New subscription service could be the future of gaming
Are games following the Netflix format?
As of the 10th November 2020 an Xbox Game Pass Ultimate Subscription will give you access to EA Play as well as the already vast library of games associated with the Xbox Game Pass.
This is a first for the gaming industry; EA Play is EA’s own monthly subscription platform that, until now, gamers paid separately to access.
But does this mean that future gaming titles will only be released via such subscription services, rather than as the traditional, single purchases we're used to?
Slowly, monthly subscription services have seeped into our lives and wallets. Brits alone spend more than £2bn* every year on subscription services. It's estimated that 23% of 18-34 year olds have a Subscription Box service and over 60% of UK adults have Amazon Prime*.
Shaving Kits from Harry's Razors, clothing from Stitch Fix, healthy snacks from Graze...these are all available for a single monthly fee, with some starting from as little as £4 a month. Royal Mail estimates that the subscription box industry could be worth more than £1bn by 2022.
Other gaming subscription services, such as Apple Arcade and Google Stadia, have already tried to take a substantial bite of the gaming subscription pie. Apple Arcade is the most successful, pulling in roughly 12 million subscribers as I write. Apple Arcade is mainly a player in the mobile gaming market. What about the gaming heavyweights? What about Xbox and Playstation?
Of these two platforms, Playstation has over 113 million monthly active users. Its Playstation Now subscription service costs £8.99 per month, or you can buy an annual pass for £49.99, with access to well over 650 games from the PS2, PS3 and PS4 era of gaming.
Xbox has over 90 million monthly active users and has Xbox Game Pass, which comes at two price points: £7.99 for the standard console-only version, or £10.99 for the Ultimate Edition, which includes cloud gaming (being able to play on your phone), EA Play, Xbox Live Gold, access to PC Games as well as console, and 200+ games to choose from (not including the games on EA Play).
Looking at the prices above and what content is included, the Xbox Game Pass Ultimate is clearly the winner, with over 15 million monthly subscribers compared to Playstation's 2.2 million. Many industry insiders are putting this down to the content on Game Pass as well as the extras gained from the Ultimate price point; Xbox owners will be looking to invest even more into the subscription service.
What does that mean for games developers?
Subscription services are great for consumers, but what about the content creators? Some games can cost well over £40mn to make and manufacture; in fact, if you want to make a game like Call of Duty, it would cost more than £200mn to develop. Developers have always relied on physical sales and the contract they sign with games publishing companies (such as EA of Ubisoft). Traditionally, from the sale of a £60 game, the publisher would see approx. 27%. If they sold their game online, through such as Steam or the Xbox Game store, they might receive 70% of the revenue.
So, how is revenue from Game Pass paid back to the developers?
Many subscription services have received negative press in recent years for not paying their artists and contributors adequately. Spotify regularly comes under fire for apparently underpaying artists and music contributors; David Byrne from Talking Heads stated, ‘If artists have to rely almost exclusively on the income from these services, they'll be out of work within a year,’ in October 2013.
Currently, gaming still stands as one of the most profitable industries to be in (if you're good at what you do), but with more and more gamers taking up a subscription (Game Pass gained 5 million users in a 6-month period alone) we may see the same backlash that we see with other subscription services.
Let us know what you think @intheknowemag
*Source : https://www.finder.com/uk/subscription-service-statistics#:~:text=Subscription%20boxes,-Subscription%20boxes%20are&text=The%20latest%20stats%20from%20Royal,subscription%20box%20in%20the%20UK.
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