It will be (well, it COULD be) in a hypothetical scenario where these won't be "extra money" anymore, but "all the money we'll ever get for working on this".
Were you even following the conversation so far?
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Business Insider: Video game makers are worried that the industry is adopting the Netflix model
- Thread starter stormfire
- Start date
Were you even following the conversation so far?
Why would I be positive about parasite subscription services just because it's video games? I've made my position on the streaming service wars immaculately clear over and over again, I'm just being consistent.
Yeah, well, mobile gaming are all time high and they're good, right? RIIIIIIGHT?
I honestly hope Sony and Nintendo don't devalue their games with those subscription shenanigans. I mean, subscriptions are great... But for games a few month/years after the traditional release. The inevitable push for content all the time will make it kinda like Netflix in the way there's always a flood of mediocre/cheap content being released weekly with maybe one high profile/budget game being released per year (maybe not even that much, as a big budget game is fairly more expensive nowadays than a big budget Netflix movie).
This model is being pushed by Microsoft for a reason: they have the money to lose and can endure it for a few years to see if it will ever be profitable.
This model is being pushed by Microsoft for a reason: they have the money to lose and can endure it for a few years to see if it will ever be profitable.
It's here to stay, time for Nintendo and Sony to adapt.
Seriously, first time in forever we the players get a good deal going and big corporations don't like it? Too bad? Less money in the pocket of some of these big devs isn't exactly a bad thing.
Seriously, first time in forever we the players get a good deal going and big corporations don't like it? Too bad? Less money in the pocket of some of these big devs isn't exactly a bad thing.
A very small margin of musicians make any worthwhile money from streaming. The music industry and artists survive basically from concert tickets (it wasn't common for record labels to take a cut from tour tickets a few years ago, but now it's a given that there's a clause about it in any contract). The movie industry is also thriving due to the box office and Netflix making blockbusters that cost 100 million+ is just them going after validation eyeing the long term... that money is not coming back and will not come for a few years.
Nintendo probably never will considering their subscription service is so decades old games.
Sony I imagine want to fight it as long as possible just because they're making so much money with their first party games. Their game sales would need to collapse next gen for them to adopt the same strategy.
when companies make less money they tend to make crappier products
No but they are the ones leading the charge of change.
I'm not saying Sony and Nintendo need to adapt because they will be left behind
But they should do it for their fans.
So Red Dead and the Last of us cost $20 million less. It's not the end of the world, the game will still be fun.
1.) I don't believe that it is my job to find a way to sustain the game industry. If I see a good deal, I'm in. Game Pass is just that
2.) The media comparison is a little disingenuous. Movies and music don't have DLC, MTX, or season passes. You pay the fee for Apple Music, for example, and that's it. You get a game on Game Pass, however, and there are still a bunch of opportunities for the consumer to be monetized. Also, 3rd party games have a pattern so far of not releasing on Game Pass until their run at full price has come to a close. Look at Final Fantasy XV, which has largely been irrelevant for a while now. That game has stopped making money for a minute, but putting it on GP allows Square to net some revenue they otherwise would have missed out on. Monster Hunter and Kingdom Hearts wound up on GP in time for major DLC too.
3.) Lot of bad faith posts in here about how Game Pass must be bleeding cash, with nothing legitimate to really back up that assertion. If they were bleeding that badly, Game Pass would have been dropped already.
2.) The media comparison is a little disingenuous. Movies and music don't have DLC, MTX, or season passes. You pay the fee for Apple Music, for example, and that's it. You get a game on Game Pass, however, and there are still a bunch of opportunities for the consumer to be monetized. Also, 3rd party games have a pattern so far of not releasing on Game Pass until their run at full price has come to a close. Look at Final Fantasy XV, which has largely been irrelevant for a while now. That game has stopped making money for a minute, but putting it on GP allows Square to net some revenue they otherwise would have missed out on. Monster Hunter and Kingdom Hearts wound up on GP in time for major DLC too.
3.) Lot of bad faith posts in here about how Game Pass must be bleeding cash, with nothing legitimate to really back up that assertion. If they were bleeding that badly, Game Pass would have been dropped already.
