Ampere Analysis: Video game subscription-based services are estimated to only account for 4% of all video game revenue in NA+EU

[jehurey 3,313]

https://www.videogameschronicle.com/news/subscription-services-account-for-4-of-north-american-and-european-game-markets-research-suggests/

 

Subscription services reportedly account for 4% of North American and European game markets

Xbox Game Pass commands a 60% share of the subscription market

 

 

Gaming subscriptions account for 4% of total revenue generated by the North American and European game markets, it has been claimed.

Ampere Analysis research director Piers Harding-Rolls believes subscription services like Xbox Game Pass, PlayStation Plus and Nintendo Switch Online generate $3.7 billion annually.

 

That compares to almost $81 billion generated from other spending on games, Axios reports.

 

Microsoft’s Xbox Game Pass service, which charges up to $15 / £11 monthly and has attracted 25 million members since launching in June 2017, commands about a 60% share of the subscription market, according to Harding-Rolls.

 

While the subscription market is clearly not insignificant and is growing, it appears there may be a misconception among some people about the current scale of it.

Xbox boss Phil Spencer said this month that he’s frequently asked by developers whether their titles have to be on Game Pass to stand a chance of being successful on the company’s consoles.

 

“I also want to make clear to people that are out there that for us at Xbox, there’s not one business model that we think is going to win,” he said. “I often get asked by developers, ‘if I’m not in the subscription am I just not viable on Xbox anymore?’ and it’s absolutely not true.

 

“Like we look at retail of people selling games, buying games, it’s an important part of our P&L [profit and loss statement], you know that. And it’s something that we invest resources in to enable our developers to do great work there.”

 

On Tuesday, Sony Interactive Entertainment announced its expanded PlayStation Plus service, which includes a library of legacy and classic games, among other features.

 

In a GamesIndustry.biz interview accompanying the announcement, PlayStation boss Jim Ryan said he doesn’t think gaming subscription models will ever dominate like Spotify and Netflix do in music and film.

________________

 

 

And this is why Jim Ryan said that he has no need to put his first-party AAA games on a rental service as a day-one release.

 

A big part about the "subscription is going to takeover" narrative just took a big hit.

[Mr. House 3,371]

Old. Someone mentioned this the other day. Just goes to show how overrated the hype around GameAss is. First it's not even a viable or particularly profitable business model and two, it's definitely not taking over the mainstream anytime soon. 

[Remij 4,823]

Subscriptions WILL take over.

 

Nobody said it's happening today or tomorrow...

 

And I like that Jim Ryan also gave a perfect response about why you can't compare Netflix and Gamepass... because gaming is very different from things like Music and Movies.  Which I tried to tell you.

 

Jim Ryan also said the industry is changing rapidly...

 

There's a very clear sign here... that you're missing Jer.  And I want you to know this... Their new "Spartacus" subscription service tiers... is the FIRST step.. in the direction of adopting the GamePass model.  Much like they've taken their first steps with their "PC initiative"... so too have they began their push out into game subscription services.  

[FIREPOWER 825]

The math that Phil and all these delusional lemshits and media influencers have been telling us for the past 4 years doesn’t add up at all.

 

They want Sony to skip retail where 96% of the money in gaming is made to put their super high budget games in a subscription market day and date that only makes 4% of revenue. It’s a completely idiotic idea for anyone with working brain cells and it’s why none of these idiots should ever run their own business.

 

MS put all their games in a sub service out of desperation because lemshits weren’t buying them. They still haven’t posted the profits they make from GamePass (they don’t make any profit). Both Xbox and GamePass are loss leaders and stupid lemshits want Sony whose AAAs are selling 20 million copies a piece and pulling in all kinds of money to follow this loser’s model MS has created.
 

 

There’s a reason the CEO of Take Two laughed when he was asked if GTA could launch day and date on a sub service. Only reason I can think of as to why lemshits and these MS shills in the media want Sony to follow this model and it’s because they want validation. If Sony follows this loser’s model it can help them sleep at night knowing that MS made the “right” decision .

