Has subscribing to games become a new fad? Maybe not yet, but in the not too distant future, if things continue to move in the way they are now, subscribing to games seems to be really popular.
Today, people get games the same way they used to — buy them outright, or download them for free. But at the same time, big companies are promoting their own subscription products. Google launched Stadia Pro, Amazon launched Luna (similar to Prime Gaming, formerly Known as Twitch Prime), Apple launched Apple Arcade, and from EA Play and Ubisoft+ to PlayStation Now to Xbox Game Pass, subscription game products abound across the industry.
Xbox Game Pass (XGP) is one of the best. From April to September 2020, before the xbox series X and S launched, the number of XGP users surged from 10 million to 15 million, an increase of up to 50%, and in the following months, the number of users continued to grow, exceeding 18 million by the end of January 2021. While Microsoft no longer publishes sales figures for Xbox consoles, the number of XGP subscribers already exceeds a third of the number of PS Plus subscribers. You know, Sony's PS Plus membership has only reached 47.4 million this year, which is already a major success. Overall, as of this year, Xbox Live has about 100 million active users, Steam has more than 120 million active users, and PlayStation has about 114 million active users. In short: 18 million out of 100 million people are subscribed to the game. Much? Loads.
The reason for this early success (gradually rolled out from mid-2017) is obvious: XGP is very cost-effective. Now, for $14 a month (about 91 yuan), you can get Xbox Live Gold's online features and free monthly games (it's worth noting that last month Microsoft suddenly raised prices sharply, and then the market response was fierce, and finally had to withdraw the decision to raise prices); plus EA Play's 84 games and a 10% discount; plus XGP itself has more than 400 games - there are more than 300 games to play on consoles and more than 200 to play on PC and discounts on XGP game purchases; the latest first-party Xbox games; and finally, more than 200 games that support streaming to mobile devices. Someone once calculated that the subscription fee for Xbox Live Gold and EA play alone will reach about $120 a year, and if you count a blockbuster like Halo Unlimited, a new game will cost $60, and there will be two or three in a year. XGP, which includes all of this, costs only $150 a year, which is a good deal for most people.
The thing is, XGP is so cheap that some people worry that it's too good to be true. It's understandable that people feel a little uneasy when new, structural changes happen quickly, and even more upset when they happen to be worth the money. From the people who make the games to the people who play them, from the developers to the publishers, to the platforms, to the players, there is always something to worry about in such a long process.
The most widespread among these concerns is the notion that XGP in its current form is clearly unsustainable and that for a refined game, the meager $15 a month revenue cannot support its production costs. Jim Ryan, CEO of PlayStation, made this concern clear, "For us, having a bunch of games doesn't define a platform. ”
"Our slogan is 'New Game, Great Game'. We've had this before – we won't add newly released games to our subscription model. The development of these games cost millions of dollars, well over $100 million. We just don't think it's sustainable. ”
This problem has not been solved. A few days after Ryan was interviewed, Microsoft released a figure of 15 million users, showing an unusual openness, but also a bit defensive. We all know that XGP is at the heart of Microsoft's Xbox initiative, but there's reason to say it's more important than we think, and you can expect Microsoft to be very optimistic about it.
PlayStation Now interface
However, this concern has proved difficult to shake off. So, well, is XGP sustainable? Are you sure?
Well, XGP is indeed very sustainable, but to understand why, first know what it actually is and what the real goal of Xbox is. The XGP we see now is distributed through living room consoles and gaming PCs, and in fact its final form is completely different from the current one.
First, as Niko Partners analyst Daniel Ahmad put it, Xbox is "in the user acquisition phase," which is why we're still seeing those "ridiculously generous" $1 quotes for 3 months designed to attract users. Once these people join, there are already others who have proven that they will stay.
