A subscription service that could be considered the Netflix equivalent of video games seems unlikely at the moment, according to an analyst at Ampere Analysis.

Piers-Harding Rolls, an analyst at Ampere, gave a presentation at the Game Developers Conference (GDC), in which he talked a lot about Microsoft’s monthly subscription service, (Xbox) Game Pass. According to him, subscription services account for only 4% (yes, FOUR!) of the games market, but this could rise to 8.4% in five years by 2027. While this is still a tiny share, it is still a considerable amount financially.

There are relatively few games on Game Pass, and the growth rate has not been significant recently. When EA Play joined last March, the Redmond-based company’s subscription service has had around 500 games. Its success is mainly due to the relatively new games (especially compared to PlayStation Now, where Sony offers more games, but they are not as fresh as those available through the ‘greens’ service).

Harding-Rolls pointed out that Netflix started small but now has over 200 million subscribers. But there is a big difference between video games and video content. Games now make more money after people play them. According to Ampere’s data, 79% of player spending on free-to-play and paid games in 2021 came from in-game (micro)transactions, and there is no such thing in Netflix or Spotify.

He added that those who subscribe also spend more on average on full games, accessories, microtransactions, and season passes on top of the subscription fee. According to him, it is partly due to people who play a lot and partly due to the influence of services to make people spend more. One of the biggest reasons may be that subscribers have already spent on the service, so they have a justification for trying new games. According to Harding-Rolls, subscriptions will not become the dominant monetisation model in the games industry in the way that it has gradually developed in the video and music sectors.

So, while he believes Game Pass (and its rumoured Sony rival Spartacus?) will expand, there will not be such a dramatic change in the proportion of total games sold in stores/digitally.

Source: PCGamer