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NPD analyst Mat Piscatella: The risk of subscription is in the potential devaluation of content

stormfire

Member
Nov 26, 2018
238


It will be interesting to see whether the risk of devaluation will become a reality and have a significant impact on the industry.
 

Zedark

Member
Oct 25, 2017
9,495
The Netherlands
It's the GEARS 5 debate: retail and digital sales were way down, but number of players were way up. Engagement will become even more important, as close to all revenue needs to come from consumer spending other than upfront payment. The subscription fee for being on it will most likely not cover more than a fraction of typical full game sales.

For subscription service owners, there is, additionally, the income to be made from subscriptions, and questions surrounding that are: how long do people sub for? Do they use your subscription service as a cheap way to play the occasional game or do they stay subscribed? This again ties into engagement, of course. If you can't bind them long term, then you lose the advantage of the subscription service income model and are basically giving away your games for cheaper prices.
 

Mollymauk

Member
Oct 27, 2017
1,154
Yes, just look at tv. They just aren’t making new tv shows anymore since Netflix devalued them.
 

Complicated

Member
Oct 29, 2017
2,592
I don't feel like there's much margin left for subscriptions to take and free to play games are still doing this work on consoles while subscription services seem to be re-valuing games on phones after free to play almost completely devalued them.
 

Bosch

Member
May 15, 2019
633
Well for single player games(90% what I play) I agree...

to be sustainable in subscription services only with gaas elements.
 

jeelybeans

Member
Oct 25, 2017
3,095
I feel like the problem is no one can get invested in multiple service model ecosystems. Time becomes the constraint then. I can play Final Fantasy XIV as my subscription/optional store consistent whale spend. I am invested in that economy. Then I play a bunch of single player games in between. There's no way I can get into another live service.

In such a case, publishers and devs would lose a lot of money off of me having a subscription model, unless the cost of a subscription was equivalent to my current physical spending habits (approx 1 game a month). But if that were the case, it would price out most people and the subscription service wouldn't take off.

It's just not sustainable. It isn't the same thing as TV and music.
 

-girgosz-

Member
Aug 16, 2018
595
It's the GEARS 5 debate: retail and digital sales were way down, but number of players were way up. Engagement will become even more important, as close to all revenue needs to come from consumer spending other than upfront payment. The subscription fee for being on it will most likely not cover more than a fraction of typical full game sales.

For subscription service owners, there is, additionally, the income to be made from subscriptions, and questions surrounding that are: how long do people sub for? Do they use your subscription service as a cheap way to play the occasional game or do they stay subscribed? This again ties into engagement, of course. If you can't bind them long term, then you lose the advantage of the subscription service income model and are basically giving away your games for cheaper prices.
Way up? Gears 3 sold more than 3 million 1st week. Gears 5 had a lower number of players with 1$ Subscribtions. Besides, engagement doesn't look that great at all. It's only the 26th most played game on Xbox in the US.
 

cakely

Banned
Oct 27, 2017
8,056
Chicago
Mat's just repeating what most of us already know.

We already pay so little for so many hours of gaming, but subscriptions like Game Pass take it to an entirely new level.
 
Oct 29, 2017
3,668
He's absolutely right of course, but this is the video game industry and it has absolutely no concept of long-term planning whatsoever.

This is the industry that happily destroyed its consumer's sense of value with the mobile gaming sector. An industry that happily threw a middle finger towards Satoru Iwata when he warned everyone about what was about to happen from what they were doing and offered an olive branch as an out from that timeline.

This is their bed that they've made. Now they have to lie in it. I have no sympathy for the publishers responsible for this (May God have mercy on the poor indie developers that are gonna get completely annihilated by these services though).
 

shaneo632

Member
Oct 29, 2017
12,665
Essex, UK
Yeah it definitely gives me a more casual approach to some games. Like the new NFS, I played for 3 hours and moved on. I was like "yeah I guess it's fine for a sub game, but I'm not fussed."

I wonder if that will just make devs of mediocre trash more complacent.
 

DigSCCP

Member
Nov 16, 2017
1,380
Wonder if people why keep using the previous Matt´s comments about GP as fact now.
 

Fisty

Member
Oct 25, 2017
5,939
But we (consumers) actually win for a while, which is why it's so appealing/dangerous.
True enough. People saying "I dont even buy games anymore thanks to Game Pass" is exactly what MS wants for the next 3 years while they build up the sub numbers. Makes it 1000x harder to cancel the sub if you havent bought any games in 3 years
 

Bold One

Member
Oct 30, 2017
7,934
He's absolutely right of course, but this is the video game industry and it has absolutely no concept of long-term planning whatsoever.

This is the industry that happily destroyed its consumer's sense of value with the mobile gaming sector. An industry that happily threw a middle finger towards Satoru Iwata when he warned everyone about what was about to happen from what they were doing and offered an olive branch as an out from that timeline.