Daniel Ahmad's Twitter profile picture
Daniel Ahmad has previously said, "I think the key selling point of Game Pass is the sheer volume of game libraries, which plays an important role in the stickiness of the digital ecosystem to users." So once people have XGP's library of games, they're less likely to cancel their subscriptions, and they'll continue to subscribe for years to come, so they can maintain their library of games and access the games they want at any time. ”
Gaining the motivation of users means the power of scale. Scale is at the heart of this generation of Xbox plans, and if they can do it, it can be said to be for the foreseeable future. Similarly, some people hear phrases like "user acquisition" in Silicon Valley and think of services like Uber, DoorDash, or Deliveroo, similar industry disruptors focused on changing the way products are distributed, and years after "scaling up," these services are still consuming cash from venture capital. But the difference in Game Pass is that as the Size of The Game Pass service increases, costs don't grow at nearly the same rate — at least in theory.
For Game Pass, Microsoft's costs are mostly upfront — for example, "more than $100 million" jim Ryan mentioned for developing a AAA game, or $7.5 billion for Microsoft's acquisition of developer and publisher giant ZeniMax Media. Each time a new user joins, Microsoft is not responsible for it. These huge expenses also shrink a little when compared to the actual revenue Microsoft gets from users. Some very rough math: If 18 million people use the cheapest subscription fee and only pay $10 a month, microsoft will also receive $180 million a month, or $2.15 billion a year, if they all stick with it.
Microsoft's acquisition of Bethesda is the second-largest game acquisition ever, but Game Pass could pay it back in a few years.
The next question is not the profitability of game Pass, but how much money it can make for Microsoft. In fiscal 2020, Microsoft's total gaming revenue grew 2 percent to $189 million to around $9.6 billion. Ahmad estimates that in order to be profitable, Microsoft "may want to get more than 50 million subscribers." That's a staggering number, but considering that PlayStation Plus currently has more than 45 million users, which, as Ahmad puts it, is "doable," assuming they sell enough consoles. ”
Considering that the Xbox series X and S sell a little less than the PS5, this may be a bit worrisome. But you may have missed a point, for Xbox, the goal of this generation is to "go beyond consoles," as Ahmad puts it, "to really reach as many mobile and PC users as possible." ”
Ben Decker, head of marketing for Xbox Game Services, similarly said: "Our Xbox Game Pass has really achieved our goal of reaching more than 3 billion players worldwide. We are building the future little by little with this idea. In addition, Sarah Bond, vice president of xbox game ecosystems, has expressed the same view.
Of course, Decker and Bond are really alluding here to xCloud, Microsoft's ambitious game streaming service, which is included in the $15-a-month XGP. Currently, the xCloud beta is available on Android phones, and in the spring of 2021, it will be introduced to iOS systems and Windows 10 PC systems. According to Phil Spencer, head of Xbox, in an interview with the Verge, it will be used on smart TVs "for the next 12 months from November 2020," "I don't think there's anything that will stop us from doing that." ”
Cloud gaming is the trend of the future, but it is also now at the forefront of Xbox marketing.
Perhaps there is also a blockage, the most important thing for Microsoft to make xCloud work, the most important thing is infrastructure, but this is largely beyond their control. The spread of 5G has been rather slow, and streaming services like xCloud are only likely to succeed in some developed regions, while it also faces competition from Google and Amazon. It is estimated that 5G will not be truly widespread worldwide in the next 7 to 10 years, and at the same time, mobile phone networks will also be closely integrated with hosts.
In view of this, Microsoft has launched a layout in some parts of Asia. For example, Xbox has partnered with SK Telecom, South Korea's largest wireless carrier, which will launch 5G in South Korea. You may have seen an ad for esports legend Faker Lee Sang-hyuk and star Son Heung-min playing Forza Forza on their Samsung phones. SK Telecom takes care of all the marketing, which means Xbox can sit on the back end and the service is aimed at a huge user base. It's a rather ingenious way to quietly attract waves of new players from the Asian market that Xbox has been struggling with.
Microsoft's goal in South Korea is to get more users into the console ecosystem before bundling XGP. "They're much more profitable on consoles, they want to keep the user base of consoles, they want [players] to get XGP, mobile and personal computers are the icing on the cake." In another five, ten years, it will be a bigger flower.""
