Game Subscriptions Market Continues to Grow Rapidly
Gamers worldwide have witnessed the rapid rise in popularity of subscription-based models in recent years. This model has proven to be a successful formula for some operators, leading to an overwhelming number of subscriptions available to the average gamer. From platform access fees to games library services, merchandise subscriptions to premium memberships, the periodic payment model is at the heart of this digital revolution.
According to a report by Omdia, the game subscription market revenue is projected to exceed $22 billion by 2027. This growth has been driven by services such as PS Now, Game Pass, and cloud gaming services, as well as in-game subscriptions and platform-access costs. The market revenue cap was around $16 billion at the time the report was published, rising from a third of that figure since 2017.
It Just Keeps Growing
The video game subscription market is highly competitive and includes big names like Xbox Game Pass, PlayStation Now, GeForce Now, EA Play, and Ubisoft Plus. These operators are constantly striving to provide as much value as possible to their subscribers. Microsoft's Xbox and PC Game Pass services are currently leading the pack, but PlayStation and Nvidia (GeForce Now) are not far behind.
Cloud-based gaming portals are the newest edge to these services. According to a report by Omdia, cloud gaming services are projected to generate around $6.5 billion in revenue by 2027. In response to this trend, Microsoft is reportedly working on Project Keystone, an all-cloud console, while PlayStation has recently opened up cloud-streaming options to its PlayStation 5 users.
Out of the research analyzed by Omdia, it was revealed that games library services make up a significant portion of the market share at 44%. As these services continue to bolster their offerings with cloud mechanics, they become even more valuable.
It's not just the gaming giants that are benefiting from this trend. Even smaller companies are getting in on the action. For example, Activision's games are expected to hit Game Pass in 2024.
Overall, the video game subscription market shows no signs of slowing down. As cloud-based gaming becomes more prevalent, it's likely that these services will continue to grow in popularity and revenue.
Subscriptions Upon Subscriptions
In recent years, the gaming industry has seen a surge in subscription-based services, live-service games, and microtransactions. From access subscriptions for popular games such as World of Warcraft to in-game premium subscriptions like Bethesda’s ‘Fallout 1st,’ there are now plenty of options for users to pay for.
According to a statement by George Jijiashvili, Senior Principal Analyst at Omdia, it was predicted that by 2027, the ‘total number of paid subscriptions’ will reach around 217 million worldwide. Subscriptions have become a cornerstone strategy for leading game companies, which increasingly emphasize expanded capabilities, exclusive content, and cross-platform accessibility. However, subscriptions’ role as the primary business model remains unproven. While offering a cost-effective and user-friendly experience, sustaining blockbuster game development within this model raises difficult financial questions. This further underscores the belief that, while subscriptions will continue to grow, they will not become the dominant business model for games but rather complement a diverse range of monetization approaches.
The rise of diverse monetization approaches has led many games to pivot to a free-to-play model, which has proven to be successful. Subscription-style services, live-service games, and microtransactions have all combined to drive a new operating model in recent years. This diverse range of monetization approaches has led to the concern that impressionable gamers will soon be swimming in monthly, recurring payments.
Despite this, for some gamers, boasting a vast collection of subscription services is the cost-effective, progressive way to enjoy games in 2023 and beyond. It is important to note that while subscriptions may not become the dominant business model for games, they will continue to grow and complement other monetization approaches.
In conclusion, the gaming industry has seen a surge in subscription-based services, live-service games, and microtransactions in recent years. While subscriptions have become a cornerstone strategy for leading game companies, their role as the primary business model remains unproven. However, subscriptions will continue to grow and complement a diverse range of monetization approaches.