Where exactly do you think that $20 million less is going to come from? Maybe the art department or music or QA and the game launches with game breaking bugs or half the promised features...
doesn't sound like fun to me
You aren't understanding the context at all. Its not JUST about GamePass it's about GamePass having the same effect that Netflix and the subsequent competitors had on DVD sales.
Now, unless your movie gets on a streaming service, it basically doesn't get seen after it leaves theaters. Because the market changed for film your only hope of revenue, post theater is a streaming service.
The problem is games do not have a Theater or Concert equivalent like music or film. The closest would be the initial release window, but if gamers are trained to not purchase during the release window to wait for it to be added to streaming then a games revenues become almost entirely dependent on being on a subscription service.
Again GamePass in isolation is probably fine. The concerns are what it will do to the industry in the long term and the effects are similar to killing DVDs and CDs where content is purchased on a more direct basis to the artist.
That's a very reductive way to look at things. Angry Birds is even fun for a while, but that literally doesn't matter in the context he or she was talking. Ultimately what matters isn't whether something is good or fun or not, but whether it's as good as it used to or ought to be, or more ideally, better than past releases.
We expect games, game design, levels of polish, amount of content, production values etc to improve over time (in all areas), not regress. That's not to say games won't improve because of streaming and subscription services, but if pubs make (a lot) less money, it's certainly a possibility.
The argument is a bit flawed when you look at Netflix and movies. Big movies come out in the cinema, then they are available to purchase, then on subscription TV and when they are a few years old the appear on Netflix. Netflix then supplement old content with their own content. I think we will see the same with games. GTA 6 isn't going to launch on gamepass but might appear 3 years later once the major have already bought it. I don't think the publisher really lose out. The people buying gta after a few years would traditionally be renting it or buying a second hand copy.
With streaming and a subscription model you can also hit a much larger market for your game. I imagine the majority of console owners only buy 1 or 2 games per year. So the gamer would actually spend more than they would traditionally. Games pass works out to be 3 games per year
There are so many doomsday scenarios it's hard to keep up. Which doomsday scenario is this? That Microsoft is going to stop allowing games to be sold on the Xbox and they will force every game to release only on Game Pass offering each developer less and less money for the privilege?
yes spread out across hundreds of games... working out to a fraction of a penny per game/user. Even if GamePass has 5 million users it's literally peanuts and pennies to a big AAA developer.
Just as an example Spider-Man sold close to 15 million copies worldwide and almost certainly made more revenue then the entirety of all of GamePass. It doesn't work for AAA games out of the gate. Spider-Man sold 3.3 copies in its first 3 days. This is what big AAA devs are afraid of. Investing 100 million into a game to only get a fraction of that back in streaming revenue.
Nintendo and Sony fans have been very happy. Microsoft was the one the had to make sweeping changes.
I've been following... all im seeing is a bunch of slippery-slope fallacy and predictions that run counter to actual observed trends
Fear of this hypothetical scenario is based on what though? There's literally no trend to suggest this doom's day scenario has any realistic possibility of becoming a really.
Anyone can dream up scary yet baseless hypothetical scenarios
This doesnt make any sense. Developers arent fighting over the scraps of Gamepass subscription revenue. Microsoft is reinvesting overall gaming income into building a gamepass library. This library has the effect of boosting Microsoft's other revenue streams - more gamepass subs means more xbl subs, more DLC sales, and more digital software sales - so to MS GP like a loss leader
An AAA developer that chooses to launch on Gamepass, wouldnt do so without a check from MS that properly compensates them for the game appearing so early in its life cycle. A third party game of spiderman's caliber would probably be prohibitively expensive to get a gamepass launch - MS would make much more money having it sell in the store first, then negotiating it for gamepass later - which is exactly what they've been doing for big games, with few exceptions.
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It's the financial outcome of game sales on xbox one.
What exactly are you looking for? Sources for gamepass boosting sales?
Forza Horizon 4 is the Best-Selling Horizon Game in the Series, Xbox's Aaron Greenberg Reveals
Gears 5 Outsold Gears 4 Despite Being On Xbox Game Pass
Xbox Game Pass significantly increases game sales and playtime says Microsoft
Xbox Game Pass 'quadrupled' Descenders sales says developer Mike Rose
AGAIN, this is because GamePass is a single service and not an industry standard. The Trend is Netflix. Netflix did not single handedly destroy DVD sales. Competitors saw the positive consumer reception and moved to similar models while traditional single content sales significantly died out.