Ahmad said, "I think the XGPU (Ultimate Edition) is the XGP form that Microsoft wants, a price subscription to everything. He believes that there is a good chance that there will be more price plans for game consoles or mobile phones in the future, similar to the price plans for PCs and Xboxes currently available, and the pricing of these plans will obviously still "keep Microsoft profitable", but they will still be very cheap. ”
In this sense, consumer concerns about "sustainability" don't seem to be a major issue. Microsoft's goal is to attract more people to join in the foreseeable future, and given that there is no clear need to pay for the sharply rising costs, this means that Microsoft will keep subscriptions cheap and attractive as well as competitive for as long as possible, widening their distance from Stadia and Luna.
But there's another side to the sustainability issue — a specific issue in the second part that Jim Ryan cites, which is the cost of developing AAA games. Microsoft may be doing well, and players may grudgingly accept it for some time to come, but in this subscription-based future world, it will also have an impact on publishers. Publishers have an impact on developers, and as such, the game itself suffers.
The biggest concerns here come from another industry. From the beginning, Game Pass was often likened to Netflix, while music services like Spotify were relatively few. Actually, gamepass is obviously a bit of both and a bit of both, but the comparison is understandable: it's a one-month subscription, and it changes everything. What really matters to these two subscription cousins is that the biggest concerns often boil down to the impact on creators.
For Netflix, that idea was made clear in the 2019 Deadline report, which often cancels two or three seasons of programming, such as some Marvel series, and that shows are also subject to a lot of exclusivity clauses.
For Game Pass, there's no need to worry about this, after all, most games don't launch quarter-by-quarter like TV. As an article in Wired explained, part of the reason Netflix canceled its show was because it used a unique algorithm of data that decided to produce and update not only based on the audience range of the show, but also on how the show was consumed.
With Spotify, the concern is that "music as a whole is universally devalued", artists on Spotify and Amazon already make very modest profits on each song, and Spotify also creates its own music internally and adds it to playlists. Therefore, for every additional Spotify private label song, the income of independent artists will be further reduced. There are fears that this will have the same effect on the game.
Back at Game Pass, the real problem isn't the risk of abruptly canceling the game, or the first-party game suppressing the third party, but the model itself — what might happen to game production if these data-driven subscriptions become big enough to influence the way content and production is made.
For now, developer discussions about game Passes (at least internally, Xbox Game Studio) have been very positive. For example, Tim Schafer, the head of Double Fine, talked last year about how Game Pass helped his studio during the development of Brain Crew 2, saying the structure made the team more creative than ever before. He said: "It really got me thinking of some crazy game ideas, some of which were like... I would never say it to any publisher. However, I now open the documents folder again and say, "Oh, I really like the idea, and I bet I can do it right now." ”
Tim Schafer（左）
Feargus Urquhart is the head of Obsidian, the studio for games such as Grounded and Out of The Sky. "XGP kept us going, we thought it was super cool, and some people could try it." Brian Fargo, head of Wasteland 3 developer InXile, was quite happy with the opportunity to provide long-term support for his team's game, saying, "We can do more DLC because there are always more players, and the DLC can be short, long, and we can start thinking about the mod community..."
Shortly after Microsoft sent a big deal to talk about Game Pass, indie developer Davionne Gooden similarly talked about the huge impact the Game Pass deal had on him and his game She Dreams Elsewhere: "With the Game Pass deal, I can fund the rest of the game, make it profitable, and still be able to do everything I want with the publisher." ”
In short, the early signs of Game Pass developers were very positive. But to really understand its implications, you have to know exactly how the deal works and how it affects non-Xbox first-party teams. The Game Pass deal structure is strictly confidential, and it wasn't until recently that Gooden really gave the clearest concept of Game Pass trading: a mix of "upfront support," "licensing fees," and a "bonus system." Then, Phil Spencer also elaborated on this in a conversation with The Verge: "In some cases, we will pay for the full cost of making the game. Then they'll also get retail opportunities on XGP," which is a flat fee paid to developers. Sometimes developers get more thoroughly, more like a deal: 'Hey, if you pay us that much, we'll put it in XGP'. ”
"Others want [protocols] to be more based on use and profit, whether through trading or by using to make a profit." We're willing to experiment with many different partners because we think at the beginning, we didn't expect so much, and we have a model that's completely usage-based. Most partners say, "Yeah, yeah, we understand that, but we don't believe it, so just give us the money." ”
Sega has brought the Ruron series to XGP
Given the confidentiality of the transaction structure itself, this is much the same as the issuer confirmed to us. In most XGP transactions, there is usually a prepayment for exclusive or bringing the game to the service, which in itself is definitely "enough" to get a game to join XGP. Then there's a bonus structure that's largely based on the number of downloads of the game and the amount of time people play the game. Then how long the game stays on XGP will depend on both sides. Xbox may want a game to stay there after the originally agreed period and offer the same contract again — especially if a game proves popular — but the decision on whether to sign it is clearly still up to the publisher.
