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[GDC Talk] Games Subscriptions: Is the ‘Netflix of Games’ Inevitable?

Kokoloko85

Member
Considering Netflix is increasing their price, it might not be working as predicted by so many.
I dont think the models are comprable, like how everyone pretends they are.

Games have been developed, sold and done well with the current model we have used for 30+ years…. No need to try and change it when its worked great.

Games are selling more than ever.
Nintendo games are selling more than ever. Same with Playstation 1st party games and Im sure PC games overall too.

We’re talking 10, 20 to 40 million sales per 1st party game. The games industry isn't suffering
 
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Rykan

Gold Member
I personally don't think that video game subscriptions are the future of gaming. The whole subscription model for games is based on the idea that we consume video games in the same way that we consume TV series and movies, but there's a big difference.

A typical movie will last anywhere from 90 minutes to 180 minutes. A typical series episode is 30 minutes or 60 minutes. In order go get a decent amount of entertainment out of a subscription, they need to be provided with a large quantity of Movies and TV shows. This is different from games where a game lasting around 7 hours is considered to be on the short side. Games length varies greatly, even more so if we include multiplayer focused games. This means that there is just a lot less need for such a large quantity of games.

I've subscribed to a whole bunch of different game services like PSNow or Xbox gamepass and i've ended up cancelling all of them because it simply didn't make sense to subscribe to any of them anymore.
 

lh032

I cry about Xbox and hate PlayStation.
academy awards popcorn GIF by Boomerang Official
 

Topher

Gold Member
gimme a summary

I'm watching and taking notes. Will update them here:

Starts out by saying "Netflix of games" is a misleading analogy.

Doubts we will see a wholesale shift to wholesale monetization. Very few games exclusive to subscriptions.

Direct revenue is a key driver for inclusion in subscription services. Old titles to renew interest in a new release. Increase audience reach, boost visibility, network effect.

Subscription market is only 4%. Should not be overblown. Forecasts to increase from $3.7bn to $8.4bn by 2027.

60% of subscription of Q4 2021 was with Game Pass

Subscription more relevant to consoles than PC/mobile.

Strong correlation between day one releases and Game Pass performance

Does not see Sony changing policy on day one releases into subscription

Opportunities to license content into cloud providers

Netflix moving into gaming might prompt others to do the same

PS Now has the largest catalog

Not a huge amount of content in any subscription services at the moment and not rapidly expanding

In 2021, most significant increase in volume to Game Pass was EA Play

Paying subscribers spend more time gaming

Average number of subscriptions per gamer is 2.1 in the US. 1.5 in UK.

Subscribing gamers spend 23% more time gaming than non-subscribers

Game Pass subscribers skews towards the older gamer, more family oriented

69% of Game Pass subscribers play on console

38% of Game Pass subscribers play on PC

63% of Game Pass subscribers play on smartphone

Game Pass is progressively multi-screen

GP subscribers spend more all categories of monetization (in-game, digital, physical, expansions, season passes) than non-subscribers

Game Pass subscribers favor shooters, but beyond that is varied in genres

Take aways:

Game subscriptions will not dominate the gaming sector

Game Pass has larger implications for the Xbox platform and console market generally

Points made during Q&A

Does not expect much impact in the PC space

The most engaged gamers are more willing to sign up for subscriptions

Was asked if inclusion in Game Pass means "exposure will be wider, but financial gains will be lower" for a specific game

Answer: Microsoft will rely less on paying third party games as their first party pipeline increases. It is inevitable that the terms won't be as good and deals will be reduced to an extent for third party. Not over the next 12 to 24 months while Microsoft is still relying on that third party content. The risk is it is not standardized and can change over time.

Game streaming is a incremental distribution opportunity. Subscriptions are majority download.

/end
 
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Topher

Gold Member
The part in the Q&A where he says he expects deals for third parties to decline for Game Pass eventually was interesting. Describes the current situation as Microsoft is dependent on third parties, but once first party begins to ramp up, there will less incentives available for third parties.
 

kyliethicc

Member
Would it make sense though? It's cheaper to get Gamepass Ultimate than to subscribe to Gamepass and Xbox Live seperately.
Not really. Both are typically $180/year. Assuming most people console users get XBLG for the $60 yearly price.

