Find us on Facebook

Why the Video Game Industry is Pivoting to Subscription-Based Services

man wearing Sony PlayStation VR

It’s great to see the evolution of the video game industry. At one point, they were played in discs or cartridges inside huge metal boxes, and now, there has been a rise in subscription-based video gaming services.

Just like how Netflix revolutionized the movie streaming industry, video games are also coming in the form of subscriptions. It works similarly to Netflix; you pay for a game pass on a monthly or yearly basis and get access to all titles to your name for the duration. But why is there a recent uprising of these subscription services in the first place?

Here’s why the video game industry is pivoting to subscription-based services for consumers.

A Variety of Consumer Preferences

The primary thing about the video games industry pivoting to subscription-based services is the evolving flexibility of consumers who want to own an array of games instead of a single piece. Let’s be real: nobody wants to have a pile of discs under their table and search for minutes to find their favourite game. Just like streaming music, subscription services allow gamers to choose a broad game library for a monthly fee and access all games in that list via the cloud. It’s also economically viable for gamers who can try multiple titles at once while only paying a minimum upfront cost each month.

Enables Easier Access

Earlier, it was hard for subscription-based services to work well due to low internet speed, high latency, software errors, and more. So, most streaming services had a difficult time setting up and surviving in the market. However, the advancements made in the video gaming industry, such as cloud gaming, high-spec gaming, and augmented reality, coupled with high internet speed, have enabled both gamers and developers to have easier access to streaming their games.

This has given rise to popularity in subscription-based gaming as players who do not want to invest in high-end consoles or PCs can simply subscribe to a game list and use their high internet speeds to play anytime, anywhere.

Predictable Revenue Streams

Every business needs a predictable revenue stream to run its operations and for big video gaming giants like Microsoft and Sony, subscription services are the way to go. Think of it this way: Video game developers need a regular income to run their show for as long as possible, and when you provide a list of games to gamers for a small fee, consumers get happy because of the low cost and wide selection of games, like the betting welcome offers on 10bet. The developers too get happy as they are confirmed of the potential revenue they receive for the months ahead. This can also help them to create strategies to cater to a wider audience, which would have been difficult otherwise. The potential revenue for companies doesn’t just stop there; in-game purchases are also a big part of the gaming culture, and making subscription-based services more accessible to gamers can help generate huge revenue from these purchases, affiliate programs, and commissions.

Creating More Innovation and Quality

Picture this: Consoles come with a free subscription to a game library, kind of like how TVs offer a free trial of subscribed media. That’s the future regarding subscription-based video game services. The subscription model also creates more innovation and a space for high-quality games as the main focus of developers is to engage and hook consumers into spending more time gaming, to increase the number of hours and potential for in-game purchases. Developers must keep their subscriber base active, so they must update existing games and create more engaging content to hook their consumers in.

Challenges and Considerations

No good thing comes without its share of challenges. Even though subscription-based services prove to be efficient in delivering multiple titles at a cheaper cost, they come with high fixed costs for the companies. Also, developers must constantly release new and engaging content regularly to entertain their consumers, which can often increase work pressure, competition, and potential burnout.

There’s also the risk of market saturation, where too many players offering similar services could overwhelm the consumers, making it harder for individual platforms to stand out.

To Wrap It Up

As we look into the future, it seems cloud gaming and subscription-based gaming are positioned for huge growth. It’s safe to say that the gaming industry continues to evolve from a mere CD in a box to the huge interconnection of consoles that enable access to every gamer out there. With growing customer demand, advancements in technology, and changing economic conditions, it’s clear that this model of video gaming could define the next era or step in the evolution of video gaming.