If this idiotic model was so successful not only would Sony follow it but Nintendo and every other AAA publisher would follow suit and start releasing all their big games day and date on sub services but none of them do.
 

 

Not only do videogame publishers not follow this model, none of the major film studios follow this model either except during the pandemic and we saw how that turned out for them, most of them lost money. These idiots should ask themselves why Disney doesn’t launch movies like Avengers on Disney+ day and date, and this is the movie industry where streaming is far far more mainstream.

Edited March 30, 2022 by FIREPOWER

[jehurey 3,313]

3 hours ago, Remij said:

 

And I like that Jim Ryan also gave a perfect response about why you can't compare Netflix and Gamepass... because gaming is very different from things like Music and Movies.  Which I tried to tell you.

 

 

His comparison wasn't to the benefit of gaming subscription.

 

You're intentionally misleading with his quote.

 

He's saying they are different BECAUSE people don't see gaming as a quantity overruling quality. Mass amounts of lower quality gaming does not compensate for the game people really want to play.

Where, people are perfectly okay with getting access to a whole bunch of TV or films, or music, even if they don't get the handful of content that they would really like.

 

I like how you tried to use his quote diminishing the perception of GamePass..........to your favor.

 

Yeah, that's not gonna work.

[jehurey 3,313]

3 hours ago, FIREPOWER said:

The math that Phil and all these delusional lemshits and media influencers have been telling us for the past 4 years doesn’t add up at all.

 

They want Sony to skip retail where 96% of the money in gaming is made to put their super high budget games in a subscription market day and date that only makes 4% of revenue. It’s a completely idiotic idea for anyone with working brain cells and it’s why none of these idiots should ever run their own business.

 

MS put all their games in a sub service out of desperation because lemshits weren’t buying them. They still haven’t posted the profits they make from GamePass (they don’t make any profit). Both Xbox and GamePass are loss leaders and stupid lemshits want Sony whose AAAs are selling 20 million copies a piece and pulling in all kinds of money to follow this loser’s model MS has created.
 

 

There’s a reason the CEO of Take Two laughed when he was asked if GTA could launch day and date on a sub service. Only reason I can think of as to why lemshits and these MS shills in the media want Sony to follow this model and it’s because they want validation. If Sony follows this loser’s model it can help them sleep at night knowing that MS made the “right” decision .

If this idiotic model was so successful not only would Sony follow it but Nintendo and every other AAA publisher would follow suit and start releasing all their big games day and date on sub services but none of them do.
 

 

Not only do videogame publishers not follow this model, none of the major film studios follow this model either except during the pandemic and we saw how that turned out for them, most of them lost money. These idiots should ask themselves why Disney doesn’t launch movies like Avengers on Disney+ day and date, and this is the movie industry where streaming is far far more mainstream.

I've always said since the beginning.

 

L:emming already know that GamePass only exist because Microsoft failed in the retail space.

 

And lemmings are HOPING that Sony fails as bad as Phil Spencer did, simply because they don't want to be the only ones.

[Sabo 449]

Oh, it will happen. It is the future. Don't know how people can deny that.

 

Internet infrastructure is the main thing holding it back right now. When that improves dramatically then a Subscription service will be the norm in like what? 10? 15 years?

 

Not going to happen anytime soon but this outcome really is inevitable.

[-GD-X★ 7,957]

32 minutes ago, Sabo said:

Oh, it will happen. It is the future. Don't know how people can deny that.

 

Internet infrastructure is the main thing holding it back right now. When that improves dramatically then a Subscription service will be the norm in like what? 10? 15 years?

 

Not going to happen anytime soon but this outcome really is inevitable.

I definitely agree with the 10-15 years. 

[jehurey 3,313]

45 minutes ago, Sabo said:

Oh, it will happen. It is the future. Don't know how people can deny that.