I don't think there's much overlap,
Just as a quick math example:

Assume 15 of the 25 million Game Pass subs have regular Xbox console GP.
5 million have GPU, and 5 have GP PC.

Assume a bit more than 50% of them also have XBLG. Maybe 8 million.
The other 8 million XBLG subs don’t have GP.
We’d get 25+8=33 million total unique subs. Overlap.

We’ll never know the real figure unless MS says.

Probably somewhere around 30-35 million.
 
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Not really. Both are typically $180/year. Assuming most people console users get XBLG for the $60 yearly price.


Just as a quick math example:

Assume 15 of the 25 million Game Pass subs have regular Xbox console GP.
5 million have GPU, and 5 have GP PC.

Assume a bit more than 50% of them also have XBLG. Maybe 8 million.
The other 8 million XBLG subs don’t have GP.
We’d get 25+8=33 million total unique subs. Overlap.

We’ll never know the real figure unless MS says.

Probably somewhere around 32-35 million.
I get what you're saying, I just think it doesn't make much sense for people to pay seperately for the two services when the cost for GPU is either the same or lower, and when converting XBGL to GPU is quite lucrative for the player. Imo the overlap is very, very small.
 

reksveks

Member
Summary from my viewing
- says Netflix of gaming is a misleading analogy (in-game monetization, hybrid monetisation, higher potential arpu, games aren't exclusive to services, drivers for content inclusion is more varied)
- key driver to adding games (direct rev, adding old games before a new release, comarketing deals, network effect on 'premium' sales)

Will update. Won't update cause Topher Topher already did it lol.
 
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kyliethicc

Member
I get what you're saying, I just think it doesn't make much sense for people to pay seperately for the two services when the cost for GPU is either the same or lower, and when converting XBGL to GPU is quite lucrative for the player. Imo the overlap is very, very small.
Sadly we can’t know until MS puts out the figures or mentions it in an interview.

Like people assumed PS Plus and Now would be 47+3=50 mil, but Jimbo said about 66% of Now subs already have Plus.

So its only really 47+0.8=47.8-48 or so. As we will find out in Sony’s next couple of quarterly reports.
 
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Sadly we can’t know until MS puts out the figures or mentions it in an interview.

Like people assumed PS Plus and Now would be 47+3=50 mil, but Jimbo said about 66% of Now subs already have Plus.

So its only really 47+0.8=47.8-48 or so. As we will find out in Sony’s next couple of quarterly reports.
PS Now and PS+ is different because there is no service that combines the two for the same or lower price, so of course there was going to be a lot of overlap. Sony is now obviously changing that with the new PS+ model.
 

brian0057

Gold Member
The moment this becomes the standard of the industry, is the moment I stop buying games and stick to retro.
 

kyliethicc

Member
PS Now and PS+ is different because there is no service that combines the two for the same or lower price, so of course there was going to be a lot of overlap. Sony is now obviously changing that with the new PS+ model.
Yeah but unlike Game Pass, PS Now users didn’t need PS Plus to play Now games online.

Basically to start the estimation, try to figure out how many of the 25 million Game Pass subs have regular $10/month Xbox Game Pass for Console. I’d bet it’s around 50% or more. Probably a safe bet that PC Game Pass is their smallest number of subs among the 3 options. I doubt more than like 30% have Ultimate. It’s all total guesswork of course, since we have no official info.
 
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NickFire

Member
Subscriptions will stick around, but I haven't seen any reason to believe that one will dominate and disrupt the industry like Netflix did. MS had a chance at pulling it off early this generation, but that ship has sailed.
 

Three

Member
PS Now and PS+ is different because there is no service that combines the two for the same or lower price, so of course there was going to be a lot of overlap. Sony is now obviously changing that with the new PS+ model.
The difference between GPU and GP is $5. $5 for 12 months is $60 extra per year anyway. People buy cheap 1 year gold membership for much less than $60 and a few are stacked for years.

MS removed the yearly cards and tried to double gold prices though. I'm not sure how many people have converted to GPU instead but thier push for it didn't go so well in terms of the price hike but that 1yr membership card removal might have helped in lowering the overlap though it will take some time for existing memberships to expire. Stacked XBLG members can also go in and out of GP on releases while maintaining their online play access and not paying $120 extra which is why I think MS officially stopped selling anything longer than 3 months.
 
