Sony comments on subscription services gaming and the effect on first-party titles.
Can a subscription service (Game Pass or PlayStation Plus) provide enough revenue to maintain current games’ quality and turnaround time? That is the biggest discussion about this very real situation facing the industry. It goes beyond giving the consumer what they want, more games, and gets to the question of: what is the future of gaming? Sony recently discussed this at their FY2021 earnings call, and laid out a fact that consumers just don’t want to hear. You can’t release AAA games on subscription and maintain the current budget levels.
Sony’s CFO and Director of the Board, Hiroki Totoki stated:
“AAA type titles on PS5, if we distribute that on the subscription services, we may need to shrink the investment needed for that and that will deteriorate the first-party title quality and that is our concern.”
He also made it clear that this is in the best interest for the games themselves.
” we want to make sure we spend the appropriate development costs to have solid products/titles to be introduced in the right manner.”
However, many consumers are not hearing any of that and keep pointing to Game Pass and their personal joy at having all those games for a fraction of their cost to buy.”
Sony Vs The Consumer?
Sony refused to comment on Microsoft’s Game Pass, but they’re busy with the new PlayStation Plus. Their approach, while still not great in my opinion, is much more business friendly version than Game Pass. They’re offering more focus on established titles and their back catalog. Note that I said “business friendly” and didn’t comment on consumer thoughts. I am aware many people want more games for less money than they spend buying them. However, that is not how a business thinks or operates. They want maximum return on investment, and that means balancing the consumer’s desires with feasible investment and pricing to maintain current quality and future growth. Basically, if you want something at a certain quality and in a timely manner, PAY FOR IT!
The Game Pass Dilemma
Microsoft is going full speed ahead with first-party titles hitting Game Pass on day one. They purchased a bunch of studios specifically to be able to put more titles on the service, because they knew most studios couldn’t make a big enough return on investment through a Game Pass run alone. This is the same issue EVERY movie and series streaming service is facing. Content costs money, subscription fees are (mostly) fixed, and you need a lot of the latter to feed the former. However, at anytime, you, the consumer, can cancel the subscription and BOOM… cash flow drops. That isn’t good for the business. So, what do they do to keep costs down?
Well, like Sony said, put less money into game development. You also add advertising in game like we see on mobile games. Oh, wait… I believe Disney+ and HBO Max are offering ad-subsidized tiers too, and Prime Video plays skippable ads before things you already paid to watch with your Prime fees. It’s almost like gaming subscription services can see their future. Also, less games and longer life cycles will become more common. Basically games as a service for all, not just mobile and Free-To-Play.
The Eco-System Trap
There is one thing scarier than less quality, less quantity, and more annoying ads in games. Being locked out of something you’ve spent a lot of time and money on. In order for your subscription fees to be able to support game development, the companies need you to be subscribed. However, with you being able to cancel and come back any time, this is a huge risk to income. The answer WILL be contracts. It may start with incentives to bye multiple years (I did that for Disney+ when it first started) and may move to threats of losing you cloud saves or data if you don’t re-subscribe before 180 days or some other arbitrary timeframe, but they will NEED to lock you in.
This isn’t me shilling for Sony or attacking Microsoft. This is business. As for my feelings as a consumer, I want my games as complete as possible (I HATE needing day-one patches) and in increasing quality. I don’t want to have to wait for levels and story releases every six to eight months for 10 years to get the whole thing.