
Gaming subscription services like PS Plus and Xbox Game Pass have almost certainly had an impact on how we in the hardcore sphere perceive the value of video games — but they're yet to have a truly significant impact on how big publishers do business. At least, that's what Take-Two CEO Strauss Zelnick has to say on the matter.
The boss recently reassured investors (via Seeking Alpha) that the publisher's releases would only be added to subscriptions "at the appropriate time". In other words, Take-Two doesn't want to launch its titles straight to things like PS Plus. "We think that's the right way to support subscription," Zelnick continues.
He goes on to outline the company's overall view of such services, essentially saying that gaming subscriptions aren't yet at a point where they have any real effect on traditional business models. "Subscription is still a relatively small business — you're talking about businesses. I think the last announcement of Game Pass was 25 million subs. We're not talking about huge broad-based business yet."
Further clarifying his stance, he says: "In any case, no, I don't believe the business is cannibalising our business."
It's probably worth pointing out that PS Plus still makes Sony a lot of money, and it's always had more subscribers than Game Pass. That said, the numbers have fluctuated over the last few years, with the Japanese firm's latest reports revealing that subscriber figures have dropped again — although PS Plus as a whole is actually generating more moolah.
In any case, Zelnick's view of things is interesting. Massive publishers like Take-Two have long banked on equally massive hits, usually delivered as full price retail releases. Based on what the CEO's saying here, that won't be changing any time soon, despite obvious adjustments to the gaming landscape.
Do you think gaming subscriptions will grow in the future, or do they seem destined to cap out at a certain point? Become an armchair analyst in the comments section below.
[source seekingalpha.com, via gamesindustry.biz]
Comments 43
He speaks sense, just look at the games that get added to gamepass and PS plus, none of them are new third party AAA day one multi million sellers.
Only games that benefit are risky multiplayer games hoping to get high player counts that they wouldn't get from retail only, or indies.
Probably the most honest/sensible reaction to these services that we've had in a while.
Phil Spencer was talking about getting 3 billion players on Xbox Live (with or without consoles) less than two years ago.
Obviously he was referencing the super long term, but I thought it was a bit of a stretch at the time and I think it's even more of a stretch now. (Same for PS Plus for that matter.)
I see subscriptions for different publishers a lot more likely. Similar to the situation now with video streaming platforms.
Rockstar made a billion from GTA V in just a weekend alone (if memory serves me) So it would be stupid to put their games on Plus for a few mil.
I think what PS Plus has shown is that the ceiling is actually probably somewhere around 50 million.
Maybe there's greater potential if you're able to reach PC and (somehow) mobile as well, but I think it's very telling that PS Plus has kinda stagnated at 50 million.
@get2sammyb And that makes you wonder where Microsoft's Game Pass efforts are going to end up.
Well we know its not affecting sales on PS, as theres no expectation for day and date games of any sort any playstation in most cases represents +80% of game sales
I mean it makes sense, for big publishers day one releases probably do make more direct cash flow for them when just simply sold. No one nows what deals MS pull when putting a game on their service day one. But I'll assume the value is probably not as much as what big games like cod could pull in
Yeah keep those investors nice and assured
@get2sammyb I think that 50 million is linked to 3 things really.
1) the consoles sold (around 120-150 million)
2) the amount of enthusiast gamers within that.
3) that it covers playing online
All things considered 50 million for PS+ is a huge conversion rate. But I imagine if they took online play off that and made it free that would drop by half in the first year, there aren't enough enthusiasts to want the game subscription service alone.
@get2sammyb Unless there's a population explosion I just can't see it getting over that 50 mil hump.
@ShogunRok I have a genuine fear that MS will get tired of waiting after a few years and move on to the next thing. I prefer PlayStation and Nintendo, but I don't want to see XBOX fade again either.
I suspect he is right NOW, at this time especially for Take-Two and the products they make. But I suspect there are others at different tier's of development for whom getting or, or not getting on Game Pass makes a huge difference that may make or break their game.
@get2sammyb PSN+ is very different than GamePass. The main reason most people get into PSN+ (and Xbox live gold) is to play games online, and that’s just a subset of the established console user base.
I don’t think that numbers is a good pointer of how far the game pass model can go, especially when game pass is not bound to a single console (also works with pc games and mobile via streaming) and it’s mostly about a big number of single player games. Regardless of potential it will take years for the model to give us a hint at the real brick wall.