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I sure hope not. It wouldn't be a Netflix of games, it would be 17 Netflix of games.

I'm already at the point where I think I'll let GamePass lapse and just buy the games I want. Realizing I spent $180 for a year of GamePass without a single first-party game being released this year, made me realize the service isn't nearly as great of a deal as it appears up front.
 

kingfey

Banned
It is, in a sense the masses will flock on those services.

Its not for gamers who have alot of money to spend on games, like it's normal.

People here can pretend these services won't be the future, but it will. Same as how mtx, and other avenue of gaming took off.

As long as there is market, and your average Joe savings, subscription service would be the future.
 

IDKFA

Member
I personally don't think that video game subscriptions are the future of gaming. The whole subscription model for games is based on the idea that we consume video games in the same way that we consume TV series and movies, but there's a big difference.

A typical movie will last anywhere from 90 minutes to 180 minutes. A typical series episode is 30 minutes or 60 minutes. In order go get a decent amount of entertainment out of a subscription, they need to be provided with a large quantity of Movies and TV shows. This is different from games where a game lasting around 7 hours is considered to be on the short side. Games length varies greatly, even more so if we include multiplayer focused games. This means that there is just a lot less need for such a large quantity of games.

I've subscribed to a whole bunch of different game services like PSNow or Xbox gamepass and i've ended up cancelling all of them because it simply didn't make sense to subscribe to any of them anymore.

Disagree. I believe a combination of subscription and streaming is not only that future of gaming, but the only future for gaming. Especially when every single third party game drops on the subscription service from day one. Add in the bonus of every game ever made being added to the service, with the guarantee that no game will ever leave, and nobody would buy a single game again.
 
A typical movie will last anywhere from 90 minutes to 180 minutes. A typical series episode is 30 minutes or 60 minutes. In order go get a decent amount of entertainment out of a subscription, they need to be provided with a large quantity of Movies and TV shows. This is different from games where a game lasting around 7 hours is considered to be on the short side. Games length varies greatly, even more so if we include multiplayer focused games. This means that there is just a lot less need for such a large quantity of games.

This kind of hits the nail on the head IMO. Gaming subscription services will have a role in the industry, but I think it'll be in the form of being easily accessible and well-priced backlogs of older gaming content.

It doesn't really hurt publishers to put a 3-year old AAA game into a subscription service if most of the upfront sales have already happened in the first year, and the current revenue comes from DLC and MTX sales, in which case you'd want to probably give the base game away for as close to "free" as possible that way you have a wider net of players who may buy the DLC & MTX items.
 
The difference between GPU and GP is $5. $5 for 12 months is $60 extra per year anyway. People buy cheap 1 year gold membership for much less than $60 and a few are stacked for years.

MS removed the yearly cards and tried to double gold prices though. I'm not sure how many people have converted to GPU instead but thier push for it didn't go so well in terms of the price hike but that 1yr membership card removal might have helped in lowering the overlap though will take some time for existing memberships to expire. Stacked XBLG members can also go in and out of GP on releases while maintaining their online play access and not paying $120 extra which is why I think MS officially stopped selling anything longer than 3 months.
The thing is, the overlap would consist of people who want to have both Gamepass games and online play. There's no reason for those people to not subscribe to GPU, it's strictly cheaper and converting XBLG to GPU saves a lot of money too.
 

Hezekiah

Banned
Considering netflix is increasing their price, and doesnt sell their movies/tvseries separately (unlike games).
I dont think the models are comprable, like how everyone pretends they are.

Games have been made, sold and done well with the model we have used for 30+ years…maybe dont try and force a change.

Games are selling more than ever.
Nintendo games havent ever sold so well and at such a high price and same with playstation.

We’re talking 10, 20 to 40 million sales per 1st party game… the games industry isn't suffering
Yeah exactly, subscription services are complimentary.

Also aswell as games taking longer to get through, it seems to me that game development is getting more expensive at a faster rate than TV shows / films - every gen it seems like there is a big jump.
 

begotten

Member
Gamepass exists because Xbox was so far behind Nintendo and Sony that they had no other choice for moving "home consoles". It wasn't a need nor is it the future.