This article is NOT ABOUT JUST GAMEPASS, it's talking about what happens when the entire industry is forced to switch this model just to stay competitive.
Just like how Netflix was fine until the market and industry changed to primarily subscription services.
Talking about JUST GamePass is grossly shortsighted.
The Netflix comparison doesn't make any sense. Unlike Netflix, Gamepass is a loss leading service that feeds other, high margin revenue streams. The notion that MS or anyone other top provider who offers something similar to Gamepass would want to do away with these other revenue streams is, frankly, INSANE. The big money is in getting people to buy things after they sub and using subscriber activity as marketing.
The similarities between this subscription model and Netflix business model begin and end with on demand content. Netflix wants to profit from subscription fees - it's only revenue stream. Gamepass wants to attract customers to an ecosystem that presents multiple avenues for increased consumer engagement. The fees arent intended to be the profit, and realistically, never will be. Especially not given how expensive (and unfruitful) it would be to try to coax the entire industry to stop selling games to consumers and only sell them to content providers.
Why would a greedy, massive corporatation trade a multitude of high margin revenue streams for a single low margin, high overhead service when they stand to make much more money by having all these streams coexist and compliment each other?
If the rest of the industry switched to a similar model, they too would use it too extend sales windows and boost other revenue streams, not to cut off revenue streams. Talking about gamepass isnt short-sighted. It's the game subscription model that makes sense, so it's the trend to watch in this space, not netflix. An industry wide, sub-only model wouldn't make financial sense for publishers or platform holders.
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I would argue that it is always this way for the music industry.
My point is that platforms are still paying in the other industry. And the those industries are still growing.
You are just assuming if there's no streaming service more artists will get worthwhile money. Considering where the industry was heading, I think that would not be the case.
As for movie industry, Netflix is not the only company paying for 100 million movies. Everybody is doing it. The point is never when will they make back the money. The points is that they WILL make the money back.
That's the entire point! You literally hit the nail on the head. An industry wide subscription model does NOT make sense, just like a subscription only revenue for after theater DVDs did not make sense to put their films on subscription services for a fraction of what they make in DVD sales... But yet here we are because once the consumer demands subscription services it changes the industry. That's the entire point!
Once competitors have to switch to subscription models just to compete with GamePass then that becomes the new standard for many consumers and traditional revenue streams like purchasing full price individual games begin to fade because the entire industry was forced to adopt subscription models and now consumers expect and demand it.
When you follow it to its end, the result is that consumer demand will force platform holders and publishers to offer subscription alternatives. We ALREADY see that with EA Access and UPlay! When that happens and users are not buying individual pieces of content then content starts to be come mass produced in the most economical ways possible to keep feeding the subscription models.
This is the future everyone is afraid of and it's already happening. GamePass is the beginning, not the end of this process and the catalyst to force other major platform holders and publishers because as you pointed out a greedy corporation doesn't care about the integrity of the game or art, just the revenue.
Yes I did hit the nail on the head. No, We arent in any sort of agreement.
A subscription only model doesnt make sense, especially not for greedy revenue hungry corporations. The big money is in using subscription services like Gamepass to feed other, high margin revenue streams. So the notion that the next evolution of the Gamepass model is one that eliminates sales altogether is baseless. No greedy corporation would trade the high margins of the 3rd party sales royalties, for the low margins of a subscription fee-only business model.
MS is more than happy to directly sell GTAV in the store for 7 years, collecting 30% of every transaction, before licensing it to gamepass, boosting the games earning potential once more. This relationship makes GTAV more financially valuable to MS than it would be in a traditional-sales-only model or a subscription-only model. So Why would they ever switch to a sub-only model when the dual model is more lucrative? This fear makes no sense.
Anyone who "switches" to a subscription model with gamepass would surely continue to keep selling games, because the resulting boost in sales is the financial benefit of a subscription gaming service. And we gotta be careful with the term "switches", because it implies subs are being offered instead of transitional sales. no one has "switched" to a sub model, they've all added the sub model in a supplemental manner to their traditional offering.
