Game subscription services: the upsides and downsides?

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[The GameDiscoverCo game discovery newsletter is written by ‘how people find your game’ expert & company founder Simon Carless, and is a regular look at how people discover and buy video games in the 2020s.]

It’s the middle of the week, so the time is here to send ‘useful info’, in an email, for you to digest. And once again, thanks for your support on GameDiscoverCo - the company & newsletter. We’re nearing a milestone I’m excited to share soon! (Mmm, milestone.)

‘Funny’ side note: Monday’s newsletter got copy-pasted by spammers. They inserted a fake Le Creuset cookware ad (?!), and fwded it to thousands of non-game industry people. Thus, we got an email from a distressed senior citizen saying: “take me off your list or youll find yourself in dire pain.” Overwhelmingly Negative reviews, then, Madam?

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Game subscription services: new food for thought

Look, it’s no secret that we’ve struggled with how to define how we - and the industry - should think of game subscription services like Xbox Game Pass, Apple Arcade, and PlayStation Plus.

On the one hand, they bring amazing reach, with millions or tens of millions of potential players able to access your game on Day 1. On the other hand, they do majorly change industry dynamics between developers, publishers, platforms and players.

So we were pleased to see that a couple of recent interviews on GamesIndustry.biz have smart & brave - and credible - people go on the record about this. Specifically:

• Finji CEO Bekah Saltsman discussed how subscriptions are simultaneously “awesome and terrifying”, noting: “Because of the constriction and consolidation of the industry over the past two years and how a lot of companies are just owned by the subscription services, my concern is that because the libraries are so big and the companies are so prolific with huge user bases, that they won't need us.”

• Obviously, Finji has done well with subscription services (Overland in Apple Arcade, the great Tunic in Xbox Game Pass), but Bekah has another very salient point: “if we turn a buying population into a subscription population, that means we have to rely on subscription fees and buyouts. And in general, subscription buyouts don't pay for that many years of a team's development, unless your team is very small.”

• Late last year, game biz veteran Jason Della Rocca also weighed in in a GI.biz interview, commenting on the possible subscription dependency issues: “If you're like, 'I'm just going to wait for my next Game Pass deal' and they say, 'We don't want that one,' then it's like, oh crap, my whole business model was focused on that approach.”

• Another good point from Della Rocca: “At the beginning, you incentivize, you load it up, and that brings the install base. And when the install base is there, we're naturally motivated to be on the platform, so the incentives go away or diminish.” We certainly saw this with Epic Games Store platform exclusives - and to some extent with Apple Arcade.

So - I don’t know. We’ve had a pointed discussion about this in the GameDiscoverCo Plus Discord recently, too. There’s an argument that core players on console (in particular!) - would never have bought your smaller game outside of a subscription.

Those who only buy 2 or 3 big $60 games per year are getting introduced in subs to smaller games they might not have otherwise played, and that can be great. We saw that with the supremely quirky Hypnospace Outlaw on Game Pass, for example.

There’s also the argument that the market is so crowded - and GaaS-centric - that subscriptions were inevitable to allow smaller titles to get wider distribution anyhow. You’ll watch a niche or offbeat documentary on Netflix beause you have access - but you likely wouldn’t have paid standalone to rent it.

The TV & movie industry is also struggling with this. I’m aware comparisons aren’t 1:1 - due to the DLC and additional monetization you can do with games. But there are some parallels to be made. Good Will Hunting producer Chris Moore wrote an interesting opinion on ‘the disappearance of the hit-driven producer’, for example.

He notes that for the streaming giants: “Volume is more important than quality. If your goal is to gain and keep subscribers, the subscribers must feel they are important to the company. If the company spends time and energy on only certain audiences, the numbers fall, and that company becomes a niche; however, subscription services cannot only cater to niches, they must try to be everything to all people.”

And the New Yorker has a great portrait of Netflix TV boss Bela Bajaria, who is genuinely marshaling quality global TV, but with a slight undercurrent of changing tides. Michael Schur (The Good Place) notes on the TV/movie platforms’ ‘data-driven demands: “The sands are shifting all the time… it’s very hard to learn what the rules are.”

There’s also a quote from an un-named Netflix showrunner - whose show was cancelled without clear explanation - that resonates: “None of these individual shows are the product they are selling. They are just selling more Netflix.” (In Netflix’s defense, they’re now super-transparent on top end viewing numbers with the Netflix Top 10 website.)

So - I guess I just like exploring these viewpoints because they are encapsulations of ‘subscription services may not be good for all parties, all the time’. And there is an interesting redirection of player sentiment - from ‘fans of the media item’ to ‘fans of the subscription service’ - that I still think is underdiscussed.

But: I love Game Pass and Apple Arcade from a ‘personal game choice’ point of view. Does that make me a hypocrite? Nope. Confused? Certainly. And now you are too….

What should you do about Steam NextFest?

We do a ‘Client Radar’ monthly research document for our regular consulting clients. And one question we answered in a recent one was a very interesting one: “Is it still a good idea to showcase your game in Steam NextFest, given how ridiculously crowded it’s got in recent Fests?”

When you’re hustling to be noticed with a few hundred other demos, you may get the impression that consumers and influencers are overwhelmed. Isn’t it tempting to counter-program and do your big demo showcase at a different time of year?

Here’s our current views in favor of using Next Fest as a platform:

• PRO: There’s been some data from Chris Zukowski which indicates that at least in terms of wishlists earned, there’s still a great opportunity to reach players here. (Unclear if conversions are coming down, but wishlist additions still make sense!)