There is a bigger, more fundamental difference between Game Pass and any other subscription model, and this is often overlooked. Spencer said: "When some people try to refer to Game Pass as Netflix or Spotify, there's a fundamental difference... These games are all available for sale. ”
Xbox knows its talking points. Sarah Bond said: "Make XGP synonymous with the store". "Compared to other entertainment subscriptions, players can reacquire content in new and different ways every time," Ben Dirk says. This includes jumping back into a game of varying difficulty, or exploring a game in a whole new way with DLC. Unlike movies and TV shows, you can change the experience to your liking to make it as appealing as it was when you first interacted with it – which also creates a greater after-sales opportunity for developers interested in creating DLC for their work. ”
The last point is true. The biggest selling point of Game Pass (for Microsoft and developers and publishers) is that for everyone involved, the upfront or subsequent proceeds outweigh the direct proceeds. It's a network effect, and it's actually the same as the free trial version of a paid game, and all your friends can play it on a lot of platforms too – all sales go through one store.
Humanity Is a Success Story where players continue to buy after playing the game
The data shows that Game Pass users play about 40% more games in total, they play 30% more genres, and developers believe that "engagement" has increased by an average of 6 times, and some have even increased by 30 times. On top of that, in addition to playing more, subscribers themselves spend more on the game. Xbox Game Pass members typically spend 20% more on games than non-members.
Take Human Defeat, a relatively standalone game published by Curve Digital: "60% of people who tried the game had never tried a puzzle game, and 40% went on to buy another puzzle game outside of game Pass. Combined with the associated discounts, users will see a bigger picture: XGP players will be more likely to find that playing games and spending money on games is beneficial for developers and publishers, and more in a place where Xbox gets a share – which is certainly good for Xbox.
Every developer or publisher we spoke to agreed: An anonymous source told us that one of their games earned more than double Steam's revenue in XGP, and that the service had gone from being "complementary" to something very important — "because Xbox Game Pass wasn't complementary at all." ”
Martin Wahlund is the co-founder of Fatshark Studios, which is currently working on Warhammer 40K: Dark Tide, a game that will also join Game Pass and will be exclusive as an Xbox. Martin wouldn't disclose sales figures, but he hinted that XGP was helpful to the studio, telling us via email, "As you know, Warhammer: Doomsday 2 has been added to XGP for the second time. Therefore, we appreciate XGP. ”
Warhammer 40K: Dark Tide, which will be released this year
Anna Downing, sega Europe's senior vice president for commercial distribution, had a similar remark: "We're very happy with the results, and we hope [Microsoft] is happy as well." Ultimately, they get high-quality work and we get a huge new opportunity. ”
As an example, Downing cited DoublePoint Hospital, which joined XGP last year, saying, "Helped the game have 3 million players worldwide." This is a huge benefit of joining Game Pass, it strengthens your exposure to your audience, and the surge in engagement in turn helps to further establish the product in the market. That's great for us, and it's good for consumers who have never had a similar experience before. ”
Mike Rose of Independent Publisher No More Robots jokingly said, "What would a developer or publisher ask for but a bunch of players and a bunch of money?" ”
He explains: "We used the money from an XGP deal and now we're funding three more games... Of the four games we've completed this year, three of them were made available through Game Pass funding. "For small and medium-sized issuers, the cyclical impact of this type of money could be transformative." This has taken us from 'let's keep doing what we're doing' to 'Now we can start funding bigger things'. ”
Of course, there are other issues when it comes to funding and making games. For example, Phil Spencer says, "We believe that the number one metric driving XGP's success is play time," and there are concerns that XGP's focus on game time will lead to "endless" or service-oriented enhancements to games. The problem of the gradual reduction of single-player games is valued by many people, will XGP accelerate this trend? It's worth pondering, if the XGP model prevails, will great stand-alone works like Jim Ryan say disappear?