It will take Xbox actually realizing some first party games to continue feeding the “day one” incentives, though.
I mean that seems fair. Gaming subscription services haven't had a massive impact on the way big companies operate.
Now microtransactions, on the other hand...
Streaming is still new in games, in a few years my son will only have subscription models, I believe this is the last era PlayStation or Xbox will use physical media for one thing and once that’s gone subscriptions are gonna jump greatly
Honestly the sub services haven’t really affected my personal spend on games. I’ve compared my Gamepass spend to play cost and honestly would have spent about the same amount. If Gamepass’s price increased even $5 a month, I’d be unsubbed because the value just doesn’t exceed the cost at that point. PS+ Premium’s value hasn’t been as strong as GPU, though that could be remedied with more classic titles. As it stands, I’m currently most positive about my NSO sub because it’s cheaper and offers more classic titles. I’ve played NSO more cumulatively than I’ve played anything on GPU and PS+P. I buy the new games, but love the subs for classic titles and potentially indies.
The value proposition just isn’t there for these big companies, but the exposure is great for indies that may otherwise have limited sales and that’s fine.
I can't believe it wouldn't havw an impact... is anyone really buying games for 70 on Xbox anymore?
If this guy took a shot every time he said 'business' during a day, he'd probably be dead within the hour.
@DualWielding Is that bad for them or MS maybe in the end you can say lets relocate/prioritize other platforms if the money isnt that great.
There's literally nothing else on MSs side except gamepass. You get an Xbox to get all games for free (10/month)
Owning the games just feels better. I bought Valhalla and feels like I've played only 3% of it, taking my sweet time. I feel no urgency or imaginary countdown as I'd have felt if I had it on Subscription.
I think one of the biggest barriers to subscription growth is that "most" "gamers" don't actually want to play a variety of different games. They just want to play one or two games forever and ever, games like GTAV, that effectively ARE their own subscription.
It works well for that portion of us that loves single player games, loves playing many different games, loves playing some smaller indie games. But we're not the "average" gamer. the average gamer wants NBA and GTA and that's about it. But recurring payments not unlike a subscription go into each.
But I also think that's going to become a different problem both subscription and traditional, as the dozen "platform" games start cannibalizing the whole industry. Like the PS5 Japan sales where the consoles are selling and games aren't. I'm sure the money's going into MTX for one or two games.
@somnambulance NSO would be good if they didn’t force you to use it to play online
I think he was referring to ps+extra/premium not essential. because they are similar offerings to gamepass not essential.
@DualWielding Other than MLB The Show, what $70 games are on Game Pass at all? Obviously whenever MS releases their big games that will apply, but even there, if High On Life was any indication, not a big $70 game, but still a timed exclusive, while it was dominating GP engagement, it was also leading the digital sales charts. (IDK why, the game is worse than Forspoken, but there it is... ) Same with Hi-Fi Rush. There's definitely a large user population, if not a significant majority on XB that aren't into the subscription, and MS expects that to continue. There's definitely a cap on the market that benefits from subs. I suspect most of us on these forums are likely to benefit from subs...but we're very outside the norm for the average console customer.
@Immovablegamer6669 IDK about that. Xbox is already largely digital (higher minimum print threshold means only bigger games get physical media, and obviously the most sold console, Series S, has no disc drive), and even with that MS is still showing about 17% of revenue from subscription and said they expect it to stay about there. I think they're still expecting digital game sales + accessories & mtx to make up the lions share of revenue even at MS.
Subs will be disruptive, but I don't think they're going to crater the traditional sales market unless the subs change their value proposition dramatically, or traditional prices keep escalating. It's possible the ABK merge or MS getting more frequent AAA tentpoles on the service swing that though.
@TheArt I think if you played 3% of it you played all of it 😂
@nomither6 Let’s be real though. Most Switch games are offline anyway and you can circumvent it if you’re one of those F2P people. The games make NSO worth it for sure.
@get2sammyb I think 50 million is a good number for the gaming market, which is still less popular than movie entertainment. It seems the cap for the latter is just over 200 million.
@somnambulance Personally, I subscribe for cloud saves which are invaluable, and Splatoon when I'm so inclined. I don't think I've played any of the games that I already played 30 years ago more than about 20 minutes for the novelty of it.