That's why Nintendo and Sony can stay in their own lane of having brand identity that they've built over decades to keep them on top, continuing to move much more console and game units at full price.

Microsoft will stop making consoles in 10 years time. They'll start bundling an Xbox USB stick, a controller and 6 months of GPU for like $200 and you can plug and play it.

XGS Gamepass (come that point), Ubisoft +, EA Play and whatever the fuck other subscription service will all become soulless, secondary things that gamers don't actually care about until they can use and abuse it when their $1 specials are on.
 
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The difference between GPU and GP is $5. $5 for 12 months is $60 extra per year anyway. People buy cheap 1 year gold membership for much less than $60 and a few are stacked for years.

MS removed the yearly cards and tried to double gold prices though. I'm not sure how many people have converted to GPU instead but thier push for it didn't go so well in terms of the price hike but that 1yr membership card removal might have helped in lowering the overlap though it will take some time for existing memberships to expire. Stacked XBLG members can also go in and out of GP on releases while maintaining their online play access and not paying $120 extra which is why I think MS officially stopped selling anything longer than 3 months.

It's an interesting question tbh; the idea is they tried doubling XBL Gold to push Gold subs to GP (preferably GPU), and if the conversion rate was as high as they'd of liked, they wouldn't have needed to try doing that.

OTOH, since later in that year both Halo Infinite and Forza Horizon 5 came, and other big games came into GP (MLB The Show, Outriders, Flight Sim (Xbox), Psychonauts 2 etc.), it's possible that more Gold people converted to GPU at that time. Then with the June showcase, in what seemed like set dates for even bigger 1P games (RedFall, Starfield) and 3P exclusives (STALKER 2, Replaced, etc.), there were probably a lot of Gold holdouts who finally decided to convert given the games coming in that Fall and seemingly coming in 2022.

It might be fair to say there's been a high conversion rate of Gold users to GPU. Bigger question now might be, in light of some of these games not releasing yet (indefinitely delayed in the case of stuff like STALKER 2, Atomic Heart and potentially Replaced), Halo Infinite floundering, FH5 relatively soft, the RedFall & Starfield delays, no confirmation (yet) on the next Forza Motorsport coming this year etc., how many of the people who are paying month-to-month, or payed in advance with stacking & $1 conversions, are going to stay subbed?

Because with those who were on Gold last year and maybe decided to then sub (if they could do the 3 years Gold $1 GPU conversion or not, I'm not sure if that's still possible), chances are some of them could drop too but if they locked in with some type of $1 conversion of year-long Gold subs, they can't do that for a while and by the time they can, there might be several Xbox developments making them reconsider that, and staying subscribed after all.
 

Three

Member
It's an interesting question tbh; the idea is they tried doubling XBL Gold to push Gold subs to GP (preferably GPU), and if the conversion rate was as high as they'd of liked, they wouldn't have needed to try doing that.

OTOH, since later in that year both Halo Infinite and Forza Horizon 5 came, and other big games came into GP (MLB The Show, Outriders, Flight Sim (Xbox), Psychonauts 2 etc.), it's possible that more Gold people converted to GPU at that time. Then with the June showcase, in what seemed like set dates for even bigger 1P games (RedFall, Starfield) and 3P exclusives (STALKER 2, Replaced, etc.), there were probably a lot of Gold holdouts who finally decided to convert given the games coming in that Fall and seemingly coming in 2022.

It might be fair to say there's been a high conversion rate of Gold users to GPU. Bigger question now might be, in light of some of these games not releasing yet (indefinitely delayed in the case of stuff like STALKER 2, Atomic Heart and potentially Replaced), Halo Infinite floundering, FH5 relatively soft, the RedFall & Starfield delays, no confirmation (yet) on the next Forza Motorsport coming this year etc., how many of the people who are paying month-to-month, or payed in advance with stacking & $1 conversions, are going to stay subbed?

