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Reports indicate that Sony has entered into expensive and timed exclusivity deals to ensure certain cross-platform games get to PlayStation 5 first. While that may be true, the spending is far from in line.
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A recent rumor says Sony is spending $ 750 million to make Grand Theft Auto 6 a 30-day timed exclusive on PS5. This is absurd for many reasons. It’s not the fact that Sony would guarantee timed exclusivity for GTA 6 that is ridiculous. This deal could very well be possible. Sony opened its PlayStation 5 reveal event with the Grand Theft Auto V Next Generation Announcement, and also got a free 30-day contract for the new standalone GTA Online for PS4 and PS5 players.
The most ridiculous is the price associated with this report.
$ 750 million is more than five times Destiny’s development budget (~ $ 140 million) and more than five times the development budget of Grand Theft Auto V ($ 137 million). It’s also more than the total cost of Star Citizen ($ 250 million and more). Sony does not spend $ 750 million to develop, market and distribute its own Games. He’s definitely not going to spend that much to get the one-month timed exclusivity on PlayStation 5.
Let’s put this in a different way. $ 750 million, or 13% of the record $ 5.63 billion PlayStation revenue in the first quarter that Sony just released. Income is pre-market profit, cost of goods sold and other expenses are subtracted.
In the end, PlayStation made a profit of $ 1.152 billion in the first quarter of 2020. This is the highest first quarter in Sony history and the highest first quarter profits in the 48-year history of Sony. Game.
To put that in perspective, the supposed GTA 6 exclusivity cost of $ 750 million represents 65% of that record earnings on PlayStation in the first quarter.
In short: it will not happen. Sony will not spend as much to guarantee exclusivity.
How much will he spend exactly? We do not know. How many can Sony is spending? A lot. But that doesn’t mean it will. Just because a company makes billions in profit every year doesn’t mean it will spend the 3/4 billion dollars on a third-party game it doesn’t fully own and won’t make 100% of the sales proceeds. . .
And besides, if this agreement were in preparation, we would see a lot of indications in its financial statements. Sony won’t just make a lump sum payment of $ 750 million in one go for a deal like this. They would start making payments now, and that would be part of his sales branch, general and administrative, which deals with marketing. If a deal like this happened, we would see changes in those numbers.
Selling, general and administrative expenses
Costs classified as selling expenses relate to the promotion and sale of products and include items such as advertising, promotion, shipping and warranty costs. General and administrative expenses include operating items such as executive salaries, personnel costs, depreciation of fixed assets, rental of office space for the sales, marketing and administrative divisions, a provision for bad debts and amortization of intangible assets.
This branch of expenditure did not increase significantly. In fact, the figures for selling, administrative and other overhead expenses are down 14% in the first quarter of 2020 to $ 2.79 billion. This is the year the PlayStation 5 was released, so it stands to reason that those numbers would increase now if Sony were to spread the $ 750 payout over several years.
GTA 6 is in pre-production
If that wasn’t enough, Grand Theft Auto 6 is still a long way off and is only in the early stages of pre-production development.
The project comes after the next gen version of Grand Theft Auto V, which should come in handy for GTA 6 optimizations on PlayStation 5 and Xbox Series X. GTA Online is undergoing a major overhaul, likely to be rolled out. level and connect directly with GTA 6 when ready.
Signing an exclusive deal for a game that won’t be ready for many years is not a good investment on Sony’s part. It’s the kind of deal that can be delayed, yes, but doesn’t pay off until Rockstar Games is ready to release the title. And no one knows when that will be the case – even Take-Two Interactive doesn’t ask Rockstar to release titles at times. Why would they do it? Rockstar is their business culture outside of NBA 2K games, and GTA V has sold over 135 million copies across two generations of consoles (soon three).
That kind of obscured visibility would give Sony’s board some pause.
At the end of the day, we shouldn’t believe these rumors. Yes, it’s possible (and likely) that Rockstar will team up with Sony for the upcoming Grand Theft Auto game. The PlayStation platform is the most lucrative console ecosystem out there and this is definitely where you want to be.
But $ 750 million is just tabloid nonsense. No one – not Sony, not Microsoft with its $ 100 billion revenue, not even Nintendo with its record console sales – will pay even $ 750. make a game, not to mention the exclusivity on a game they don’t own.
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