Like you said, we already see competition in the form of EA Access and Uplay... and guess what, both services sell the games that show up in the sub, just like Gamepass. Because THAT'S the trend to follow if a sub description service is to bear fruit. And just like gamepass, these services seak to profit from downstream sales, not the sub-fee alone.
So no, this bleak, subscription-only future isn't the end result. The love of revenue is exactly why it wont happen. The "sub service that also offers traditional sales" model is where the consumer demand is and its the model that stands to be profitable the platform holder & publishers alike, whilst also giving consumers the most options and best value.
Your notion that greedy companies are going too adopt a model that lowers their earning potential buy cutting off the most profitable aspects of their business is nonsensical.
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Back in the day, you used to buy a camera and film. Take a picture, go somewhere else and process the film to have an image and have negatives. Camera tech got better, and you had instant photo cameras. Today, you can have all of this in a phone, not have to carry photos or process to share memories with loved ones.
Prices on things like air fares have been getting cheaper even as jets get more expensive. It is because of not only more competition, but ever efficient power plants being put out. Those benefits being conferred to the consumer. You no longer need to go to a travel agent, you can go online, compare fares and book from there. Advancements in tech gutted the travel agency business and the huge commissions that were passed down to consumers.
Today, I do not need a wall to wall cabinets where I stack my VCR tapes, audio cassetes, CD's DVD's, Blu Ray discs. I read my fair share of novels, and you no longer need to have space to store books as far as the eye can see because tech has evolved. I can get the biggest hard drive possible and store all my digital stuff there or simply use the various digital services that link all my purchases to my account and stream wherever I want, on whatever device I have.
Tech has made a lot of things cheaper to do, and out right convenient. Today I do not need to invest in an iPod or another digital player, a discman or even the Walkman that was the precursor to all of that. I have my music and playlists on phone and I can listen to them anytime, anywhere, even in far flung areas where phone networks might be a problem.
So it comes as a surprise that in a gaming forum, one of the few big ones remaining, you see people debating how advancements in tech are bad, or how the eventual benefits that come with it should be fought.
It is almost as if we do not see the same huge jumps every so often in hardware yet prices on product lines keep tanking over time. It is cheaper to get a 4K TV today than it was to get a HDTV in the early 2000's. It is cheaper today to get a phone that does it all that it was to get Nokia 1100's. Tech needs to advance and companies need to adjust. You snooze, you lose.
No this simply isn't true, you are making a presumption that users will continue to purchase individual content at the same rate and volume when much of it can be found on subscription. Multiple industries have proven that this line of thinking is simply not true. Once a subscription model becomes the industry standard, traditional sales models suffer. Period. For some reason you thing the games industry is some special snowflake that's immune to this effect. No they aren't going to want to generate less revenue for more content but they won't have a choice just to stay competitive. You're acting like they can just control consumer spending.
just as an example I purchased an Xbox SAD for $150 over the holidays. I didn't purchase a single game for it and subbed to GamePass for 6 months. I'm also NOT going to buy a single game for it either, I will get EA Access and Game sub and my kids will play whatever's on that service. There's millions upon millions of consumers who will take the same approach. You don't even have to go that far, you see people on ERA saying they are more hesitate to buy games as they may come to a subscription service. The more subs that come along the more that consumer hesitation will increase.
Yes this is NOT beneficial for the market leaders long term as they would loss money, but neither Xbox nor Netflix were the market leaders when they went all in on the subscription model.
GamePass only exists in the form it does because they aren't leading in revenues generated from the traditional model.
it's not a debate on whether it's good or bad, I'm arguing what the article states. On how it will change the industry and way consumers will purchase content. I'm all for subscription models and have virtually very gaming sub there is, but I also understand that this comes with a price and an effect on the entire industry. There are people trying to argue that when every company has a sub service consumers will continue buying individual content in the volume they always have... because that worked out so well for CDs and DVDs.
I don't deny that the concept of buying and owning games is probably going to become largely obsolete just like it did with owning music and movies.
But exactly how games on streaming services will end up being monetised is an important question.
If it's number of hours played (analogous to number of plays on Spotify) then that will probably incentivize developers to make games with addictive gameplay loops, online multiplayer, etc. and it will disincentivize narrative-focused single player experiences that are only like 10 hours long with little replay value.
But exactly how games on streaming services will end up being monetised is an important question.
