Sony's Profit on EQ

[Tyro]

Take a look at this.

Lots of interesting numbers reported in that article.

Smedley, 33, is the chief operating officer of Sony Online Entertainment, where he's master of the virtual boomtown known as EverQuest. Once a destination for the fringe Dungeons & Dragons crowd, the online role-playing game now has 433,000 paying customers who generate $5 million a month for the Japanese entertainment giant. Given the 40 percent gross-profit margins, and the fact that this world practically runs itself, the dragon-slaying business is looking pretty good these days.

So now we have some more definate numbers. 40% gross-profit margin on $5 million. What exactly is gross profit? Just need to pay taxes from that? Sony's makin a bunch off EQ. Way more than just breaking even.

[chaotic]

Further on down, the reporter credits Smed with "genius" for thinking of charging people $50 per server move, which generates, apparently, a large amount of money for them.

[Tyro]

I wish I could make $50 per file/directory I copy from one location to another.

[flobee]

You're welcome Smed for all my /feedbacks about charging for server changes, char account switches and name changes. I didn't say anything about stripping the chars though. I'll leave that one to Smed to take credit for.

[throx]

Was it ever any secret that Everquest makes money for Sony? Nowhere near as much as their record sales do and nowhere near the profit margin of those sales but it still certainly makes money.

I'm constantly surprised by the people that seem to have some notion in their head that making money from an online game is somehow unethical or that the amount of money charged for a service (such as character transfers) should reflect the amount of effort required for that service. It's completely false.

The amount of money Sony charges is the amount of money people are prepared to pay for the service they provide. Obviously it's worth $50 for a lot of people to have their characters switched. Obviously it's worth $13/month for people to connect to the Everquest servers. If they could jack the price up to $20/month without losing a lot of customers I'm sure they'd do that too.

Customer support is severely limited because Sony's figured out that people really don't care enough about it (in general) to cancel their accounts over it. Those who quit tend to hand their accounts on to someone else (ie no loss for Sony) and most just rant and rave on some message board about what they deserve for $13/month.

In the end, the only thing guaranteed to change Sony's mind about the way things work is to start cancelling subscriptions. If that doesn't happen then they really have no reason to care.

[chaotic]

My philosophy always has been that people will vote with their feet. If the negative way in which they are treated by Verant outweighs the entertainment value that EQ has in their lives, they will leave.

The opposite of this is happening, so obviously Verant must be getting many things right with EQ that other companies (Funcom, Mythic, et al.) are not.

And I, too, get annoyed with people who seem to think that corporations ought to provide products and services out of the goodness of their hearts. Spare me the socialism.

[The Sage]

Socialism = good. But everyone is in it for the money and Sony is doing damn good there. So even if they are doing crappy stuff/crappy service/whatever, it hasn't bugged people enough (and many of us are among those numbers of "not ticked enough") to leave, then they won't change. Not one darn bit.

yea i know, the epitome of redundancy.

But I wanted to see if I had my penguin yet =)