Microsoft’s Xbox Game Pass often gets called the Netflix of gaming. With more than 25 million subscribers and enough traction to reportedly convince PlayStation to bring its own Game Pass-like service, the future of gaming may as well lie in subscriptions. One analyst however begs to differ.
Speaking at the Game Developers Conference 2022 (via PC Gamer) earlier today, Ampere Analysis’ research analyst Piers Harding-Rolls expressed skepticism about subscription services becoming “the dominant monetization model in the games sector as it has done progressively in the video and music sectors”.
Harding-Rolls admitted that gaming subscriptions are rising and will be more than double by 2027 to account for around 8.4 percent of the total games market. That number will be still a drop in the ocean when comparing subscription revenues with traditional monetization means in games.
Harding-Rolls explained that according to data researched by Ampere Analysis, players spend more on games after purchasing/playing them through expansions, season passes, and in-game microtransactions. 79 percent of total games spending in 2021 was from in-game purchases alone.
Harding-Rolls continued that Netflix and Xbox Game Pass are two different monetization models for two different categories. The most revenue made with games is after they are purchased and played, not when they are purchased. Netflix on the other hand does not include a feature to purchase something while watching a television show.
Hence, the reason why people should stop expecting Xbox Game Pass or similar gaming subscription services to take over the gaming industry in the future.
On the subject of Xbox Game Pass being a need of the hour for game publishers, Xbox chief Phil Spencer stated earlier in the year that “the right answer is allowing your customers to play the games they wanna play, where they wanna play them and giving them choice about how they build their library.”
Spencer also welcomed the idea of PlayStation rolling out its own Game Pass-like subscription service. Sony is reportedly overhauling its PlayStation Plus as a multi-structured subscription service codenamed Project Spartacus that is close to launching.
