a remarkably shitty image.
Seriously, that looks like it is a blown up image of a pool game from my pos nokia phone.
It is creative but the quality is shit.
Somebody's missing some colours..
Yeah, bad MS Paint, not Photoshop definably.
The shitty image fits well with the shitty post.
Some members of sony's forums also count as members (which includes me probably).
LOL @ Sony for counting people who may only be PS forum members.
XBox Live means you have to PAY just for the privilege of paying to do download anything or play game online that you already own. PSN is free which would you want.
You can buy things from the Marketplace as a Silver member...
@sora yeah you just have to wait a week longer.
bry2an
Only for free content.
@ Hafk
Well that isn't really much better that you have to pay to access free content a week earlier. I know with the xbox there is no other choice that is why it works.
If you can live without online multiplayer, I am pretty sure you can wait a week for free DLC. Most people with silver accounts are too busy to spend a bunch of time gaming online anyway.
How did this story become a positive story on XBOX LIVE. You just figured out Microsoft is making 280 Million a year from subscription fees to play online while Sony is giving this away for free and they have 20 million people doing this. Yeah Sony really should be screwing over their customers as well if they want to make more money. That is just crazy. Also comparing totals of a service that has been around since 2002 to a service that started in 2006 is not very equal. I understand Live is older.
But why does this article have to become a positive story for Microsoft instead of the news that Sony has 20 million PSN accounts.
Because PSN and XBL are competing with eachother for users and Sony's figures are largely meaningless because having an account is absolutely no indication you'll use it, as you can create one just to use for the Sony forums. From my own experience, it's quite possible there's a large amount of just plain dead accounts - every roommate or friend that has spent more than a couple hours on my PS3 has created a PSN account and since only one of them has a PS3 of their own I somehow doubt that those accounts are getting much use. XBL however costs money so it's unlikely there are millions of 'idling' accounts out there.
@John
Well I have many friends over that make accounts on my XBOX and don't own one. So not much can be said about that. I think you make a large assumption that most xbox live users are xbox owners. I mean I have said this before the silver acount is free and you don't need to own an xbox to make one.
I agree they are both numbers but how does this story of 20 million PSN accounts = Live is more profitable.
I'm trying to figure this one out myself... as a gamer, this shows PSN as a better service by not gouging their customers for something that's been free on the PC for years... as a shareholder (which I'm not) it's only beneficial for MS.
MS is not making that much, I work IT at an enterprise in the US, you will not believe the costs that go into running such a network...just to give you an idea a 14 TB storage server is $100,000 a compute server goes for $10,000+ depending on the configuration, MS made the right choice charging a small fee per year ($50 a year is extremely insignificant), it gives them the ability to expand their infrastructure and add more servers, to keep up with demand it will also help them future proof their system, Sony will most likely eventually charge a few someday and for some of their games they already have started this trend. Also I've been a PC gamer for along time and I hate when I see people say it free for PC users to play online. This maybe true for some but PC gaming servers would not exist if gaming communities didn't fork over money every month to pay for server hosting, which cost around a $100 a month. Also you can get a 13 Month card to XBL on amazon for around $30 to $40.
They're Microsoft. They expand their infrastructure when a butterfly flaps its wings in Australia.
@Shaun
Well with Live you are not paying for dedicated servers your paying for the right to play p2p online. Big Difference. Maybe just maybe when you buy a game you are paying for the software to play online.
Microsoft make $1Bn in profit (not revenue -- profit) every month. I don't think they care.
@bryan
That,s partially true, if all games were peer to peer you would see alot of lag because most people don't know how to put port forwarding on, if you go read a lot of the articles that are up on the net the developers have the choice weather or not to make it peer-peer or client-server. GOW most likely is peer-peer because I can't have people join games I start most of the time because I'm behind my colleges Firewall and they shape traffic, however I have no trouble with GTA4 which has to be server based because theirs no way my xbox would be able to handle tracking 15 other players while processing the actual game play with only 512MB of RAM. Also if you read PSN does the same thing, SOCOM for instance is server based were as many of the racing games are client hosted(p2p).
Your wrong its the other way around PSN is peer-peer and XBL is client based...check out this article by gamespot.
http://www.gamespot.com/users/Some_One_Plays/show_blog_entry.php?topic_id=m-100-25341542&print=1
hence why you pay for service for XBL, and why MS keeps building new data centers.
Sorry please ignore my last post I jumped the gun with that one...it turns out that I was actually right in my replay before hand its up to the developer and both networks, XBL and PSN, utilize both server and peer-peer based networks.
Live is peer to peer, PSN is server based. Sorry
you would think after charging everyone $50 for xbox live, they would make things like themes and gamerpics free. i would love to see sales numbers on those things by the way. it would give an accurate reading on the percentage of dumb idiots that are on xbl.
It's probably the same number as the people who use the free PSN to log onto Playstation Home and pay for clothes, houses and furniture.
No shit the numbers go in the XBox's favour. It was in a next-gen market of one for an entire fiscal year prior to there even being a Playstation 3.
Wow this is the dumbest engadget post i think theyve ever put out. headline should basically read "free service generates less profit than paid service"..
I honestly think this is good news for Sony, generating $180 million WITHOUT membership fees. That combines only games and videos (and the occasional theme).. thats a pretty hefty number for a service that only launched 3 years ago. XBOX live is more than 7 years old (for you idiots out there that more than twice as long as the PSN). Considering the time gap, sony has made extreme gains in the market that beats live's pace. Im not saying PSN will ever pass Xbox live, but i think the gap between the two will close in coming years.
Writing an entire paragraph to explain why xbox live is more PROFITABLE than psn without sony making comparisons in the story, really?
as a PS3 user, i like my free online gaming and can't imagine paying a subscription, even if it is annual. most of the features people pay for should be part of the experience and not extra.