If it's number of hours played (analogous to number of plays on Spotify) then that will probably incentivize developers to make games with addictive gameplay loops, online multiplayer, etc. and it will disincentivize narrative-focused single player experiences that are only like 10 hours long with little replay value.
What does tech really do? It anticipates where the market is headed and tried to meet consumer demand. In short, it anticipates what consumer concerns are, and meets that need.
I will give an example. Blockbuster used to be big. Their business model was not something that movie companies were fond of because it limited sales. What streaming did was to get rid of that market, get rid of rents paid by stores, employee payroll, the capital costs that come with investment on tapes, DVD's and pass the benefits of more choice at a vastly lower cost to the consumer.
Most consumers do not miss DVD's or CD's, although you still have a sizeable community of collectors that justify the physical media remaining in existence.
At the start of this generation, what was all the rave about? Hardcore gamers did not want digital. Yet today, there are benefits brought about by digital that for some outweigh going to a brick and motar store or ordering a copy off Amazon. This is something that is seen with how much market share is being taken over by digital purchases.
Streaming is not going to get rid of game sales, not for some time. But with tech getting better, and with 5G being upon us, there are ways in which companies could leverage tech to capture vastly more people than were possible. Use that mass market appeal to drive costs lower so that they can retain as many monthly users as possible. I cannot see a world where this is a bad thing for the consumer.
What you have is people talking about how games will be devalued. It is nonsense. The value of a product is defined by the markets, and how much people are willing to pay. If people gravitate more towards subscription services, then what does that tell you?
Not sure where you're going with this but games will be devalued as individual products.
If I used to spend $60 to play one game and now I pay $60 to play 100 games it's literally dropping the relative value of the perceived price of a single game. It's as textbook an example of devaluation as you can get. As stated in the article, when that happens CEOs will adjust the investment they place in a single game to reflect the new market value and maintain profit margins. If they aren't making more revenue per game then they will simply make less of a "game".
No I'm not the one making presumptions. Im observing the objective impact game subs have had on consumer behavior. Your presuming, without any trends to support your argument, that gamer behavior will make an about face and shift to resemble that of video and music consumers, despite the trajectory and business models having been completely different all along. And your predicting that game companies reaction to this shift in consumer behavior will be more drastic and draconian than what has happened in film and music, despite game companies having no financial incentive to react that way.
The art of selling a film or song is not at all like selling a game. There's no film/music equivalent to a multilayer playerbase, an expansion pack, a season pass, an achievement/trophy, etc
First of all, the traditional sales model for movies and music died long before subscription services became ubiquitous. This was because of rampant piracy. Subscription services emerged as a way to compete with pirates while still turning a profit. So the argument that sub services caused traditional sales to suffer is based on a demonstrably false premise.
Gaming, isnt remotely as impacted by piracy, and traditional sales are running strong despite the emergence of subscription services and this trend shows no signs of stopping.
Yes there will be some consumers who are content to play only what's on the sub. That's no different that there being consumers who only buy used games or only play COD. But there will still be customers who wont wait for their favorite franchises to arrive in the sub. There will be customers who get introduced to a franchise because it's on the sub, who go on to buy other entries that arent on the sub. There will be customers who buy a game when it leaves a sub because they like it so much. There will be customers who buy DLC for games they play in the sub, who then buy the game to protect that investment. There will be customers who will only ever buy games traditionally. There will be consumers who use the sub just to test games they are interested in buying. There will be customers who buy physical out of preference or necessity. Publishers and platform holders will still want to extract as much value as possible out of all of these different types of consumers, so they'll always offer more ways to access games outside of a subscription- it's most profitable to do so. This is part of the reason why they play coy with when/if games will enter the sub and how long they stay.
The music and movie industries arent subject to this multitude of consumer scenarios, so the comparison immediately falls apart.
The biggest flaw in your argument is the idea that as the industry starts to adopt subscription services, this trend would also be coupled with a loss of the option to buy/sell directly. There is not and will be no market pressure to eliminate the option to buy. For someone so adamant that this industry is following music & movies, please note that the option to buy hasnt even disappeared in that sector, so why would it disappear here. There's literally no financial incentive to completely move away from that model, regardless of how popular subscription services become.
