Reports say that Sony has made expensive timed exclusivity agreements to ensure that some multi-platform games first come to PlayStation 5. While this could be true, the climbs are far from the mark.
FREE GALLERY – 3 PHOTOS
IN recent rumors says Sony is spending $ 750 million to get Grand Theft Auto 6 for 30-day time exclusively on PS5. This is preposterous for several reasons. It’s not the fact that Sony would secure timeless exclusivity for GTA 6 that is ridiculous. That deal could very well have been possible. Sony opened its PlayStation 5 public event with the announcement of next generation of Grand Theft Auto V, and also secured a free 30-day deal for the new standalone GTA Online for PS4 and PS5 gamers.
What is most ridiculous is the price tag associated with this report.
$ 750 million is more than five times the development budget of Destiny (~ $ 140 million), and more than five times the dev budget of Grand Theft Auto V ($ 137 million). It also exceeds the total cost of Star Citizen ($ 250 million +). Sony does not spend $ 750 million to develop, market and distribute them own match. It will certainly not take much to spend a month with exclusivity of a month on PlayStation 5.
Let’s put this another way. $ 750 million is 13% of the record $ 5.63 billion Q1 PlayStation revenue just released by Sony. Revenue is earnings before marketing, costs of goods sold, and other expenses are deducted.
In the end, PlayStation earned $ 1.152 billion in profits in Q1’20. This is the highest Q1 in the history of Sony, and the highest Q1 wins in the 48-year history of gaming.
To put it further, the rumored GTA 6 exclusivity cost of $ 750 million is 65% of this record Q1 PlayStation profits.
Long story short: It will not happen. Sony will not spend as much to ensure exclusivity.
How much exactly will it cost? We do not know. How many to be able to Sony spend? A lot. But that does not mean it will. Just because a company makes billions in profits in half a year does not mean that it will spend 3 / 4ths of a billion dollars on a third party game that it does not have fully and will not receive 100% of the proceeds from sales.
And besides, if this deal was in the works, we would see a lot of indications in the financial. Sony will not only pay a one-time payment of $ 750 million for a deal like this. They would now start paying, and it would be part of their sales, general and administrative branch, which handles marketing. If a deal like this happened, we would see changes in these figures.
Sales, general and administrative
Costs classified as sales costs have to do with the promotion and sale of products and include items such as advertising, promotion, shipping and warranty expenses. General and administrative expenses include business items such as officers’ salaries, personnel costs, amortization of fixed assets, office rent for sales, marketing and administrative divisions, a provision for doubtful accounts and amortization of intangible assets.
This expenditure department has not been substantially increased. In fact, SG&A numbers are down 14% in Q1’20 to $ 2.79 billion. This is the year that the PlayStation 5 will be released, so there is reason that these figures would increase now if Sony wanted to spread the $ 750 payment over several years.
GTA 6 is pre-production phases
If that was not enough, Grand Theft Auto 6 is still a long way off and is only in early pre-production stages of development.
The project comes after the next-gen version of Grand Theft Auto V, which should practice for GTA 6 optimizations on PlayStation 5 and Xbox Series X. GTA Online is getting a major overhaul, probably upgraded and connect directly to GTA 6 when done.
Signing an exclusive deal for a game that will not be ready for many more years is not a good investment on Sony’s part. It’s the type of deal that can be postponed, yes, but has no fee until Rockstar Games is ready to release the title. And no one knows when that will be – not even Take-Two Interactive mandates Rockstar to release titles at certain times. Why would they? Rockstar is their cash purchase outside of NBA 2K games, and GTA V has sold more than 135 million copies across two console generations (another three).
That kind of hidden visibility would give Sony’s board a break.
Ultimately, we should not believe these rumors. Yes, it is possible (and likely) that Rockstar will partner with Sony for the next Grand Theft Auto game. The PlayStation platform is the most lucrative console ecosystem in existence and it’s exactly where you want to be.
But $ 750 million is just tabloid nonsense. No one – not Sony, not Microsoft with their revenue of one hundred billion dollars, or even Nintendo with their record-smashing console sales – will pay $ 750 to own to make a game, let alone get exclusivity on a play that they do not have.
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