 

Internet infrastructure is the main thing holding it back right now. When that improves dramatically then a Subscription service will be the norm in like what? 10? 15 years?

 

Not going to happen anytime soon but this outcome really is inevitable.

streaming intense 4K games, alot of them running at 60fps, with low lag?

 

not only would you need one hell of a major upgrade to the internet infrastructure in the US and other countries, but what's the profit margin on Microsoft having to run that in the cloud for you?

 

The cost of a full-on Xcloud for everybody would be expensive. It sure as hell would raise the monthly cost of the service, and if all games become cloud games..........they're just going to sell cloud version of games.

 

So, for example, instead of paying $20-$30 for a subscription of games, Ubisoft can decide that the next Assassin Creed is a premium game, and they're charge you $40 for 6 month access to play their next AssCreed.

 

So, its just no different than physical retail, except it all went into the cloud, and you don't "buy" a game anymore. You buy "cloud time" to play a game, and you don't own anything in this process.

 

So who does that benefit? Who is the one benefitting under that system?

 

..........the company running cloud servers.

 

Gee I wonder what business the Microsoft corporation is making a large push into, these days.

[Sabo 449]

You're looking at it through the lens of today. That's expensive now, why do you think the technology of today will still be expensive in the future? That's just silly LOL.

[jehurey 3,313]

32 minutes ago, Sabo said:

You're looking at it through the lens of today. That's expensive now, why do you think the technology of today will still be expensive in the future? That's just silly LOL.

computer gaming is the most processing intensive thing that your own computer can do.

 

its also the thing that pushes HDMI bandwidth to its limits, audio bandwidth.

 

So you're talking about putting all of that in the cloud. So the cloud servers are going to have the most cutting edge processors on there, and they will require the most amount of bandwidth out there, if you want millions of people connecting to it at the same time.

 

i don't understand how you think that's going to magically become a cheap thing in the future. unless you expect processing power for video games to just plateau or maybe video games can be designed for servers in which specific things are handled more efficiently, and can scale more efficiently.

 

which is an interesting topic I would be quite fascinated in.  that was kinda the promise with the first Titanfall, was that some calculations were being done in the cloud. Or Crackdown 3's multiplayer would calculate building destruction physics in the cloud.

 

that doesn't really have to do with a subscription model, that's more of a subject about designing video games based on the strengths of cloud computing.

[Sabo 449]

I mean, being faster and more efficient is literally the driving force behind improving technology otherwise there would be no point in improving it LOL... 

[jehurey 3,313]

2 minutes ago, Sabo said:

I mean, being faster and more efficient is literally the driving force behind improving technology otherwise there would be no point in improving it LOL... 

but the expensive part is transporting the data.

 

gaming content that produces the most amount of data output.

 

more than office program data (obviously)

 

more then music audio services

 

more than tv and movies.

 

so the server farm can improve its technology, WITHIN the building.

 

but moving that data into people's homes, is that a good use of America's internet infrastructure, considering how much of it needs to be allocated for HD/UHD gaming?

[Sabo 449]

I did say the internet infracture is what is holding a Subscription service back and that the infrastructure would need to improve dramatically in order for it to really happen, didn't I?

 

I don't know how long that's going to take, I'm just guessing 10-15 years. It could take longer. But it will happen eventually and a Subscription will happen simply for one obvious reason- people love convenience. It's why Netflix and etc. are as successful as they are, they're super convenient.

 

The gaming industry as we know it today will be completely different. It will change and shift because it will have to.

 

Keep in mind, this is the future we're talking about here. This isn't about us, most of us here will be closing in on being 50 years old by this time. We aren't the ones the gaming industry will be focusing on. We won't matter.

Edited March 31, 2022 by Sabo

[Remij 4,823]

4 hours ago, Sabo said:

Oh, it will happen. It is the future. Don't know how people can deny that.

 

Internet infrastructure is the main thing holding it back right now. When that improves dramatically then a Subscription service will be the norm in like what? 10? 15 years?