Gamepass has been around for 3 years, and the story has been the same... more subscribers has resulted in more sales revenue. It's this bump in sales (no the subscription fees) that makes the Gamepass initiative worthwhile. You keep talking about other industries - ignoring the facts that 1) subs aren't what tanked movie and music sales im the first place and 2) the depth of engagement with games is not comparable to that of passive forms of entertainment.
Gamepass exists in this form because this is the form that maximizes their sales revenue potential. Relying solely on subscription revenues will never be financially more attractive than offering traditional sales along with the sub.
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Did you read the article?????
I'm not the one saying this, every industry expert, analyst, and worker from the Devs up the CEOs is saying the same thing. Seriously did you read the article?
You can't train consumers to expect things on subscription for an entire industry and still expect them to pay premium prices for a single piece of content. Once that expectation is set industry wide that will affect consumer behavior. You keep trying to reference 1 platform holder with one service that's been out a very short time, which even in that time we have seen both the growth of new sub services and consumers saying they are more hesitate to but full price games.. tUnless you're argument is that all these publisher executives are wrong and have no idea what their talking about....
- But game makers speaking with Business Insider tell a different story: "What happened with the other industries is big checks were written for a while until the platforms didn't need the content creators anymore," one game publishing executive said.
- Platforms like Microsoft's Xbox Game Pass need that content to draw in subscribers, but the long-term effect could be dire for the industry: People stop buying games directly, and start paying for subscription services instead. "It's an offer you can't refuse," another studio executive told Business Insider. "If you destroy the system of purchasing and replace it with a subscription model, then the subscription model is all that's left. It's just Netflix and Blockbuster; instead of renting per video, you're paying for subscription services."
- These subscription services could mean the end of the traditional direct-to-consumer sales of individual games, where the sales trajectory over time looks like a downhill slope with a (hopefully) long, tapered decline. "We just adjust to the new paradigm," that studio executive said. "We have to make sure we have our profit margins up front. If we do a Game Pass game, we have to build our margins into that.
Idk how people waiting for games to appear on Gamepass is any different than people waiting for games to show up on PLUS or games with gold?
Subscriptions work in music and TV/movies because lots of people started pirating that kind of content, there was no barrier to entry to consume that content (billions of people own phones now that may not have had that access 20 years ago), and each song or album has never been an ongoing piece of software that is updated and has costs (servers in multiplayer games).
People are currently still mostly buying games, especially on consoles. And you still need to invest considerable money for a console. But services like PS Now and Game Pass might change that for the worse.
These services will just mean more microtransactions in games. If you used to pay $60 for a game before and now you're paying $120 for a year of 100 games, then developers will need to make the same amount they used to. There's no way Microsoft will give publishers the same amount of money that they would have been paid if you're saving money. There isn't the same level of scale that there is in music and video.
People are currently still mostly buying games, especially on consoles. And you still need to invest considerable money for a console. But services like PS Now and Game Pass might change that for the worse.
These services will just mean more microtransactions in games. If you used to pay $60 for a game before and now you're paying $120 for a year of 100 games, then developers will need to make the same amount they used to. There's no way Microsoft will give publishers the same amount of money that they would have been paid if you're saving money. There isn't the same level of scale that there is in music and video.
because it was 2 -3 games a month, not hundreds. The likelihood of a game or even many the games you would have purchased ended up being free would be very slim.
Are there anyone still holding off purchase of games for a chance of them to appear on PS+/Gold? Quality of games on Gamepass and PS+/Gold are miles apart. You're not getting something like DMCV or KHIII on PS+ free game anytime soon if ever.
I think there are a lot of valid concerns surrounding Game Pass and it's effects on the industry but they surely don't match most of the posts in this thread, that was a hard read jesus just straight up gave it up during the first few pages
There are people who share games. There is a whole used game market where a single game is sold several times over.
This is a market that publishers have had an issue with and used all sorts of propaganda to try and fight.
Then you have evidence that shows that most games bar sports titles or Nintendo games (and this is because Nintendo does not have huge competition from AAA games) devalue a few months after release. What causes that drop in price if not competition from newer games, or declining sales such that a drop in price is an attempt to stimulate the same?
Those hundreds of games you get to play on a subscription model, how many of those are selling at a great level or even at full price? Some are early gen games, some are last gen games, some are newer games that have had their run at $60, dropped prices, seen sales tank and the money from the service is welcome.
