Gaming Subscriptions Are Losing Their Value

TL;DR: Game subscription services have a serious problem going forward if they are going to attract more subscribers. With gamer trends pointing towards long-term loyalty to specific games, increased interest in free-to-play, and a lack of trying new games, subscription services do not make sense for most people. Gaming subscription providers are going to need to either focus more on exclusivity, additional benefits for free-to-play games (e.g., Riot Games and Xbox Game Pass), far larger libraries of games, or potentially even non-gaming benefits, if they are going to attract more subscribers and make subscriptions valuable for developers and players.

‍Game Subscriptions Need a Revamp

‍The overall subscription economy has expanded by over 350% in the past seven and a half years, with subscription-based businesses growing at an annual rate of 200% (SpringFair). Consumers, on average, subscribe to 12 different services, and now, 80% of consumers prefer access to services instead of owning products. Within games, many of the major companies, including Apple, Microsoft, Sony, and Nintendo, offer varying types of subscription services for their players.

However, it is becoming increasingly hard to justify the price of a subscription to a game library based on the consumption habits of gamers. For over-the-top (OTT) video entertainment platforms like Netflix and Hulu, subscribers typically spend ~60 hours a month (or ~720 hours a year) watching films, TV shows and other video content across dozens of different titles. Comparatively, the average gamer spends a similar amount of time per month (58 hours per month), but only plays 4-5 games per year.

It is easier to justify an OTT video subscription because purchasing each piece of content individually is much more expensive. For example, a recent top non-Netflix exclusive (content available on Netflix but not exclusively produced or distributed by Netflix) is The Walking Dead: The Ones Who Live: Season 1. Purchasing this individually (six episodes, 4.5 hours total) would cost the consumer $19.95 (or $26.99 for Blu-Ray). Netflix’s standard subscription cost is $17.99 per month, meaning that a consumer could pay for one month of Netflix and only watch these 6 episodes (or 4.5 hours of content) to justify the price of the subscription.

To watch the top five non-exclusive Netflix shows, it would cost a consumer $125.95 to purchase individually. Based on the average viewer’s 60 hours of Netflix per month, it would take roughly three months to watch the Top 5 shows in their entirety. These 5 shows make up less than 0.2% of the number of shows available on Netflix.

Why The Same Cost-benefit Does Not Work in GamingThe reason gaming subscriptions are harder to justify for gamers to pay for is two-fold:

1. Gamers play the same games for years
2. Free-to-play reigns as the primary business model in games

1) Gameplay Preferences

While this is only Steam data, and many players play on multiple platforms, this lack of title variation paints a bleak picture for the future of game subscription services. Games have structurally moved more towards being LiveOps-supported and multiplayer. While these virtually infinitely scalable experiences are beneficial to gamers and their relationship with a given game, this comes at the detriment of subscription services, which (in theory) offer variety to a consumer who realistically only wants a couple of games.

For example, Call of Duty: Black Ops 6 (the most-sold game in 2024) launched with 33 different weapons, 14 different game modes, and 16 separate multiplayer maps. While all maps are not available in all game modes, if they were, there would be hundreds of thousands of different ways to play Call of Duty: Black Ops 6. This does not take into consideration the hundreds of weapon attachments, the combinations of friends and strangers that can be played with, the weapons/attachments of the other players, or the decisions of each individual player. Multiplayer games leverage the interactive nature of games to make each time you play a unique experience.

‍Shows and movies do not have the same replayability and longevity, each experience is virtually always the same. While they can be rewatched, the content does not change, unlike games where every session is unique.A page from Matthew Ball's most recent report reveals that of the best-selling packaged games of 2024, most are not even available to play through a subscription service.

Of the top twelve premium games in sales, two are fully available on a subscription service. The total cost of purchasing all 12 of these games would be $849.88. In theory, this is where a subscription service would make the most sense. If a gamer was to purchase and play one title per month, it would cost them $70.82 per month (for context, the standard Xbox Game Pass subscription is $19.99 per month). However, as we stated earlier, gamers do not play that many games, and if they do, they are rarely all premium games. Additionally, as is the case with many verticals, subscription services often have non-overlapping content libraries and it is unlikely that the top games would all be available on the same one.

‍2) Free-to-Play Reigns

‍The most popular games in 2024 show an even starker picture for the future of game subscription services.

Top PC and Multi-platform Games by Active Users per Year (Active Player):

1. Fortnite: Consistently ranked as one of the most popular games, with up to 30 million monthly active users.
2. Minecraft: A perennial favorite, attracting around 26 million monthly active users.
   • Minecraft was added to Xbox Game Pass (Microsoft owns Minecraft developer Mojang) in April 2019.
3. Roblox: While not a single game, this platform saw about 26.4 million monthly active users.
4. League of Legends: Remains popular with approximately 14 million monthly active users.
5. Counter-Strike 2: The successor to CS:GO, drawing over 4 million monthly players.

4 out of 5 of these games are free-to-play. The only game on this list that is paid is Minecraft; interestingly, while it is a top-played game by active users, Minecraft has not been in the top 10 Best-Selling Packaged Games since 2014 (five years before being added to Xbox Game Pass). With the current landscape being dominated by either free-to-play games or longstanding IP, consumer interests do not lean towards subscription services providing enough long-term value in games.‍

‍Takeaway: Game subscription services have a serious problem going forward if they are going to attract more subscribers. With gamer trends pointing towards long-term loyalty to specific games, increased interest in free-to-play, and a lack of trying new games, subscription services do not make sense for most people. Gaming subscription providers are going to need to either focus more on exclusivity, additional benefits for free-to-play games (e.g., Riot Games and Xbox Game Pass), far larger libraries of games, or potentially even non-gaming benefits, if they are going to attract more subscribers and make subscriptions valuable for developers and players.