TheGreatWhiteShark
Member
An Endless Stream of Games Is the Perfect Business Model for a Pandemic
Microsoft’s Game Pass is one of several subscriptions that keep revenue flowing no matter what.
www.bloomberg.com
Interesting read,
“Subscriptions will play a big role in driving engagement,” says George Jijiashvili, an analyst at researcher Omdia.
Subscriptions can keep revenue flowing even when a company has no new console or blockbuster title.
Game Pass is available in 41 countries, and Microsoft is adding the ability to stream games to Android devices.
This fall it’s tripling the number of countries where it sells what it calls All Access,
which gives customers a new console and a Game Pass subscription for a monthly fee that’s currently $20 to $25,
similar to cellphone contracts that periodically give you a new handset.
....
Contrary to expectations, Bond says, monthly plans get customers to spend more.
A Game Pass subscription leads to about 20% more playing time.
Users sample a wider variety of genres, and they generate 20% more in sales, both on titles not included in the plan and on extras such as downloadable content.
Game Pass helped increase revenue for Xbox content and services by 65% in the most recent quarter.
“People make this assumption that if you have a subscription, you stop buying games,” Bond says, but the opposite is true.
....
Although Microsoft offers game makers an upfront payment and bonuses based on how well a title does, producers aren’t entirely enthusiastic.
Many, particularly makers of smash-hit games, fret that subscription services will shake up the industry in the same way platforms such as Apple, Pandora, and Spotify changed music, taking the biggest slice of revenue.
....
Simon Byron, publishing director of Curve Digital, a software house in London, says Game Pass has helped win new fans for his puzzle games, which aren’t typical console fare.
Microsoft says 60% of people who played Curve’s Human: Fall Flat on Game Pass had never done puzzles before, and two-fifths of those bought a similar title after playing.
While individual sales of the $15 game are comparable on Xbox and PlayStation, five times more customers have tried it on Game Pass, according to Byron. “We were genuinely nervous, but so far we’ve been really pleased,” he says. “Selfishly, the service is becoming so popular with other publishers that it’s become harder to put our titles there, but that’s a sign they’re doing something right.”
plus more at the link above
So, analysts estimate that there is plenty of room for growth in the market for game pass, and some of the things I underlined,
a) game makers get a fee up front AND bonuses if their game is played a lot
b) game pass side effect is that xbox -although having half the units playstation has- curve digital says that not only sales are comparable between the two, but because of game pass 5X more people on xbox have played their game than on playstation
c) basically engagement leads to more sales, who would have thought? ;p
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