• PRO: If you can ‘pre-game’ your visibility by releasing the demo a little early to streamers, or getting people hyped about the game in the 2-3 days before the NextFest starts, you will be high profile to players at the start of the fest. (Big win!)

• PRO: streamers and media are looking for interesting games to cover during this period. So if you can get on a ‘best demos of Next Fest’ round-up for them or the media, it can really boost things, over and above Steam platform visibiity.

So platform visibility (big deal), influencer visibility (possibly big deal) and player visiblity (also great) are the wins here. On the other hand, there’s these problems:

• CON: We definitely think influencers and streamers (and the press, to some extent!) gets overwhelmed with the amount of demos thrown at them in this timeframe. So you can go the entire NextFest nowadays without getting a streamer ‘hit’. Ugh.

• CON: Games that already have momentum going into the NextFest are targeting NextFests more than they used to. They know the boost to interest can be massive. So the top NextFest games are often ‘obvious top games’ nowadays - see Manor Lords in the last Fest! So.. less opportunity to break out from scratch?

• CON: We think that making Next Fest your one and only demo push is becoming risky. This is because of the way that top titles get amplified, but everything else falls beneath the waves. (Again, hit-driven dynamics at play.)

So our conclusion would be: we do think that many of you should be in a Next Fest, actually - if you have a game that is underhyped, and makes sense gameplay-wise to showcase a demo of. It’s a good opportunity to break out and reach new people.

But we think you can often get a lot of the upside (if you’re not featured on the Next Fest homepage!) from streamer coverage. So maybe you should construct an additional ‘send keys to key streamers’ demo at a quieter time of year, too.

And maybe even another demo event, well-separated from the Next Fest, with a slightly updated demo, could help differentiate? We highly recommend multiple approaches - because just one may not do it in today’s market.

The game discovery news round-up..

So let’s finish off the free newsletters for the week (Plus subscribers, we’ll see you back here on Friday with lots of fresh data), with a look at some of the discovery and platform things we’ve spotted since Monday. Like this:

• Firstly, a big shout-out to Chris Z’s great new blog on the recent success of top-down Escape From Tarkov-like ZERO Sievert, in which he shows (above graph!) that Steam conversion rate for 14-month old wishlists is still perfectly good, if you have the right game. Lots more detail on success factors for the game, too…

• Some interesting movement here in the European Union: “European Parliament votes to take action against loot boxes, gaming addiction, gold farming and more…

  commission will also set up a European Video Game Strategy to grow industry and a European video game award.” Quite a lot in here - all still exploratory, though.

• Bloomberg’s Jason Schreier is reporting that Microsoft’s ongoing layoff of 10,000 employees includes employees “in its gaming divisions such as Xbox [including 343 Industries] and Bethesda.” Perhaps not surprising - no reason why they should be excluded. But it’s been rare to see platform companies laying off in recent years.

• Some Roblox things: its December 2022 key metrics say Roblox DAU is 61.5 million, up 18% YoY (that’s a LOT, folks); the company is finalizing a ‘creator hub’ to make things easier for user-generated content; there are rumors of Roblox coming to Meta Quest in the second half of 2023.

• First-party data! PlayStation’s top download rankings of 2022 are here, and lots of intriguing details abound - Modern Warfare II (U.S./Canada) & FIFA 23 (Europe) leading the paid game charts, Fall Guys atop the F2P download charts, Among Us doing better in Europe than the U.S., etc. And here’s Japan.

• We rarely cover eSports here: partly cos it’s not a platform, but also due to hype cycle issues like this: “The majority of Overwatch League teams have hired a British law firm to collectively bargain against Activision Blizzard amid growing frustrations around operation costs, lackluster viewership and a distinct lack of a path to profitability.”

• Interesting point from a Discord I’m on? Check the amended Steamworks ‘wishlists’ page & it says: “Customers who have been notified about your game within the last 1-2 weeks… will be on e-mail cooldown.. This period may be extended in periods of high notification traffic (such as Steam seasonal sales).” Meaning: watch for discounts not triggering Steam wishlist emails as expected, after seasonal sales?

• Sales microlinks: Switch topped U.S. console unit sales in 2022 as wider industry sales declined 5%; here’s December 2022’s most-downloaded on PlayStation, including The Callisto Protocol; European console and PC game sales fall 7.1% in 2022, according to GSD data.

• Dug this Chris Charla (Xbox) Twitter thread about achievement design: “Good Achievement design rewards players when they do well, and suggests off path or ‘have you tried this’ challenges and moments for players who are really into your game… A typical ‘critical path’ playthrough from start to end should give a player 40 - 60% of the Achievements and Gamerscore.”

• A small addition to Monday’s console wishlists newsletter re: Xbox wishlists: “You can also find [user wishlists] on the Xbox website. Here's an address for people in the U.S.: https://xbox.com/en-us/wishlist. You can make it public and share it with others, so people can purchase games for you too.”

• Microlinks: good to see Itch.io calling out Softonic for “stealing content from our developers” for ad revenue; here’s a history of the recent ‘fake ad’ trend in F2P games, with lots of examples; there’s a call for submissions to the upcoming third-party organized Steam Cozy & Family Friendly Fest.

Finally, former Kotaku video series Highlight Reel, which grabs highlights from trending ‘gameplay & glitch’ videos, has its own Patreon and YouTube channel:

I’m LTTP on these videos & find them both fascinating and semi-incomprehensible (since I don’t play many of these games!) You should watch, too…

[We’re GameDiscoverCo, an agency based around one simple issue: how do players find, buy and enjoy your premium PC or console game? We run the newsletter you’re reading, and provide consulting services for publishers, funds, and other smart game industry folks.]