Mar 28, 2022 - Technology

Gaming's Netflix or Spotify moment is still a long way off

Screenshot showing an overhead view of a plan flying over farms far below it

Microsoft Flight Simulator, which is available via the Game Pass subscripton service. Screenshot: Microsoft

Subscription services aren’t close to disrupting gaming the way they’ve shaken the movie and music industries, according to new data shared by industry researcher Piers Harding-Rolls of Ampere Analysis.

Driving the news: Gaming subscription services amount to just 4% of the revenue in the North American and European game markets, Harding-Rolls calculates.

  • That’s $3.7 billion, compared to nearly $81 billion generated from other spending on games, including the sale of discs, downloads and in-game add-ons.

A sharp contrast: Streaming services accounted for 83% of U.S. music industry revenue in 2021, according to the Recording Industry Association of America.

  • The movie industry, also tilting toward digital after the pandemic walloped the theater business, estimates there are some 1.3 billion subscriptions to video streaming services worldwide, according to the Motion Picture Association’s latest report.
  • Last night’s Oscar winners, led by the Best Picture award winner, AppleTV+’s “CODA,” further proved how subscription services have influenced that industry.

Between the lines: Even gaming’s biggest subscription service is relatively small.

  • Microsoft’s disruptive Xbox Game Pass, launched in 2017, has 25 million subscribers who pay up to $15 a month. It has about 60% of the subscription market, according to Harding-Rolls.
  • Game Pass is a killer deal for gamers conditioned to paying $60 per title. Subscribers get first-run Microsoft-made games and scores of new, or recent, third-party games.
  • But, seen another way, it doesn’t have much. It offers just over 500 revolving games, compared to Netflix’s offering of more than 3,000 movies to U.S. subscribers.

Be smart: One hindrance for gaming going the Spotify route is that scores of top titles don’t even reach subscription services.

  • Nintendo’s releases, for example, aren’t a part of the company’s Nintendo Switch Online, which instead mostly offers DLC for existing games and a slew of retro games.
  • Games also aren’t quite as convenient as music and movies to bundle into a subscription because of the time they take to play, the download size and the inferior experience of playing them over a streaming connection.

What’s next: All eyes are on Sony, this week, as the PlayStation-maker is expected by Bloomberg reporters (and Microsoft execs) to announce a revamped subscription offering soon.

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