This is their bed that they've made. Now they have to lie in it. I have no sympathy for the publishers responsible for this (May God have mercy on the poor indie developers that are gonna get completely annihilated by these services though).
Who is "they" who are you talking to?
 

Dyle

The Fallen
Oct 25, 2017
9,208
Wisconsin
Game subscriptions allow you to play more and pay less, eventually something will have to give. I've spent maybe $400 total on games software this year (including an Amazon Prime sub) and have played around 50 games for the first time, that's simply not sustainable in the long run
 

Noble

Member
Oct 27, 2017
655
And in this race, we all lose. But hey at least it will be cheap
In what ways do I lose if I have more options to choose from and I can afford to play video games I wouldn’t be playing otherwise. Is it worth it to pay 70 bucks if I only play 3h a month? Well, sure it’s worth 8 bucks for dozens of games to play.

“Oh but you do not own the game” No I don’t. If I feel like I’ll be playing a ton of it I can always buy it and with a discount.

Do we lose because devs will have less money or do cheaper games? I doubt that will be the case. If 8/bucks a month isn’t sustainable when these services start hitting like 20M subscribers, they will rise the price.

This we all lose thing is ridiculous. I do not hear anyone complaining about Netflix anymore. Because it’s. So. Damn. Convenient.

Specially when cinemas charge you 10 bucks to watch a movie. Similar case here. I pay when I want to play, and I do not when I don’t, still have the option to buy full price
 

Ruslnis

Member
Feb 26, 2018
2,396
Some people really believe that extra cheap GP with lots of constant deals and 3rd party games will exist forever
 

pj-

Member
Oct 25, 2017
1,111
AAA game prices drop like rocks after release. Indies and AA games are frequently available at huge discounts in humble bundles or steam sales. Many games are available for cheap on grey market key sites. The content is already pretty devalued to me. I rarely pay $60 for a game these days.

I don't see how subscription services would be any worse as long as the developer gets a decent deal
 
Oct 27, 2017
707
London
I mean yes, that is a risk. Netflix, Prime Video, iPlayer and so forth all *somewhat* show signs of this. There are masses of content on these platforms that are largely ignored if they aren't marquee titles. Even many of their titles that were once considered marquee seem to lose value quickly, it is one of the reasons Netflix are quick to bring down the axe on non-starters now more than ever. Although their catch-22 is almost the opposite to games; it is their 'binge-able ' release model that is very difficult to sustain, but is almost now expected of them. When a company like company like SIE looks at particularly their shorter titles there is the perception change perhaps (warranted or not) that the game moves from 'Blockbuster' title with the price, marketing and sales to match; to something that players don't have as much of a stake in. It is easier to 'throwaway' content included in a subscription, at least, perception wise, than it is to throw away the blockbuster title you spent full-price money on. For some titles , of course the opposite happens and sometimes players engage with and invest their time into content they never would have before but there is a slippery slope wrt perception ('rushing out to the stores to get the game, digitally or physically) or playing for a couple of hours and churning once the new hotness arrives.
 

Fisty

Member
Oct 25, 2017
5,939
In what ways do I lose if I have more options to choose from and I can afford to play video games I wouldn’t be playing otherwise. Is it worth it to pay 70 bucks if I only play 3h a month? Well, sure it’s worth 8 bucks for dozens of games to play.

“Oh but you do not own the game” No I don’t. If I feel like I’ll be playing a ton of it I can always buy it and with a discount.

Do we lose because devs will have less money or do cheaper games? I doubt that will be the case. If 8/bucks a month isn’t sustainable when these services start hitting like 20M subscribers, they will rise the price.

This we all lose thing is ridiculous. I do not hear anyone complaining about Netflix anymore. Because it’s. So. Damn. Convenient.

Specially when cinemas charge you 10 bucks to watch a movie. Similar case here. I pay when I want to play, and I do not when I don’t, still have the option to buy full price
Netflix could produce 20 seasons TV shows for the cost of one AAA game. Gears 5 already has purchasable currency and ads for movies, it's only going to get worse
 
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Wonderment

Moderator
Oct 27, 2017
10,409
Costco did something interesting recently. Aside from the yearly COD installments which always sell well, they decided they are not going to carry physical games anymore. Instead they sell packs of $100 worth of PSN or XBL cards for $90, basically betting that people will either be going mostly-digital or mostly-subscription in the near future. Except that right now you can save more on subscriptions by seeking out other sales.
 
Jan 10, 2019
756
Yeah it definitely gives me a more casual approach to some games. Like the new NFS, I played for 3 hours and moved on. I was like "yeah I guess it's fine for a sub game, but I'm not fussed."

I wonder if that will just make devs of mediocre trash more complacent.
I felt this a few times while I was subbed to GP. Sometimes I was less inclined to commit more time to certain games because a) there’s so much constant content, and b) I had paid without an upfront cost so I had less motivation to see my moneys worth.