A service with membership fee more profitable than a free one? This forces me to rethink everything I thought I knew about economics!!
I know this comment is kind of redundant, but so was the observation to which it refers, so it all balances out.
even when you calculate the membership charge the profit rate is still much higher, do the math
Wait! No one is going to question this remark: "even when you calculate the membership charge the profit rate is still much higher, do the math"??
Are you saying, if you subtract the $ paid to MS for the actual accounts, MS is making more money per subscriber?
That's amazing! I assume you have an xbox, I assume you like your xbox, and I assume you have some religious-like zealotry in favor of you x-box. So xbox is better because they are making more money on a 'per user' basis?
x-box's and ps3's networks offer 'similar' options. I DO NOT want to bait people into crap like "OH! well on xbox live you can change your background to green AND red" or anything like that. Simply: SIMILAR products are available on each network.
Take out the membership fees (that sony doesn't charge) and MS is still screwing you by charging MORE for the things that both charge for. This is your argument for x-box being better, they get more money out of you more ways? I mean, do the math! :)
As for MS being more successful, yes that appears to be the case. Keep in mind that mormanism is A LOT more successful in Utah that christianity and we all know how crazy those mormans are.
Best,
-K
Well, I have 6 accounts on Xbox Live and only 1 of them is used. One of them is my main one which is being used right now, another is for the Japan Marketplace so I can download demos like Ninja blade, and the rest were created because every time you create an XBL account you get a free month of Xbox Live. On top of that you can make one to use the forums on Xbox.com.
I'm afraid this is another reason why Xbox dominating/ owning ps3. I own both systems but my ps3 just collects dust!!!100% better online play the secret is in the headset
Can you please let us know the secret or at least explain why it is 100% better in your opinion. No....no you cant? oh I thought so. Fanboyism through and through.
NICE
ok since i actually have both xbox live on my 360 and PSN on my PS3, i cant definitively say that xbox live is well worth the per-year subscription fee. PSN lacks just about every standard feature that one would come to expect after using XBL. want to join your friend's game regardless of the game you are playing, no sir, that functionality is dependent upon the game itself. how about a game of COD4 actually starting without at least 2 lost server connections? forget it. XBL is worth the money 3x over.
I have all three. This is what their multiplayer abilities mean to me:
Wii: Great multiplayer when all players are in the same room. Horrendous multiplayer when players are in different locations.
Xbox: Decent multiplayer when all players are in the same room. Great multiplayer when players are in different locations. Excellent low level design allows friends to chat while playing different games (or watching videos or listening to music). You can invite a friend to play the game you're playing even when they're doing something else. The free headset means everyone can talk to each other right from the get-go.
PS3: Decent multiplayer when all players are in the same room. Bad multiplayer when players are in different locations. The game-centric implementation makes it difficult to find and play with friends. Vendor-centric servers means iffy server support (dropped connection issues and rubber banding far more prevalent). Requiring buy-in on a headset means most games are silent, even if you were playing with a friend, you feel very much alone.
If online multiplayer is important to you, it is well worth less than $5/month to have a Gold membership on XBL. The experience is far more gratifying in the number of rooms open, the server reliability, and most importantly, playing with friends, old and new.
Couldn't of said it better myself mate
Who wrote this nonsense? What side was he on? You've converted me to PS3 networks...ya bum.
NineT9, your right sony would make more in their 7th yr. also do we forget that its free to go online with sony! i am surpised xbox has not made way more then 1billion since they charge for looking at the login screen lol...
so since sony will break 1billion in 7yrs (for free access and online play) wouldnt that make them better overall?
but you have the brain washed gamers that fork over the money to xbox or are just spoiled and drop cheesh on the live membership..with sony you only pay for extra's not standard's
Noby could not have happened on Xbox's pay-for-play network. Continue discussing.
I'm an Xbox fan, but really there really is no comparison. A decent free online service beats an overpriced one any day. It doesn't even matter how many "features" it has, XBL is monetary rape.
In fact, Microsoft's whole pricing scheme (which seems to try tricking users out of their money with every little purchase) is by far the worst thing about Xbox.
XBL FTW!!!
Hahahaha, i like visiting Engadget for the new tech posts, but every time it's something related to consoles they manage to make me laugh. I'm starting to think i'll never see an article about the PS3 where they don't show, in one way or the other, their complete and utter Microsoft nutswinging. It's truly unbelievable.
Here's Sony announcing a huge milestone reached by the PSN and what does Engadget do? It compares the profits of a free service to those of a paid one, bahahahahaha, seriously. And of course they declare Microsoft the winner.
Mr. Ross Miller, you're hilarious. As another poster put it, you just compared the profitability of iTunes Vs. Torrents. In other terms, you managed to make one of the most idiotic posts i've ever read on this site.
While i'm here, i'll point out that those $180 million revenue from the PSN has come from users purchasing NEW GAMES AND CONTENT, while the figure thrown out for Microsoft's profit will be made up in it's vast majority of people having to pay to play games they ALREADY PAID $60 AT THE STORE FOR.
If that doesn't seem wrong to anyone else, then Microsoft's reproductive organ is very securely lodged in their rectum.
It seems that they run their news posts related to Sony by MS marketing department before they post 'em. Only marketing people can twist numbers like this.
Ohhh. PSN is "free" say the fanboys.
I guess you get what you pay for then, because in addition to being "free" it also "sucks."
Engadget, I just lost a whole lot of faith in you...
You're also forgetting how much better Live is than PSN, in every way. And are you honestly complaining about paying $50 a year for a Gold account? That's $4.16 a month. Most of us probably piss away $5 on foul fast food meals on a regular basis. In my opinion, they could charge more and still enjoy a giant subscriber base.