When Sony drops the licensing fees that they charge game developers, will this finally kill PC gaming? The one reason PC games are still made is because developers don't have to pay a licensing fee. Now if Sony does away with the licensing fee's why would a game developer stay with the PC when they could make a greater profit with the PS3. Also, does anyone think this will put pressure on Nintendo and Microsoft to abandon the licensing fee's? Just a thought!

Yes. The only reason there are PC games is that there is no licensing fee. Once this is gone there will be no reason to make PC games. They will be dead. If you take away the one reason for their existence they will go away forever.

PC games will NEVER die. A PC allow for too much customizability, and a lot of people dig that. Besides, some games sell better on PC than on consoles. Companies that have established themselves as PC game companies won't abandon the idea.

Nope, it won't kill them. It might now help them, but it won't kill them.

As Mark Asher once said, "You'll have to pry my mouse out of my cold dead hand."

PC games will be around as long as there are PCs. Why? It's a market. People who have PCs want to play games on them. There's a demand, and someone will fill it. Why would a developer go this route and not the console route? Leaving aside the technical factors and the specific qualities of a PC that make it a good gaming platform, there's simple market dynamics. The number of companies competing for a share of the console gaming dollar is already high, and will go higher. More competition tends to mean lower prices, or if not (because of the licensing strucure among other things) then at least more fragmentation of market shares. More companies with more games means each company is likely to get a smaller slice of the pie.

Now, someone is bound to realize that marketing PC games to an audience that wants games and is served by fewer publishers/developers means less competition and a bigger piece of the action. And, likely, more profits. And if in fact the licensing scheme dies for console games, prices will nosedive as competition kicks in, further depressing profits.

At ar makazene, wee is prowd uf beeng grate riteres.

"When Sony drops the licensing fees that they charge game developers, will this finally kill PC gaming?"

No. If your theory is that licensing fees are keeping developers away from consoles, I'd have to say that you are wrong. Because developers aren't staying away from consoles--they are flocking to them in droves.

What I really don't understand is why people talk about the console and PC platforms as though they are seamlessly interchangeable. The reason why consoles aren't going to kill PC gaming is because console gaming is not a suitable substitute. It's different. The games are totally different. Some people like console games more, some people prefer PC games. As long as you have some of the latter, PC gaming will do just fine.

"At ar makazene, wee is prowd uf beeng grate riteres."

And accomplished humorists.

I do think dropping the fees will have an impact on PC games, though I don't expect PC games to go away. Some developers will shift focus even more to the console then.

But don't forget that Sony will still be the gatekeeper. You'll still have to have their approval to publish your PS3 game.

Also, PC games may still look better. No doubt the PS3 will be powerful and look great, but PCs may leapfrog ahead anyway, and there's always PC monitors vs. TV displays too.

Hmm, I meant to publish my "huked on fonix" line in another thread. Ah well. Sue me :-).

This is nonsense. Sony will not drop the revenue stream that they currently enjoy from the developers.

Understand this: SONY MAKES ITS MONEY FROM THE PUBLISHERS, NOT THE PUBLIC.

I make a PS2 game. I press 100,000 copies. I give Sony $700,000 dollars. It doesn't matter to Sony how many of those copies I sell at all, because that's all between Toys'R'Us and me.

Sony (and other manufacturers) lose huge sums of cash on their hardware. They then try to make that up with profits from first-party games, plus the licensing fees from third-party games.

As Sony's hardware costs approach zero, their profit increases. But why shut off a profit stream that publishers are already used to parting with?

The balance between 1st and 3rd party is already a delicate one. They won't open the door to stiffer competition with their own titles and simultaneously shut off guaranteed revenue.

This is nonsense. Sony will not drop the revenue stream that they currently enjoy from the developers.

Understand this: SONY MAKES ITS MONEY FROM THE PUBLISHERS, NOT THE PUBLIC.

I make a PS2 game. I press 100,000 copies. I give Sony $700,000 dollars. It doesn't matter to Sony how many of those copies I sell at all, because that's all between Toys'R'Us and me.

Sony (and other manufacturers) lose huge sums of cash on their hardware. They then try to make that up with profits from first-party games, plus the licensing fees from third-party games.

As Sony's hardware costs approach zero, their profit increases. But why shut off a profit stream that publishers are already used to parting with?

The balance between 1st and 3rd party is already a delicate one. They won't open the door to stiffer competition with their own titles and simultaneously shut off guaranteed revenue.

The licensing fees do not deter anyone from creating a console game. It's an accepted cost of business.

'The licensing fees do not deter anyone from creating a console game. It's an accepted cost of business.'

Here on earth, dead-weight loss is a disincentive for investment. If the Sony licensing fee is $7 a copy.....geez, if the retail price is $40, and $10 of that is retail, and $5 wholesale, then Sony is taking 7/25 = 28% of the developers revenue.

Man.

Which is why they will never eliminate the licencing fee. . . every SSX makes EA a lot of money, but Sony a lot of money too.

You forgot cost of goods-- you have to press the DVDs (often at a Sony replicator, natch), do a manual, do a DVD box. . . $4-5.

Of course, we've left out marketing and the MDF fees as well.

Well, I saw the article in question and if I recall correctly it did say that Sony plans on dropping the licensing fees. Whether they really will do so is another question.

