I disagree hard on that one. Pushing first-party to a rival absolutely risks the health of the home ecosystem. Even a streaming only option isn't a particularly good look. If Sony users are willing to stream a game and subscribe to your service, why do that on PS. They can take that controller onto another device easy enough and now they have access to the full GP offer. From there they can potentially buy content for games they otherwise would have played on PS. Better to find more neutral partnerships to push streaming (Roku, TV manufacturers, PC vendors, etc.) There will be some financial strings there as well (even Roku will expect a cut), but it would likely be something that could easily be absorbed and that would not effect the titles that could be made available. Same for Sony at the end of the day. A PS or Xbox in the cloud is still worth a lot more than streaming first-party on a competitors box.
That's not to say that something like MineCraft or CoD won't be multi-platform, but you give up everything, you have no leverage left. That didn't work so good for Stadia.
That's an interesting point, and wasn't exactly on the top of my mind when making that post. Reason why might've been because, at least when we look at financial results, for Sony and Microsoft 1P games make up less than 20% of their gaming division revenue. And I figured that for those who would only play those 1P games on consoles of those platform holders, that percentage is likely less than 10%, provided options with release parity were also available (which at least for Microsoft, is the case).
So that's likely less than 10% of division annual revenue coming from people who would absolutely stick to that console platform and its ecosystem even if other options were available WRT acquiring & playing the 1P content. Not a large percentage, but then there's the other role of 1P content and its exclusivity, acting as a conduit to draw in people from various niches and keep them in to invest further inside the ecosystem. That 10% might not be large in-and-of itself but they're probably among the more hardcore/core types that could be big spenders.
Yeah I'll admit I likely didn't think of this too much earlier but thinking on it now it could create a complication in versions of streaming services for competing consoles that offer wholesale access to 1P content, even if streaming-only. Still don't think it would be an issue for GaaS MP-centric titles, and maybe select 1P titles (say if they're staggered out a few months after initial release) provided as cloud-only. There has to be some form of it working, that can justify having tailored versions of these services on competing console platforms, that don't necessarily hurt ecosystem engagement particularly for that 10% who could be among the larger "whales" .
I find it ironic that the ones that keep talking about future of gaming are the same ones that show the less great games
You do realize Microsoft had the best-rated 1P games of last year, correct? That's higher than any 1P game from Sony or Nintendo for that year. They also had multiple highly-rated games in 2021.
No chance of game subs becoming the dominant distribution channel.
Unless every major third party publisher and dev is assimilated under the corporate banners of Sony, MS and Nintendo, the third party publishers themselves will simply cock block any attempts to make Netflix-like sub-services dominant by refusing to support them.
Sub services being dominant would change the entire gaming landscape meaning most of the biggest most popular games cannot be supported unless they're financed by first parties (which requires a massive number of ever-increasing subscriber-base to make it make any sense at all).
I don't think they need an infinite increase in subscription numbers to justify these services, or to bring in a healthy amount of revenue and profit. Would they need more than the 25 million GP currently has, or the ~ 4 - 6 million PS Now has? Sure. But I don't think they need something crazy like 100 million, let alone 250 million etc. What's more important is the concentration of subs paying the median rate for a lengthy time period, and from there, how many of them are spending on MTX/DLC content, how many are purchasing games in the service regardless (at a discount), etc.
30 million subs with 95% paying a $10/mo median for roughly 8 months average is much better than 100 million subs with 50% paying a $10/mo median for only 3 months average. We still have to wait and see where some of these subscription services land in that regard. But here's something else interesting: if the average attach rate for a typical game console is 8 games, and let's say 4 of those are indie and 4 are AAA, and all are full-price, then the average console would generate $360 for the platform holder over the course of a generation.
If that console were to sell, say, 100 million units, then the average revenue for that platform through software sales for a generation would be expected to be at $36 billion. But that's assuming each console gets that 8-unit attach rate with games at full-price (half being indies and half being AAA). However, in real-world terms, if you look at the attach rates for various console, and even considered all of those games being at full price, you'd still "only" get $48 billion lifetime. Now look at PS4's annual results; over the course of the past seven years, considering an average of $20 billion annually, that's $140 billion in revenue for the division lifetime-wise. Clearly way more than software revenue from game sales through attach rates would suggest.
So then compare that again with a subscription service, say it reaches 100 million users but 20% of them are on scattershot deals and discounts, conversion tricks or whatever. Another 10% are regular subs but don't stay on the whole time annually. Another 10% are regular subs and probably stay on a bit longer, but still aren't "steady" subscriptions. So, that leaves 60%, or 60 million, who are regulars, and pay a median $10/mo annually. That's $7.2 billion annually; over the course of a typical generation that would generate $50.4 billion in revenue off subscriptions.
Which as you can see falls in line with a traditional model of 100 million console owners buying 8 full-priced AAA games over the course of a generation. However, you're getting slightly more revenue off the subscription model, with less overall users, and with theoretically lower operating costs (maintaining a server cluster for the subscription model would cost less in the long-term than manufacturing 100 million console units, paying for their assembly, certification, shipping costs etc. and coverage for warranty repairs for each unit). That's a net gain all-around.
Now, we don't know what the split is for something like GamePass when it comes to how many are paying for the whole year, how many are $1 conversions (which still means the XBL Gold sub just gets "converted" to a GPU subscription), how many are paying for regular GP vs. GPU etc. However, I think some people vastly overestimate how many people are "gaming" these services or aren't paying for the overall content. Similarly a lot are being misguided in speculating if reported numbers of subs are concurrent or not; standard practice is to report concurrent users, because financial results will eventually show what the numbers really are, anyway. Kind of like how Netflix's results of revenue backed up their claim of some 200 million subs basically being roughly 200 million
concurrent users, not cumulative.
So I guess I'm mentioning all of this to show that, if developers/publishers are fearful subscription services will squeeze out AAA games from them without a platform holder's involvement, then they should've been worried a long time ago with that already happening in the traditional space. We've already seen several teams partner with platform holders to get funding for AAA projects, anyway, all without the presence of a subscription service. So it's not like subscription services will suddenly make that a thing. I think as long as you still have consoles and still have a need for physical media for specific markets, then 3P devs/pubs will still have options aside from relying on a subscription service.
And if it gets to a point where big AAA games are mainly coming from platform holders, then that won't be too different from blockbuster films in Hollywood that mainly come from a small handful of studios these days, or the vast majority of music coming from a small handful of record labels. There used to not even be 3P publishers in gaming until Activision was founded; maybe their acquisition is a prognosis of things to come and return back to that state, and I can see that being a big shock. At the same time though, all maturing industries eventually go this route; the bigger worry should be if platform holders start making deals with ISPs and retail outlets so that only their hardware & services are carried in them, or try squeezing out rival platforms from accessing certain chip manufacturers, etc. through BS deals.
Because at that point it would mirror how movie studios used to control the theaters and then the government got involved to shut that type of thing down. I strongly doubt that ever happens with gaming, however.