Insight Bite: Coronavirus Accelerates Shift to Subscription Gaming

While gyms and sports centres lie vacant across the country, video game servers are buzzing with traffic as social distancing leads people to seek entertainment online. This rush of activity is boosting revenue and accelerating industry trends.

Chief among these is the emergence of “Netflix for games” platforms. Over the last few years, the stage has been set for subscription gaming through developments in mobile technology and the increased bandwidth of mobile internet, making it possible for handheld devices to support complex online games. Now everyone thumbing around on a smartphone is a potential gamer.

Microsoft made the first major move with the Xbox Game Pass in 2017, and is now previewing another subscription service codenamed Project xCloud that brings the same games to mobile platforms. Most other major tech companies are also testing the water. Apple has its $4.99 per month Arcade, and Google’s $10 Stadia service is rapidly gaining traction. Even Netflix has been hiring game designers to develop what is thought to be choose-your-own-adventure-style interactive content.

The attraction of the subscription model is not difficult to see. Whereas console sales have long been a losing game for the likes of Microsoft, software and recurring subscriptions are a stable and predictable revenue source. They also open up new sorts of play experiences, and cater to the industry’s growing focus on boosting engagement per user, rather than attracting new users.

Partnerships between big tech firms and small gaming studios could be critical to the success of these subscription services, and we are likely to see more acquisitions in this area as the likes of Microsoft and Apple boost their offerings by buying up game publishers.

Facebook is one of the first movers in mobile cloud gaming, and purchased VR game studio Beat Games in November and cloud-gaming start-up PlayGiga in December. The social media giant then capitalised on the lockdown by launching the long-awaited Facebook Gaming mobile app in late April before the originally planned release date in June.

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