MMOs like World of Warcraft helped usher in the age of online games as a service, with millions of gamers paying a monthly subscription fee. Now, subscription models are becoming more common—and profitable—among other game genres. As more and more consumers prefer digital versions of their favorite games, publishers are evolving their business models from one-time purchases to long-term experiences, keeping them relevant for years to come. Downloadable Content (DLC), episodic content and microtransactions increase the service lives of games significantly.
Roughly a quarter (28 percent) of US males and females ages 13-to-54 purchased additional video game content according to a recent study by NPD, with males and teens being the primary demographic. Microtransactions are purchased more often among those surveyed (compared to DLC) at 23 percent. Meanwhile, 77 percent of these buyers said that microtransactions allow them to extend their enjoyment of a particular game.
Rockstar’s support for its Grand Theft Auto V ‘s online mode has kept the game on top 10 charts for over three years running—many times as number one.
Only 35 percent of Call of Duty: Black Ops III digital revenue to date has been earned by unit sales, according to analyst firm SuperData. Activision’s ability to consistently release additional content has proven financially successful for the company while keeping fans coming back for more. An impressive 33 percent of the game’s digital revenue to date has been earned through microtransactions, compared to DLC and Season Passes at 22 and 10 percent, respectively.
Convenient, digital access to titles is ushering in the age of Netflix-like services that offer instant access to huge libraries of games. Ahead of its time, OnLive pioneered this idea but later sold its patents to Sony. Playstation Now, Xbox Games Pass, EA Access and more allow gamers to try and buy hundreds of games for a monthly fee. These services often attract gamers with exclusive titles, cross-platform play, purchase discounts and early access. HTC Viveport offers up to five VR experiences per month with its subscription plan.
Looking to the future, will mobile game subscriptions be next? Experts say “yes.”
“The success of the subscription model in music and video streaming tells us that consumers are willing to commit to a monthly payment in exchange for access to a curated buffet of content,” Joost van Dreunen, CEO of SuperData, told AListDaily. “As the market for mobile gaming matures, game publishers will seek out ways to lock in their audiences, rather than have them play for a short period and move on. A subscription-based strategy will be a key component in that context.”
“Mobile game subscriptions will free a set of developers to innovate on the content and services that are best suited for that business model (e.g., episodic content, enhanced communications, VIP services, etc.),” predicted Terence Fung, chief strategy officer for Storm8 (Dream City: Metropolis). “This will gain traction in 2017 and continue to grow moving forward.”