Because with those who were on Gold last year and maybe decided to then sub (if they could do the 3 years Gold $1 GPU conversion or not, I'm not sure if that's still possible), chances are some of them could drop too but if they locked in with some type of $1 conversion of year-long Gold subs, they can't do that for a while and by the time they can, there might be several Xbox developments making them reconsider that, and staying subscribed after all.
The other thing is that I'm not sure how the $1 Gold conversion is done in all fairness. If you were to sub to GP For Console while on XBLG would it advertise the fact that you can get GPU for $1, or does it automatically sub you to GPU for the duration of your XBLG when subscribing to GP? I've never tried it myself.

I don't even know which one MS would prefer. Would they want the higher revenue of not advertising the cheap GPU conversion or would they prefer to lock it in for subscriber counts so that they don't go in and out of the sub for the duration of their XBLG?

If the $1 or $15 conversion is pushed in the menus/choices I think the overlap would be miniscule. if they don't make it prominent and allow you to get GP For Console on its own then I can see there being a sizeable overlap for those who go in and out of GP during releases while being on XBLG to save some money.

I guess it depends how the menus when converting works and which one MS favors, revenue or subscriber lock-in. A lot of people bought HFW on PS5 because of the store menu options when they could have got the cheaper PS4 version and got the PS5 version free too. People don't always know that there is cheaper option if it's hidden like a loophole. I don't know if the $1 conversion is hidden when getting GP For Console on a XBLG membership.
 
The other thing is that I'm not sure how the $1 Gold conversion is done in all fairness. If you were to sub to GP For Console while on XBLG would it advertise the fact that you can get GPU for $1, or does it automatically sub you to GPU for the duration of your XBLG when subscribing to GP? I've never tried it myself.

I haven't been on an Xbox for a while so can't say from personal experience, but I'm assuming it's not something they outright advertise when upgrading to GPU off XBLG. After all, there are some people who pay for GPU in full at monthly rates, I doubt they would opt-in to something like that. However, provided you know of the $1 conversion offer, you can probably use that to opt out easily.

I don't even know which one MS would prefer. Would they want the higher revenue of not advertising the cheap GPU conversion or would they prefer to lock it in for subscriber counts so that they don't go in and out of the sub for the duration of their XBLG?

Well ultimately, they need to show revenue gains and the service has already been around since 2017. At some point investors will care less about the "growth period" and more about what the actual revenue is, which would push MS to not advertise those type of deals as often, especially when they already have things like MS Reward points that can cover certain costs for GP depending on user activity.

If the $1 or $15 conversion is pushed in the menus/choices I think the overlap would be miniscule. if they don't make it prominent and allow you to get GP For Console on its own then I can see there being a sizeable overlap for those who go in and out of GP during releases while being on XBLG to save some money.

That's possible, and potentially likely, but I think the people who held on to XBLG this long would've been more so the hardcore types who would not have an issue finding out about the conversion offer and taking advantage of that and the stacking stuff.

I can definitely see it from your POV as well though, especially if they can secure XBLG year subs for very cheap.

I guess it depends how the menus when converting works and which one MS favors, revenue or subscriber lock-in. A lot of people bought HFW on PS5 because of the store menu options when they could have got the cheaper PS4 version and got the PS5 version free too. People don't always know that there is cheaper option if it's hidden like a loophole. I don't know if the $1 conversion is hidden when getting GP For Console on a XBLG membership.

Yeah, and I think the HFW example might show some idea on how MS would communicate pricing for GP/GPU on their OS. I.e, they probably don't outright advertise the $1 conversion offers up there, since storefronts tend to want to prioritize revenue.
 

arvfab

Member
Everybody seems to want to bang mcrotransaction for some reason. EA is madly in love with it.
But for us plebs, we hate it.

Yet here we are, with people cherishing the advent of the "Netflix of gaming", forgetting the fact that as soon as it took off, more and more companies started to be unsatisfied with only pieces of the cake, leading us to the current situation with multiple streaming services, which keep rising prices without justification.
 

kingfey

Banned
Yet here we are, with people cherishing the advent of the "Netflix of gaming", forgetting the fact that as soon as it took off, more and more companies started to be unsatisfied with only pieces of the cake, leading us to the current situation with multiple streaming services, which keep rising prices without justification.
How can compete with normies?
These guys spend their money on anything.

They freaking bought 10m of gta definitive edition.
 
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