Though I am someone that has choice paralysis frequently with big open world games to the point where I can’t be arsed playing them, so I know I’m speaking strictly for myself.
 

InsaneTiger

Avenger
Oct 25, 2017
4,308
True enough. People saying "I dont even buy games anymore thanks to Game Pass" is exactly what MS wants for the next 3 years while they build up the sub numbers. Makes it 1000x harder to cancel the sub if you havent bought any games in 3 years
Then you slowly bring up the monthly price dollar by dollar. People will justify paying a dollar more if the increases are in small increments.
 

Agent X

Member
Oct 27, 2017
851
New Jersey
True enough. People saying "I dont even buy games anymore thanks to Game Pass" is exactly what MS wants for the next 3 years while they build up the sub numbers. Makes it 1000x harder to cancel the sub if you havent bought any games in 3 years
Then you slowly bring up the monthly price dollar by dollar. People will justify paying a dollar more if the increases are in small increments.
This is what I fear could happen to subscription services, if they are not properly managed.

Another possibility is that (to maintain "low" subscription fees) they'll offer fewer games and/or games that are smaller in scope, which could affect overall game development.

It's also possible that they might choose to do all of the above. They'll scale back game development and slowly jack up the price in the process.
 

Reinhard

Member
Oct 27, 2017
3,193
It's only substainable with GaaS and the problem is all the "free" subscription games will be balanced/designed around spending money instead of focusing on actual gameplay.
 

Joseki

Member
Nov 5, 2017
6,412
A 12 hours long singe player game last gen was easily worth 60 bucks to people, now it's perceived as worth maybe half that price.

Content already devalued a lot this gen because of open world filler and endless GaaS.




With the raise of subscription services and creators paid based on play time prepare to be flooded with time wasting mechanics.
 

OneBadMutha

Member
Nov 2, 2017
4,047
Can it change value perception? Sure. For some. Just like game rentals, Game Fly, the used game market and free to play games like Fortnite did. Just like GAAS games devalued single player.

We don’t spend enough time talking about the positive impacts though...such as expanding the market, making a greater variety of genres accessible to a wider audience and an additional weight put towards single player experiences due to the need for new content consisterly.
 

Fisty

Member
Oct 25, 2017
5,939
This is what I fear could happen to subscription services, if they are not properly managed.

Another possibility is that (to maintain "low" subscription fees) they'll offer fewer games and/or games that are smaller in scope, which could affect overall game development.

It's also possible that they might choose to do all of the above. They'll scale back game development and slowly jack up the price in the process.
They will maximize profit as best they can, and with Game Pass being the main focus and model they are re-structuring their output around, it's inevitable
 

Omnistalgic

Member
Oct 27, 2017
3,526
NJ
AAA game prices drop like rocks after release. Indies and AA games are frequently available at huge discounts in humble bundles or steam sales. Many games are available for cheap on grey market key sites. The content is already pretty devalued to me. I rarely pay $60 for a game these days.

I don't see how subscription services would be any worse as long as the developer gets a decent deal
There’s a huge community talking right now about Death Stranding. People have bought it day one @$60 or more. Same thing happened with God of War, same thing happens with RDR2.

there is a very large population of the gaming market that still buys day one. To me it’s similar to going to the movies on release/release window. It’s a different feeling being part of the conversation about the game.
 

Godzilla24

Member
Nov 12, 2017
2,207
Ill let others worry about devaluation of games. Ill continue to enjoy the best subscription service that has ever existed in gaming. Game Pass rocks.
 
Oct 31, 2017
2,431
Of course.

In my opinion, this phenomenon has been happening since the very onset of digital-focused distribution methods, essentially across all forms of content.
 

ShinUltramanJ

Member
Oct 27, 2017
6,704
Oh, I’d say it’s already devalued. Why drop $60 on a single game when you can play hundreds for a couple bucks?
 

ZSJ

Member
Jul 21, 2019
403
As a poor person, I'm OK with this. Gamepass is a savior for those without a lot of money to spend on games. $60 is a lot of money to spend on something I might not even like.
 

bryanee

Member
Oct 27, 2017
1,556
I paid £2 to play Forza Horizon 4 for a month, £2 to do the same with Crackdown 3 and another £2 to play Gears. MS first party games are already devalued for me personally. I have no intention of having a gamepass sub lasting longer than a month and it would be the same if Sony did this with their first party output.
 
Oct 31, 2017
2,431
Oh, I’d say it’s already devalued. Why drop $60 on a single game when you can play hundreds for a couple bucks?
Yes. With games, this really began to happen and take shape with the rise of Steam. But, it's the same across all forms of content creation I feel, not just the video game industry.

This kind of phenomenon is why Martin Scorsese has the thoughts he has about the modern contemporary film industry.

It's actually an incredibly bad problem IMHO, but most people frankly don't care and will just say I'm a hater/out-of-touch/old person/etc. etc., just like they do with all forms of critique such as this commenting on the state of commercial content and the general devaluation of content across the board.