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Sony’s decision to lock DC Universe Online accounts to a physical disc will cost it customers and lots of revenue

By on February 23, 2011
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Sony recently tried to break into the MMO genre on console with the high-profile launch of DC Universe Online.

It’s an interesting experiment in making an MMO work on the console platform, and paves the way for Sony to generate recurring, subscription revenue from its customers for access to its game. This is all the more important because boxed product revenues peaked in 2008 and Sony is dependent on the “royalty” it charges for every PS3 game sold to drive profits. MMO subscription revenue could make a very real difference to the profitability of PS3 as a whole.

Which is why its decision to lock user accounts to an individual disk is so baffling.

As Lazy Gamer reports, Sony has confirmed that:

“Once the PSN key has been consumed with a disk it cannot be resold/replayed with the second user adding a sub – only the original consumer can use that acct.”

and

“Disk and account are one”

Any operator of MMOs knows that customer acquisition is the most important long-term challenge. Selling a $50 disk is nice (of which the publisher might see $20, after retail, manufacturing, console owner royalty and distribution is taking into account). But getting a customer who pays $15 a month for 12 months (=$180) is *much* nicer.

A second hand disc generates no revenue for Sony, this is true. But for ever person who buys a disc secondhand (and deprives Sony of $20) there is a good chance that they will go on and subscribe, generating $180 or more.

So far, Sony has sold about 300,000 copies of DC Universe Online, according to VGChartz. If they all subscribe for a full year, Sony will gross around about $70 million. Not bad, but nowhere enough to cover the physical costs of the discs, the ongoing server and development costs, plus the rumoured initial $50 million development budget.

Customer acquisition is the secret to this, yet Sony is putting strategies in place that limit customer acquisition in order to get a measly $20.

Companies like CCP allow customers to download the client for EVE Online totally for free. They have realised that customer acquisition and retention is much more important than monetising the customer at the first time you interact with them.

If Sony thought the same, they would allow people to pass the disc around with wild abandon. Every person who uses it to sign up to DCUO is a prospect, not a pirate.

Instead, they are stuck in their old ways. I fear that this will come back to haunt them.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com