What the subscription service does is spend money on those. Give then a new lease of life, have some games launch day and date. If it is cheap enough, it guts retail (already happening before with digital distribution), it will eventually gut used game sales, and it becomes so cheap that waiting to share games doesn't make sense. Its mass market appeal if that ever happens ensures that you can take less money off consumers and still make a lot of money.
It is as if people do not understand mass market dynamics.
Today? No though I won't lie I was excited to download that Cthulhu game the other day on Xbox because I would never have taken the chance with a full purchase of it.
But there was a time that was the sentiment here.
Ofcourse I've read the article. It's features the opinions of a few analysts and insiders I disagree with. There have been articles from CEOs analysts and insiders who have the complete opposite opinion. What makes this article gospel? What's your basis for saying everyone in the industry shares this opinion?
Consumers aren't trained to expect things on a sub for this entire industry. This is Hyperbole. That might be true of music industry, where virtually every release hits the subs, but in the gaming industry, the vast majority of games released never appear on a sub. most of those that do, appear after their prime and only for a short time. A game making appearance on a sub is the exception, not the rule.
We've seen the growth of new sub services being accompanied by sales growth, and we have anecdotes about more people being hesitant to buy contrasted with data that says more purchases are actually occurring. I respect the opinion of these dissenting executives, but I think those who objectively look at the numbers are coming to different, and imo more accurate predictions and conclusions
My response here would be, how likely is it that all platform holders stop needing the content creators? Nintendo doesnt really need 3rd party, but Steam, Xbox, Sony, Epic and all of the smaller platforms certainly do. Out of these, only Epic, Sony and Xbox make their own games, and none could ever make enough games on their own to sustain a subscription service AND offset losing royalties from 3rd parties . These 3rd party royalties are the lions share of their revenue. This is very much unlike Netflix, who gets all of their revenue from the subscriptions.
This particular publishing executive is comparing apples to oranges. With TV streaming, the platform holders create so much of their own content they don't need to pay content creators and they can live off of subscription fees. Within the games industry, the platform holders not only rely on third parties for content but they live off the 30% royalty tax on 3rd party sales revenue - the subscription fee revenues will never never be able to offset losing those royalties.
Your talking about two drastically different business models and irrationally speculating that they are beholden to the same trends despite literally all of the evidence suggesting otherwise.
To this I say, the paradigm shows no sign of shifting.
People generally haven't stopped buying games directly:
Steam is massively more popular than Gamepass PC, EA Access and Uplay subs. People that use these subs still buy stuff.
Gamepass has existed for 3 years, and games that show up on the service are still getting a sales boost. Sequels that launch on the service are still outselling predecessors that didn't launch on the service. Xbox store is still the primary revenue driver. MS will never have a financial incentive to replace their store revenues with a complete reliance on sub fees.
Theres literally no indication that platform holders must adopt subscription services in order to compete - most are doing fine without one. And of those that do have a service, there's no indication that subscribers generally value ownership any less or that platform holders value sales revenue any less.
He/She is right that IF the paradigm shifted they'd have to adjust. But I see no reason to believe it will shift. A lot of consumers still see value in ownership even if that comes accompanied with the option to access some games via sub. Publishers and platform holders have intentionally designed these programs so that subscribers will still see value in buying stuff - because sales are where the profits are. This is VERY different from the music and movie industries where publishers know that if you aren't subscribing you're getting your music for free (illegally) .
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If Sony and Nintendo or any other company wants to be relevant in Cloud Gaming, then they will need to use the Netflix model to gain market share. No one beyond Consoles and PCs will be willing to pay $60 for a game. Stadia is an example of this. The problems of $60 Cloud games don't apply to just Stadia, they apply to all companies wanting to complete in this field.
That's why we are seeing more companies shifting to the Netflix model. $60 is hard to swallow for Mobile gamers.
That's why we are seeing more companies shifting to the Netflix model. $60 is hard to swallow for Mobile gamers.
Yes, there are concerns and then there are references to poison, plague and death without any details. People should rather voice those concerns and fears rather then just spreading them.
GTA scale games can make their own market and rules and won't be beholden to subscription unless the publisher can see a benefit