Sony to Pay for Cross-Play Support to Protect PSN Revenue, Documents Show

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Sony to Pay for Cross-Play Support to Protect PSN Revenue, Documents Show

In 2018, public outcry from "Fortnite" players seemed to encourage Sony to finally support cross-play on the PlayStation 4. Until the major shift in Fortnite, Sony had repeatedly chosen not to support cross-play for other games like Minecraft and Rocket League; newly released documents in the Epic Games v. Apple lawsuit show Epic's negotiations with Sony on cross-play attempts, and that when Sony finally allowed cross-platform play, it began charging developers based on revenues from games on other platforms.

In a 2019 Sony document titled "Cross-platform revenue share," Sony outlines its royalty payment policy for games that earn the majority of their revenue on platforms other than PS4." If the percentage of PSN revenue share divided by PS4 gameplay share for a title is less than 0.85 in a given month, the partner will pay royalties to SEE to offset the decrease in revenue."

A bit dodgy, but in essence, Sony is saying that PlayStation PlayStation players to remain dependent on Sony's servers/infrastructure and not run elsewhere to spend their money.

Sony's example illustrates how royalty payments work. It shows that if a game earns $1 million per month across all platforms, and $900,000 of that comes from PSN, while 95% of the total player base uses Sony's platform, Sony does not have to pay cross-play royalties The study shows that the PSN is the only platform that can be used for cross-play royalties. In this scenario, PSN's revenue share would be 90%, exceeding Sony's 85% threshold, and thus no royalties would be due.

Sony's justification for royalty payments appears to be a way to ensure that if enough players are using Sony's platform, PSN will also get a 30% cut from in-game purchases and generate a proportional share of revenue.

For example, if 20% of the entire "Rocket League" player base plays on PS4, but PlayStation players account for only 10% of the game's revenue (because players buy more skins on PC, for example), Sony would probably believes that it is not getting the return it should be getting by allowing cross-platform play, even though it is paying for the PSN infrastructure costs for all players. To "offset" the loss of revenue, game publishers would pay royalties to Sony based on the gap between the PS4 player base and the PSN revenue ratio.

To enable cross-play under the agreement, developers are required to share monthly reports with Sony detailing their share of PS4 revenue.

According to this document, Sony does not charge for crossplay on PlayStation; only the revenue sharing page was filed in Epic v. Apple. This document was created in 2019, so it is possible that Sony's approach to crossplay has changed in the last two years, but according to Epic CEO Tim Sweeney, in order for Epic to allow crossplay of "Fortnite" on PS4, Epic agreed to these terms He said that it was necessary to do so. He told the court Monday, "If someone was playing primarily on PlayStation but paying on an iPhone, this could trigger compensation."

Sweeney also said Sony is the only platform that requires compensation for cross-play support. I asked a Sony spokesperson to comment on whether the policy has changed since 2019 and whether Microsoft has an equivalent cross-play policy.

An email exchange between Sony and Epic in early 2018, before a revenue sharing plan was established, provides an interesting glimpse into the negotiations to make Fortnite's cross-play work. working in business development for the Unreal Engine Epic's Joe Krenier said, "I can't imagine a scenario where Epic doesn't get what we want." Krenier wrote, including the sharing of marketing data, Fortnite's E3 presence and PlayStation branding, and Epic "going out of its way to make Sony look like a hero" when cross-play support was announced. Suggested multiple temptations for Sony to support it.

Krenier also mentioned the possibility of future PSVR exclusive titles, and noted the terms of Sony's company-wide Unreal Engine 4 license. This license is the best terms we've offered for UE4," Krenier said. Let's make this a big win for all of us and agree now because Epic is not going to change its mind on this issue."

At the time, Sony was not convinced. Former senior director Gio Corsi said, "There are a lot of great ideas for ongoing partnerships, but cross-platform play is not a slam dunk, regardless of the size of the title. As you know, many companies are exploring this idea, but not a single company can explain how cross-console play will improve their PlayStation business. It wasn't until a few months later, in September 2018, that Sony embraced the idea and began supporting cross-play.

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