 

Not going to happen anytime soon but this outcome really is inevitable.

Definitely not 10 - 15 years away.  I think you guys are underestimating just how long that is in the tech world... and just how quickly things can change.

 

I bet Sony changes course either by the end of this gen, or the very beginning of the next.  Like I said... Spartacus was the very first step.  Obviously Sony ain't going to shift completely all at once.

[Sabo 449]

I wasn't just thinking about the development of the tech though, I was also considering how long it would take to implement that tech across entire countries. That isn't exactly an overnight process.

[TLHBO 2,212]

If you look you'll see that nobody cares about a  gaming subscription service other than the faction whose manufacturer has put all their eggs in the subscription service basket and gives them nothing else to play. None of them ever asked for nor cared about a subscription service prior to the said manufacturer announcing one.

 

I wonder why

[jehurey 3,313]

1 hour ago, Remij said:

Definitely not 10 - 15 years away.  I think you guys are underestimating just how long that is in the tech world... and just how quickly things can change.

 

I bet Sony changes course either by the end of this gen, or the very beginning of the next.  Like I said... Spartacus was the very first step.  Obviously Sony ain't going to shift completely all at once.

Jim Ryan has most definitely shut the door on that for the rest of this gen.

 

basically what I am hearing is that people will only FINALLY adopt gaming subscriptions if you forcibly remove all other options.

 

I think profit margins have something to do with that.

 

Sony is definitely not changing course by the end of this gen. the introduction of this tiered PS+ service during Year 3 of the PS5 is all he's going to do.

[Sabo 449]

When the internet infrastructure finally gets good enough to support it, why do you guys think MS, Sony, and possibly Nintendo are going to be the only players in this space? 

 

The gaming landscape is going to change. The streaming juggernauts of today are going to get in on this.  Netflix and etc. expanding and incorporating games into their service is highly likely. If you're a big fish in the gaming industry (Capcom, Square Enix, Bandai Namco... etc.) then you're going to be HIGHLY sought after. We're talking contract deals that are in the billions very much like the Cable TV deals of today.

 

Ya'll are thinking too small scale...

[Mr. House 3,371]

The problem isn't really the technology, you can simply install your games on your device and run them natively. Unless I'm wrong on this, Gamepass isn't a pure streaming service like Netflix as far as I know. I guess if you didn't need an expansive device because it was a true streaming service that worked perfectly it would be more popular but not much point talking about this right now when we saw how big of a flop Stadia was and how slow Gamepass is growing. Seem like current consumers doesn't give a fuck.

 

The problem is MS business model of releasing high budget games day one on their service. It's not a good business model unless you have a huge active 100m+ userbase. Sony or Nintendo literally would go under if they went that route right now as all their first party would generate a lot less profit, possibly losses even. MS was literally losing money on Gamepass for most of it's lifespan so far and still do if you consider they had to buy Activision and Bethesda to increase their day one portfolio. I have no idea how they are even expecting good ROI with Gamepass for two giant publishers. They're gonna have to sell those games full price on the competitors platform to help them turn a profit. Not a good business model, no exclusives content to differentiate yourself from the competition and a lower ROI. What a shit show, you don't do that unless you are desperate and at a distant third place.

 

Also, imagine if most big publishers goes that route, the competition is not going to help. EA is already doing it, and they could very well do things like keeping timed exclusives on their own service, which would hurt Gamepass or Sony service and would divide consumers across multiple publishers. So at the end of the day, no one can possibly reach the userbase required to turn a profit out of day one games. Not anytime soon anyway. I mean look at Netflix and other streaming services for movies, besides netflix, disney + and amazon, the other ones aren't that popular. The competition is tough, look at how Netflix had to change their business model and make more exclusive content when Disney decided to pull off their IPs from Netflix. If the gaming market turns like this it's going to suck ass for consumers and publishers, everyone loses.