The Pros and Cons of a Subscription model in Gaming

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The Gaming industry saw a multitude of subscription announcements in the past few months. E3 2019 saw three huge game companies announce their subscription services for gaming. Google, Ubisoft and Microsoft all came forth to announce their subscription passes for gaming. They join established players such as Sony’s PlayStation, EA Access and Origin Access. The move towards a subscription-based revenue model is happening right now and there is little that can be done to stop it.

But do we really want to avoid a subscription-based gaming model? Surely there are advantages in such a model which will lure gamers in the first place? Let’s take a look at some of the pros and cons of a subscription-based model.

Pros

The Subscription based model is primarily a huge advantage for the provider. Large companies can rely on a fixed revenue from monthly subscriptions which will boost their revenues significantly. This system is much more reliable and financially lucrative than relying on sales of game releases.

Playstation Subscription Image
PlayStation has its subscription model for a long time

Game releases inherently are unpredictable in nature. While developers are well-respected and talented, it does not mean that they can capture the casual gamer’s aptitude in the best possible manner. There might be things in their new game which are utterly broken but did not come forward in playtesting and the beta phase.

In today’s age, most games release their open beta version as the ultimate release of the game. With a large number of the community playing these open beta’s, it feels quite similar to the actual release of the game.

Having a subscription model has many benefits. Some of them are good enough to possibly move to such a model but hold your decisions till we actually check out the cons.

Minimal investment, but experience the full game

Ubisoft Generic Image
Ubisoft announced its own subscription-based model at E3 2019

Subscription models essentially start out at a very small monthly price. If we take a look at some streaming services, the average price for video streaming is $10/ month. This is not out of the reach for the ordinary customer and he will not think twice before paying the amount.

The lure in such a system allows the customer to play a fully released game by just paying a small subscription amount. If the game in question is a well-developed game, he can continue playing the game as he wishes. However, if the game did not live up to his expectations, the regret is not as high as it would have been if he had bought it for around $60. 2017-18 saw many disappointing game releases and some of these games were highly anticipated in the industry.

A subscription model would have reduced the financial cost of trying out a new game for gamers. It definitely helps in awarding merit over good advertising.

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A Game Library at a Low Cost

Analogue Game Libarary Image
Players can access a large number of games at a low fee, some of which they wouldn’t have bought without a subscription

With a subscription, we’re able to see the kinds of games customers like to play most regularly, and the kinds of experiences within games they might want to play more frequently. By virtue of that, we can try to tailor an offering where we can provide types of games experiences that might be more relevant.

The subscription model relies on providing users with options. Some models provide a smaller number of games but of extremely high quality. Some other models provide a huge catalogue of games for the customers. The customer is often spoilt by choice due to this large number of games in his library. The service further tailors the experience by suggesting new games based on the player’s preference and history.

More Information About Playing Habits

The Subscription model provides a lot of data to the game developers. They can pinpoint occasions when the player stops playing the game. Other data such as most used weapon choices, in-game choices, game modes all provide a direction to the developers. The can curate the future update patches to appease the player base and provide them with features that they would like.

Information flow to the developers is instantaneous and it can contribute immensely to route the game updates take. In games such as Counter-Strike and Dota 2, we have seen the in-game data assuming more significance for Valve than the demands of the vocal community. Public forums such as Reddit comprise just a small part of the overall gaming community. Data from within the game is much more accurate and a true representative of the entire community’s wishes.

Cons

Price

Netflix
Netflix recently increased its price in the US

An individual subscription model sounds very cheap on paper. After all, $10 / month is not much compared to the price you would pay for a new game. However, at the same time, it is also something that can truly provide a firewall to the public. There are instances when a user does not want to pay $120 / year on games. Some users just want to buy 1-2 games per year and play those games when they have the time. The pricing of the subscription model will often decide the future of the system.

Right now, the pricing is all over the place. Some subscription models focus on streaming such as Google Stadia. Others focus on downloading games from the respective developer studios.

Less Overlap; more Cost

Xbox Game Pass
Xbox Game Pass is now available for PC, a move to capture the burgeoning yet untapped PC market

The subscription models in the market today do not offer an overlap of games. Studios such as Xbox, Ubisoft and others often have a very different game catalogue than their counterparts.

For a user, this can turn to be problematic, since he would need to invest a lot more per month. Subscribing to multiple services could mean expenditure of nearly $40 per months. This turns out to be costlier in the long run.

Prices Will Increase in the Future

Although Gaming subscription has been around for a long time, it is only very recently that the business model is taking off. Taking cues from Netflix and other video streaming services, the gaming industry seems to be the next battleground for online subscriptions.

The introductory nature of the business right now means the prices will be low. It is a way to gets users hooked to the model and keep them within the system. However, once we reach a significant size in the number of subscribers, these companies will increase their prices. Even a small increase in the cost per month would have a profound effect on the overall bottom line of the company. For a user, a small increase might not seem a lot, but it will slowly eat away at your expenses.

The Future of Subscription

Subscribe button
A subscription-based revenue model is the future

The Gaming community is already prone to accepting the subscription-based revenue model. A recent Deloitte study shows that nearly 30% of the gamers in the US currently have a running subscription.

Subcription Fatigue vs Advertising aversion
A graph of the subscription fatigue amongst different type of gamers. Image Credit: Deloitte Insights.

As we can see above, console gamers and players on multiple platforms have high fatigue when it comes to the subscription model. However, console gamers are used to having a subscription model.  This is mostly due to the fact that PlayStation and Xbox feature subscription models for years. On the other hand, PC gamers who have less experience with a subscription model are not averse to trying it out. This might be one of the reasons why Xbox Game Pass was announced for PC at E3 2019.

The industry is already moving towards a subscription-based model. There will be a tipping point when the benefits of a subscription model will outweigh the games on offer and their quality. In addition, we will see more subscription services come out in the future. This will further create a divide in the industry and a customer will be unable to find multiple good games on one platform.

How much would you be willing to pay for a multitude of gaming subscriptions? DO you prefer the subscription model or do you wish to buy your games outright? Should companies adopt a ‘rent-to-ownership model’ where you can own the game after a period of monthly rentals? Let us know in comments below.

 


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