Sony Is Missing A Stream of Revenue: Digital Game Rentals

Posted by Spider on June 13, 2009 in Gaming | ∞

By all accounts Sony is losing their ass this cycle of consoles. They have arguably the best performing hardware out there with the best feature to price point ratio. They have some great exclusives that are not on any other console (inFamous, God of War III, MGS4: Guns of the Patriot, Little Big Planet) and the best back catalog outside of Nintendo.

The Wii is number one for a few good reasons, mainly the casual gaming environment coupled with the Virtual Console. Nintendo’s back catalog is amazing as they have been around for a decade longer than Sony in the console business. Their industry ties to developers are long standing and those developers are more than happy to bring their wares to the Virtual Console. This does not mean Sony is out in the cold though, as they have a huge collection of PSOne classics to fall back on as well as third party games from previous eras available (SFII:THD, Bionic Commando, et al).

The Xbox 360 has some backwards compatibility with original Xbox games and their XBLA is trouncing the PSN in classic releases. Luckily for Sony they are set to fix this issue as they announced at E3 that around 50 PSOne classic games would be coming to the PSN this year alone. Nevermind that they should have done this in full force from the beginning, but better late then never. Yet, Sony is being a bit short sighted on this whole thing. They are missing a possible revenue stream that should be included.

With digital content there is no return, no resale. You cannot take that copy of Street Fighter: Alpha for the PSOne that you downloaded from PSN to GameStop and turn it in for credit towards something you actually want to play. You paid your $4.99 and are stuck with it. You can delete it but then you feel like you completely wasted your money. So you keep it on your virtual shelf to collect virtual dust while you move on to something else, becoming a bit more wary of downloading games from the PSN.

Sony, listen up, as this is the model to base the PSN on to not only make gamers feel secure in their purchases but to give a better revenue stream to yourselves: PSN rentals.

PSN Rentals: The Only Way To Play

As of right now Sony has rentals for movies on their PSN video service. You pay a fee and rent the movie for two weeks, but you only get to watch it for 24 hours after you first start playing it. The semantics of that is for another column, but that is the industry standard as it is at the moment (Netflix aside). What Sony needs to do is have their own game rental store on the PSN. The technology is already there with the video service and the DRM is there for the PSN games, now they just need to marry the two.

Since most PSOne classics are coming in at around $9.99 to buy a $1.99 rental fee wouldn’t be too much to ask. The user would get to play the game for one week with no limits, doing away with the 24 hour play of the movies. Some games could be completed within that time but others could not. Could someone beat Final Fantasy VII in one week? Yes, they could, but they wouldn’t be getting much sleep and be missing a lot of the side quests. Could someone beat Resident Evil in one week? They could beat it in two hours if they have played it before. Some games would be a loss to Sony and their developers, but the conversion rates to purchases would make up for it.

Regardless, that is $1.99 more than Sony and the developer had to share to begin with. After the week was over the game would no longer launch and the user is then offered a choice; delete or purchase. If they choose purchase then Sony would charge the remaining amount left from the normal purchase price ($9.99-1.99=$8.00). If the user decides they don’t want to keep it they choose delete; Sony keeps the $1.99 and the user starts looking for more games to rent or buy.

Why would this work for PSOne games? Because there are many of these games that gamers these days have not played. Not everyone is going to like the original Resident Evil or Final Fantasy VII. Not everyone is going to enjoy Metal Gear Solid or Parasite Eve. By letting them try before buy the conversion rate will most likely be higher than the complaining rate that will come.

Many of these PSOne games are also not easy to find on disc anymore. The ones that you can find are fetching prices upwards of $70-100, depending upon the title. This is more than a copy of the latest, greatest PS3 title and you get no assurance of playability in most cases.

On the other end of the spectrum are PSN games themselves, those games released just for the PS3 through the PSN. A rental service here would work as well albeit with a few caveats. The number one being disabling Trophies so that people couldn’t rent, boost their Trophy count, then move on. Trophies would only be available with the full version of the game. The other caveat would be no DLC/Add-ons would work with the rentals. You would just be renting the core game.

I know what some of you are thinking, “They have demos for most of the PSN games, why would you want a rental?” Same reason as for the PSOne Classic games; a demo doesn’t give a person enough of a game to let them see if they want to purchase it most of the time. By allowing a person to rent a PSN game they get the full effect of the title then can decide on the merits of the game if they want to purchase it or not.

A rental store would also come in handy for the PSP especially with the release of the PSPgo. With the ability to download games directly to the PSP, finally untethered from a PC or PS3, a rental store would only be a boon. Scenario: a person is at their friend’s house. The friend wants to get a little one-on-one going in Untold Legends: Brotherhood of the Blade. Unfortunately the person does not have a copy of the game. Lucky for them Sony has it available for rental, the person rents it and is off playing against his friend. If the person ends up liking the game enough they will purchase it for future endeavors on their own or with their friend. Again, conversion to a full purchase.

This is a stream of revenue that Sony is missing out on and I am surprised they haven’t implemented it already. If they implemented it it would help severely in their finances but also in making the PSN a bit better than XBLA or Virtual Console. Neither of those stores have virtual game rentals and there appears to be nothing of the sort coming down the line either. If Sony gets on this and gets it out first it would be something they could tout in commercials to help move consoles. They already have a full service entertainment device as it is with gaming, movies, music, video rentals, and internet browsing.

Add a game rental store and there will be no reason for anyone to ever visit Blockbuster again.