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Sony is spending millions to keep subscribers – just 5 weeks of free access to the game Ark: Survival Evolved cost the company US$1.5 million

In the current generation of console wars, much is riding on Sony and Xbox's subscription services, perhaps more than ever before. This assumption is confirmed by both companies recently revamping PlayStation Plus and Game Pass, and a pair of filings with the US Securities and Exchange Commission (SEC) make this even more compelling.

In September, Snail Games (an independent developer and publisher best known for Ark: Survival Evolved) filed an S1 form with the SEC – registration statement of private companies planning to go public. Snail claims that in 2021 the vast majority of its revenue came from digital sales through online platforms such as Steam, Xbox Live and PlayStation Network.

What’s particularly striking about the filing, however, is that Sony paid $3.5 million in November 2021 to make Ark free to PlayStation Plus members for five weeks. The contract stipulated that the game must meet certain “performance obligations,” most notably “it must generate a certain number of downloads in order to receive the full amount stipulated in the contract.” The free period for subscribers began on March 1, 2022, and Snail said it met its obligations on day one.

Sony paid $3.5 million for nothing in return, other than the hope that the game will help retain current subscribers and perhaps attract a “couple” of new ones. However, the company isn’t alone in shelling out for the privilege of offering Ark to customers for free.

Microsoft entered into a licensing agreement with Snail in 2018 to offer the game on Game Pass. Snail did not disclose earnings from previous years, but noted that Ark 1 earned $2.5 million in the first two quarters of 2022 alone. The publisher also received another $2.3 million from Xbox this year, designated as “deferred revenue” for Ark 2, which is due out next year.

And those are just one game's worth of numbers—Sony offers up to five free games per month to PS Plus subscribers. Based on Ark's data, Sony spends between $7.5 million and $17.5 million per month to keep PS Plus subscribers happy.

Sony and Microsoft spend millions of dollars a month on games that don't bring them direct revenue, so they rely on subscription services to ensure that profits from these privileges not only stay the same, but soar.