However, the answer is still relatively positive. Asked if joining Game Pass would make Fatshark's game more focused on long-term engagement, or otherwise enhance player stickiness, Martin Warrend was ambivalent: "We're always focused on delivering the best possible gaming experience, no matter what platform it's released on." ”
XGP's "buzz" is mostly Xbox exclusives, but smaller publishers' Descenders have also proven to be hit games.
Mike Rose argues that Game Pass "absolutely loves multiplayer or games without an ending and can play them all the time," but he also notes that Game Pass relies on the launch of new games and is therefore not just those endless games, as that's what sets it apart from competitors like PS Now or EA Play, which is just a collection of older games. Will XGP affect the game type of No More Robots? Not exactly. "I wouldn't say XGP changed my game, but it was definitely my idea."
Sega's Anna Downing said the same thing: "For the last 9 or 10 years, our strategy has been to provide content-enabled games over the lifetime of the game, whether they have to be multiplayer-centric or appropriately endless like a football manager. If you take Total War games as an example, Creative Assembly has a plan for each game that will release free and premium content over several years. ”
Is this model feasible in subscription services? Of course. Will we develop games specifically with subscription services? It's possible. It really depends on how the product evolves in the coming years, as well as the needs and expectations of consumers. ”
One publisher put it this way: "When Steam rolled out chargebacks, everybody would say, 'Oh my God, we need the best first two hours of the game ever... Just like everyone has to play for two hours and then get a refund, we lose a lot of sales — but we don't. Maybe on average, you'll lose 2% to 7%, you know, over a period of three years or more. That's not a big number.
Therefore, concerns about creating content to conform to the economic model are always valid in theory. But in practice, you'll find the way people create games and what they want to do with games... Not much has changed. ”
Frankly, when asked about XGP, the reactions of developers and publishers, even those who remain anonymous, were almost unanimously affirmative. None of the most popular and frequently repeated concerns seen elsewhere — that developers' games could devalue, affecting their freedom to make what they want, or the pain of other video or music subscriptions that publishers feel — don't seem to matter. At least not yet.
Xbox is certainly confident enough. We asked Decker the question of sustainability, citing these game time and spend data as an example, and Game Pass "played a huge role in helping developers find new audiences, resulting in increased game adoption, a diverse catalog of games, and more players." "His point is very clear. In his words: "Xbox Game Pass is sustainable. ”
However, there is another sticking point. Not the impact on the sustainability of the game's production, funding sources, or the model itself, but how does it change the way the game is distributed?
One of the points of contention in the distribution world is the practice of curation — or the lack thereof. On the one hand, in allowing almost anyone to publish a game directly to a platform with a large audience at a fraction of the cost, a more flatter, more democratic storefront like Steam, where almost everything can be released, is often seen as revolutionizing the rise of indie games — just a sheer number of great, surprising games, or unusual contingencies. Small games, on the other hand, can also easily be overwhelmed with a daily flood of stores. Steam certainly has a lot of trouble.
In the case of Game Pass — and actually other subscriptions, like Apple Arcade — curating is a very important goal.
"A lot of people see XGP as a value game," Sarah Bond says, "but what we've learned, and the research we did when we designed XGP, has come to the conclusion that people want value, but what they really want is curation." And often, it's very difficult to find something from 2,000 books — like, where do I go? And players want this ability to make you have a place to trust: 'I know, I'm going to study Game Pass, I know someone has studied these games in detail, these games have been heavily reviewed, these are very good games.' 'It's priceless. We see that now. ”
XGP is a curatorial game hall.
