Are Video Game Subscription Services Bad for Game Developers?

In recent years, the gaming industry has witnessed a significant transformation with the rise of subscription-based services like Xbox Game Pass and PlayStation Plus. These services offer gamers a vast library of titles for a fixed monthly fee, granting them access to a multitude of games they might not have otherwise tried.

While this may sound like a win-win for gamers and service providers, it raises a pressing question: Are video game subscription services potentially bad for game developers?

The Impact of Subscription Services on Individual Game Sales

It makes sense that if players have access to a game via a subscription, then there is little to no incentive to purchase the game separately. This would lead to a decline in traditional game sales and revenue; something we’ve seen happen this week with the release of The Lamplighters League.

Stockholm-based studio, Paradox Interactive, published a statement on their website on October 10, just one week after the release of The Lamplighters League, stating that the company was writing down MSEK 171 (£12.8m) of capitalised development cost stemming from a revised sales forecast, which was established after the game’s release.

CEO, Fredrik Wester, added: “Even though we see cautiously positive player numbers in subscription services, the commercial reception has been too weak, which is frankly a big disappointment.”

While we all like a good deal and most gamers would agree that subscription services offer just that, it is essential to consider how this shift in consumer behaviour may affect the game development industry as a whole. Developers need to make a profit to sustain their businesses and continue creating games, so that we have great games to play.

The Sustainability of Subscription Pricing

There are always two sides to any coin and critics will argue that subscription services are overpriced; both Game Pass and PlayStation Plus having undergone price increases this year. However, given the increasing costs of producing games, these services can be seen as underpriced for the value they offer. If developers are not making a sufficient profit from their game releases due to subscription arrangements, it could potentially hinder their ability to stay in business and continue creating games altogether.

To mitigate this, service providers might need to increase the compensation they provide to game studios. This may lead to a hike in subscription prices, meaning it is ultimately the consumer that bares the cost, but this presents another potential dilemma to service providers, as the allure of subscription services lies in their affordability and the vast array of titles they offer.

The question then becomes whether gamers are willing to pay more for their subscriptions to ensure that developers receive fair compensation. While the evolution of Game Pass and PlayStation Plus has undoubtedly transformed the gaming landscape, offering an unprecedented level of convenience and access for gamers, there are still legitimate concerns regarding their impact on game developers.

The potential decline in individual game sales and the sustainability of subscription pricing pose significant challenges to developers, and striking the right balance between ensuring developers are adequately compensated for their work and providing gamers with affordable, attractive subscription options is a complex and ongoing issue.

As the industry continues to evolve, it’s essential for all stakeholders, including game developers, service providers, and gamers, to engage in a constructive dialogue to find a sustainable and fair solution that benefits everyone involved.

Share your thoughts with us in the comments.