To be fair, I basically subscribe to PS Plus for the cloud saves and the additional discounts on PS Store sales.....
@kyleforrester87 😆 Naah I'm actually REALLY enjoying it. Even more than GoT so far.
@TheArt I can’t relate, but I appreciate how much you enjoy those sort of games. Generally they are lost on me, but obviously a lot of work goes into making them.
@NEStalgia I sub to both for the vintage games and cloud saves. I know it’s unpopular, but one of Gamepass and PS+ Premium’s biggest draws for me too is the cloud gaming privileges. It saves so much hard drive space for the random games I just try or my kids try.
The NES, SNES, and N64 apps are all in my top 10 used apps on Switch (sorry Sega). My whole family uses them and I’ve replayed several games on the service. Love going back to DKC every once in a while. Had a Goldeneye party, in fact, when it came out on NSO too… and we could’ve done the Gamepass version, but we stuck to NSO. My only gripe about PS+ Premium is the lack of continuously added PSOne titles. Get Um Jammy Lammy on there, Sony. I want the weird stuff I missed out on. Love that Tokyo Jungle is on Extra.
They're parallel markets, not really competing ones. People who know they are going to buy games are probably not going to subscribe to some monthly or annual plan. If they know they're going to buy the game, then they'll buy the game. Subscription services are rendered redundant at that point.
@Immovablegamer6669
I can't understand why people keep thinking this way with the evidence right in front of your eyes.
Yeah, as long as they make one high-quality game per 5 years and selling a ton of each, they don't need to add their games to subs system full of many medium quality titles
Lets be honest. There are barely 300m UNIQUE people that actually consume gaming on the regular. If we take consoles and steam players to estimate.
When we see games like pentinent, hi rush, grounded, age of empires, bleeding edge, psychonauts 2, Halo Infinite missing components, Starfield not looking up to par, you start to see that they need smaller budget games to compensate for losing money with the service. Phil convinced other bigwigs that it will work out, and clearly he convinced them with gamepass being the netflix of gaming, but that is over as you see netflix bleeding money and games having longer longetivity so buying a game vs a movie is not the same. A movie might be 2 hours, a season might be 15 hours max, but a game can be 100s of hours. Gaming is a different media and services believers need to get that.
People thought series x was going to dominate because of services. Either they don't know how games are consumed or they got a very wrong estimate on how many people will actually benefit from gamepass.
Anyways, gamepass has been out for a couple of years, and the gap for budgets for xbox and ps games is starting to get bigger and bigger. I don't want a mtx forced engangement fomo style of games for my console that comes with the gamepass territory. Incomplete games, modes, dlc finished later and not pushing the console that was hard to find to the limit.
It's the temporary nature of these all you can eat subscriptions that put me off.
I can just about get on board with the ps+ essential/games with gold, because at least you are guaranteed to have them in your library if you keep paying.
Movie/TV streaming has a similar problem nowadays, difficult keeping up with what TV show is on what service.
I really don't like being on a timer to use something.
@Balosi
It's why I hate battle passes.
@GodofCapcom yeah it's similar. I've occasionally got sucked into limited time events in various games, but I really try to avoid them when possible nowadays.
@somnambulance Oh yeah, I love the cloud gaming, is a big reason I upped to go ultimate when I did. I'll probably do it for plus premium eventually when they add PS5... Assuming they do. I used to sub a month here and there for PS Now for it, but with plus its always or never with my regular plus so I'm less likely to do it.
Only thing I wish for is Quick Resume on MS and or some equivalent of the quick start card on plus. If it had cloud resume states it would be like Switch but for your phone!
I had GamePass for 1-2 years, never used the service. Hoping I'll make more use out of PS Plus Premium since I'm signed up until April 2027.
So far though I have yet to really play anything the service has offered, beyond redeeming the Essential games and some Extra & Premium titles.
Satya Nadella Microsoft CEO said when speaking to investors during the fiscal year 2023 call. "We saw new highs for Game Pass subscriptions, game streaming hours, and monthly active devices. And monthly active users surpassed a record 120 million during the last quarter.
@cragis0001 that uh, seems unlikely.
@cragis0001 @Balosi In December 2021 they said that 20% of gp users were using touch controls only, suggesting a relatively huge user base is playing on mobile devices, which is what they are aiming for. So large numbers between mobile and pc, where they said growth is faster than console makes sense.120m seems reasonable given that full market size.
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