Derk said the same thing to us. "Members asked us to prioritize the quality of the games over the quantity and to make sure that the game library is updated regularly so there is always something new to play. We take to heart the diversity of our 18 million members and take into account factors such as subject matter, age rating, broad or special appeal. It's not meant to be filled with thousands of games — our members say that's their preference — and a curated library of games can also help developers discover new things. ”
But some publishers take the opposite view. Michael Douse, director of Larian (Divine Realm: Original Sin and Baldur's Gate 3), stressed that XGP is "fantastic" in many ways, and that for many game producers, its benefits are "impossible to underestimate," but in curation: "Games have been off the shelf for years." Games used to not sell. Retailers will say, 'Okay, we need an action game here, we need an RPG here,' and then there's a deal, somewhere on the shelves, and so on. ”
"In a sense, in the traditional 'publisher consciousness,' games are not created for players, but for retail spaces. Digital distribution has lifted us out of this predicament. "He cites various tools on the Steam platform, such as wish lists, best-seller lists, lists of latest releases, etc., as a way for the game to be presented to the right people, rather than having to use curation." If you can sell enough games, you can do a round of visibility testing. If you're a new game, you'll get carousels, which are great things because it makes everyone enjoy equal conditions. ”
Steam will always have curatorial and moderate topics, but the Nintendo eShop is a similar example.
"Now," he continued, "algorithmically speaking, if I'm doing something, people who probably like it will magically see it — that's obviously a better approach, because now you're making games for humans, you're not making games for retail space." I think, my concern is that we might go back to that state where you're actually making games for catalog strategy (i.e. retail shelves) instead of making games for players. ”
He added that console stores themselves are just starting to catch up, with the Nintendo Switch store being one of the first to properly replicate Steam, and PS5 and Xbox consoles are now doing the same. "That's why indie games have been so successful in this shift: you can have editorial content, you can have wish lists, and it's democratic. If you're a new game, it doesn't matter what you are, I don't know, you're right next to the latest Return to Germany or whatever, because you happened to be releasing at the same time. ”
In that sense, moving to a subscription model can get you in trouble, especially given the data-dependent side of subscriptions — like the data-driven strategies of Netflix and Spotify mentioned earlier. "When you're data-driven, data is brutal. There is no compassion in the data. ”
"I don't know how these things are planned, but what I'm trying to say is that I'm definitely going to believe, you know, players. My point is, to be clear, that I'd rather our fate be in the hands of the player than in the hands of anyone else. ”
"Always, always the player. I want to talk to the players, I want to talk to the players directly, I want them to decide, or talk to them, I think they should be the ones who decide the success or failure of a game. ”
Still, this is a hypothesis, especially one that relies on XGP not only becoming popular or reaching the goal of so many subscribers, but as a whole subscription becomes the dominant force on how people get their games.
For now, that's a long way off — every publisher we've interviewed has the same view: XGP is just "part of the mix." As Wallander puts it, another "big opportunity" is to bring Sega's game to as many people as possible. As Ahmed explains, "XGP is just an entry point into Microsoft's own ecosystem." In a way, that goes back to Xbox's very public goal: "low barriers to entry," so "eventually, [people] can simply play more of the games they love to play." ”
For fear of future subscriptions, Michael Doos himself is perhaps the most reassuring response. "I would say that Nintendo is a good example because neither Mario in the '80s has changed substantially from Mario now."
Microsoft's Battle Frog was remastered 29 years after its original release.
"People just want to sit in front of the TV and hang out on the game console right in front of them. This will never change. The game is so ridiculously stable that even if there are viable economic concerns, people will want a specific thing, and people will want to make a specific thing – as long as the two things are consistent, it doesn't really matter what the economic model behind it is. ”
"Why does Netflix have so many Bad Adam Sandler films!" But on the other hand, "Original Diamond" is still eye-catching. These things come naturally. So, there's not always bad luck and haze, and there are clearly more positive aspects to subscriptions in the short and long term. ”
Is Xbox Game Pass too good to be true? Author: Eurogamer Translated by Big-Eyed Wave