Sony's Partners Are Angling for Payback After the PlayStation Outage
The outage of Sony's (SNE) PlayStation Network will drag on for at least three more weeks and could wind up costing the company a billion dollars. But Sony isn't alone in its pain. The companies that depend on the PSN are losing money and complaining in public. Sony has offered some compensation to its affected users; now its partners may be getting in line, too.
At Capcom's online forum, Senior Vice President Christian Svensson wrote, the "outage [is] obviously costing us hundreds of thousands, if not millions of dollars in revenue that were planned for within our budget." While Svennsson didn't go so far as to request reparations, his comments made Capcom the first company to go on record with a dollar figure about the outage. Most game companies have declined any comment on the matter.
Svensson's comments seemed to have loosened other tongues. A few days later as Activision Blizzard was reporting stellar first-quarter earnings, CEO Bobby Kotick told The Wall Street Journal, "We're really concerned about it. People are really disappointed." While the company reported in a 32 percent increase in net income in the first quarter, Kotick was concerned about the impact on its games, specifically Call of Duty: Black Ops. The game, which has been a best-seller on all platforms since its release five months ago, can be played alone, but fans love the ability to play with friends across the network.
PSN generates about $10 million in revenue from downloads per week or about a half billion dollars a year, according to Wedbush Morgan analyst Michael Pachter. "It probably effects EA and Activision the most since they each get about 20 percent of that," he said.
Although PSN isn't expected to be back online before the end of May, Pachter said it would have to stay down for far longer before it started to really hurt. "Activision is a $4 billion company, so we're talking about losing less than 1 percent of that."
But no matter how small the leak, it is still costing the game companies and providing them with a reason to ask for something in return. It will be interesting to see if all these crocodile complaints will make Sony cut fees or otherwise hurt its own revenue flow in the wake of such an expensive shutdown. If they don't then it may be just a matter of time until the whole thing lands in court.
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