Video game subscription services are already extremely popular in the gaming industry, but experts believe they will become even more popular in the coming years.
Juniper Research recently released some figures, which show that the video games service platform sector will rise from US$6.6 billion in 2020, to US$11 billion by 2025.
New game-distribution services from Apple, Google, Microsoft, NVIDIA, Tencent and now Amazon, are clear efforts by the largest tech corporations to cash in on a growing digital industry.
When the popular MMO game World of Warcraft first came out in 2004, video game developers were opened up to the success of video subscriptions. People didn’t just want to buy a copy of a game they loved, they were also willing to pay monthly in order to play it. Since then, other subscription-based games have taken the market by storm, and these monthly services have transformed the gaming industry, bringing in billions more in revenue.
Upon highlighting the willingness of gamers to pay for their favourite games, developers have introduced micro-transactions into their games, and tech companies are keen on providing a platform on which developers can sell their games through a monthly subscription service.
As the sales of physical copies decreases, a whole new industry is being unlocked by the biggest investors. Not only are people buying more games digitally, but they are also spending more money on them.
Digital games provide gamers with an easier way to get hold of titles, and people are willing to pay for that convenience.
Online subscriptions such as Xbox Live and PlayStation Plus have performed well, but gaming is increasingly turning towards a Netflix-style service.
Microsoft released Xbox Game Pass, which has seen remarkable success, and is expected to continue to grow in the coming years, especially with Microsoft now acquiring new game studios such as Bethesda. Game Pass allows gamers to gain access to hundreds of third-party games for a monthly subscription fee.
The report claims current platforms such as Game Pass, EA Play and PlayStation Now, are strong new revenue streams. It also says that subscriptions that are accessed through PCs will account for the largest segment, bringing in over US$5 billion in revenue in 2025.
Only 1% of mobile gamers are using gaming subscription services on their phones, so it’s still quite a niche, but a market is there just waiting to be tapped into.
Cloud-based services such as Google Stadia and Amazon Luna are attracting large amounts of attention, but Juniper predicts cloud gaming will only account for around 1% of gamers worldwide, accounting for only 25% of the overall US$11 billion total by 2025.