I guess the case for doing so is that they would sew up the third-party development market. Everyone would make games for the PS3 unless Nintendo and Microsoft also dropped their fees.

Sony wants home computing shifted to the living room and they want to be the standard bearer. Dropping the licensing fees is one angle to take to make this happen. It makes their platform more attractive. But yeah, it does seem like an odd thing to do.

Jason, where are you finding $40 PS2 games at? Every place I hit runs 'em at $45+. Those few extra dollars make a big difference over a very large run.

Lets not forget that 100,000 sales is a great figure for a PC game, but I believe it is a pretty ugly number for a console game. Console games far outsell PC games, which is why lots of developers are jumping on the console bandwagon lately, licensing fee or no.

The anonymous post above had it right in saying that Sony (and MS and Nintendo) lose a lot of money in the hardware end of the business. If they cut off the money they get from licensing then they will have to increase the cost of the unit. Would you pay $500-$600 for a game-only unit when for just a bit more you can get a computer that allows you to do so much more? And these days you can get a pretty rock solid system for a grand.

Oh, I'm not saying the current system is necessarily bad; I was just arguing with the statement that 'the fees do not deter anyone from developing a console game.'

The licensing method ups the break-even volume point for any average console game, which tends to drive out the niche products (wargames come to mind). Whether this is better or worse than having a lower cost of game production but selling to a smaller installed base, I have no idea.

Actually, now that I think about it, I'm pretty sure it sucks for developers, as they're having, at a bare minimum, 30% or so of their profit taken away, possibly more.

Hmm, does anyone have any pricing info for consoles? Is the total sales volume non-linear past a certain point, e.g., if you double the price you get a third of the consoles sold?

I think Sony will replace the license fee that they currently collect from developers with something else. The replacement will probably be a subscription fee that you as the end-user will pay Sony to play and download PS3 games over broadband.

"The replacement will probably be a subscription fee that you as the end-user will pay Sony to play and download PS3 games over broadband."

Jesus, how fast of a connection will we need to download games by then? Already Square's games come on multiple CDs. I don't see games getting simpler.

Actually, it wouldn't surprise me if they found a way to "stream" a game, much like they do video now. That seems pretty feasible. Downloading doesn't sound very resonable to me, but if they could stream it, sure, I can see Sony doing that and charging for it to make up for the lack of licensing fees.

Sony want's to so badly take the internet out of the personal computer and put it on the television set. but it's not going to work! People still look at consoles as toys and items that belong in the bedroom with the children and not in the family living room. Anyway, does anyone remember Web T.V.? It was a horrible idea. You can't download content. You can't view certain web pages because they were meant for the computer screen and not the television. Also, do you really think people will like surfing the internet on there couches? I know I wouldn't. Also, how the hell am I going to type my term papers on a PS2 or a PS3.

I remember the Newsweek article a year and a half ago, and they were bragging that the PS2 will change how we view the computer and consumers will flock to the PS2 and get rid of there computers. Has it happened? No!! Newsweek also stated that PC gaming was finished with the arrival of the PS2. Was this a reality? No!! My brother bought into the hype and bought himself a PS2. He never plays it and it's tucked away for good. He also has Web T.V. and he hates it. He's looking to buy a computer.

I believe that since Sony is a Japenese company and they have that Asian mentallity that computers are bulky and of no use. Computer systems aren't very popular in Japan. But in America and Europe computer systems reign supreme and I don't see that changing.

Your thoughts?

PS3 is far enough off that none of this is Fact yet. It's Rumor.

The article in question also says that you won't buy games in stores, but instead download them all on some uber-fast optical network where part of the game system will be vast computational power on the back-end, and part of it will be a powerful console in your living room.

Uh, yeah, the world is going to be ready for THAT in 2004-2005. Sure. That's a nice idea for a console system, maybe, in 10-15 years.

Sony's vision is one where people get all their home entertainment - movies, music, TV, and games - delivered via network direct to some box in their living room. Sony is convinced that is the future, and because Sony owns a lot of music and movies, they want to be that gateway.

I personally think it's a fundamentally flawed vision, at least for this decade. People want to buy physical stuff. People want to RENT physical stuff. Pay per view is popular, but it's not even close to replacing new movie rentals, and DVD/video purchases. And so it will be with music and games for some time to come.

Powerful downloading for consoles with hard drives and broadband will certainly change gaming from a design and marketing perspective, and it'll happen in like 3 years. But it'll only happen for some games (episodic, peristant online, game demos) and it won't put a dent in the standard Retail Model. In fact, I think broadband delivery of game demos on consoles *might* only push more people to brick 'n mortar stores.

Actually, I believe Sony's vision for home entertainment is a Playstation Mainframe at the heart of a home network which will beable to pipe content to any and every TV or monitor in the house. You can watch a movie you downloaded off the internet in the living room on your home theater setup. You can listen to MP3s on a stereo in the kitchen. Or you can play an online videogame from the bedroom. All of this stuff being served up from a Playstation 3 or 4 or 5, or whatever, hidden away in a closet somewhere with a big hard drive and fiber optic net connection.

Oh, and people are always looking for a reason to say PC gaming is dead. We all know this is an absolutely ludicrous notion so I don't think it is even neccisary to address these sensationalized claims.

Brad Grenz

And, really, is this all that different from what Microsoft, IBM, and so many other computer companies want -- of course, with a PC in the closet, rather than the Playstation-whatever.