Subscription Conniption

A new generation of consoles is released and PC gaming dies again. Google makes us stupid. YouTube serves up algorithmically chosen banality over quality shows. Television replaced the golden age of cinema with tawdry soap operas. Radio distracted children from their studies and turned their brains to mush. The printing press made our thoughts sloppy and cheapened scholarly work. Writing itself made us forgetful and replaced instruction with the illusion of wisdom. In short, everything you love is being replaced with the worst kind of nonsense.

I have a quiet admiration for people who warn of the dangers of technological progress, because they know their track record and will always be terminally uncool. Most of these takes weren’t even wrong, just incomplete. We can point out the problems, but the long term benefits are hard to spot. So what do we make of the present interest in streamed and subscription gaming? Is it a threat to developers as gamesindustry.biz (GI.biz) would have it?

History

To answer this question we need only look to the recent past. US movie production in 2000 produced 2,000 titles and approached 7,000 by the year 2012. This is despite the introduction of subscription streaming services by Netflix, Amazon, and Hulu. The share of box office revenue from non-MPAA member studios increased from 20% to 50% over the same period. These movies also take the largest share of ‘top movies’ for their year measured by Metacritic, Rotten Tomatoes, and user scores. TV production more than doubled from 100 new series to about 250 over the same period. Digitization drove this growth and a significant part of that change was in distribution. The worst we can say is that subscription streaming did not hinder the growth in movies from 2000 to 2012. The same can be said for music and book publishing.

Netflix began to produce its own shows in 2012 and it is instructive to know why they did this. Licensing costs were increasing as rights holders realized the value of their content. Netflix’s choice to create content was as much a bargaining chip in these negotiations as it was an effort to gain and retain users. Disney is expected to make its own streaming service, and HBO is already streaming.

This anticipated landscape resembles a likely future for gaming. Humble, the last non-publishing subscription service, started in 2017. Netflix established itself because studios did not realize the value of their libraries. This experiment can only be run once, and so incumbents are the ones driving this model for gaming.

The Threat

At its core the GI.biz article is more concerned with subscriptions. Streaming may be a catalyst for subscriptions, but the threats come from subscriptions. The distinction matters since subscription services exist now and do not require the same kind of investment streaming does. If a subscription model is a threat to developers, then that threat is here now and does not go away if streaming fails.

This means I am less interested in concerns based on streaming such as the availability of mods. This is a problem consoles have been living with for a while (and for which there is a solution). It is better to focus on how developers get paid and how they navigate the marketplace in the future.

The article identifies discoverability as a threat to developers. Specifically, it worries that a platform’s games will have priority over third party ones. It also fears a drop in financing, though I think this begs the question. A concern about access to sales information stems from a real problem with Netflix.

In essence, the article is worried that developers will receive less money for their work. The most convincing objections present specific mechanisms that make this happen. The subscription model is consumer friendly, but at a cost to developers. We should not be indifferent about developers or view the relationship as adversarial. Intellectual property protection is not consumer friendly, but we value new works enough to make it law. Adverse effects on the supply side will find their way back to the consumer.

Are these threats serious?

One comparison we can make with GI.biz’s list of threats is to the status quo. Here discoverability and market information are less convincing. How many copies did Cultist Simulator sell on Steam in two weeks? Only Steam and Weather Factory know. Weather Factory practices open production and is transparent about their sales. However, Steam  does not permit developers to publish sales information for their platform. Valve has a notoriously testy relationship with SteamSpy, mirroring the Neilsen/Netflix spat. Title specific information will likely depend on whether the rights are bought outright or on a per-play basis. Not having access to sales data is still a loss, but we are already reliant on 3rd parties for market information.

Discoverability is another problem we already deal with, but could it become worse? A platform prioritizing its own games over third parties sounds like it would. Would a platform have any reason to do this? A glance at Origin Access shows EA titles in the top 10. But then, a purchase of Origin Access implies an intention to play EA games. Extending the list to games I can see on my screen, I find Orwell: Ignorance is Strength, Mad Max, and Cities: Skylines above Titanfall and Battlefield 1. Scrolling down there are a number of excellent indie games listed above cherished titles in the EA back catalogue like Mass Effect or Dragon Age. The costs of making these games are sunk, and so the goal of any platform is to maximize the number of subscriptions. Mediocre games boosted by tweaks to the algorithm carry the risk of the platform being percieved as low value. The only case where such a tweak might make sense is a per-play license that exceeds the cost of maintaining an internal title. But we need to ask: Just what kinds of independent developers are we talking about there? Have I missed an entire genre of independent games that are lower cost and direct competitors to Madden, Need for Speed, Assassin’s Creed, and Battlefield? Platforms should be trying to buy these developers if they exist, not license from them.

Financing is the final concern, but I’d like to reframe it into more than an assumption that revenues drop. If an individual title’s influence on a subscription choice is low, licensing terms will be unfavourable to developers. Reduced revenues mean future projects of similar scope are less profitable, making investment less attractive. Alternatively, since projects are largely self-financed budgets necessarily shrink. But project scope is not fixed. Profit margins can be restored by making smaller games or reusing existing tools and assets. If the resulting games are too small, platforms will need to pay up. This is a different environment for developers, but not necessarily a hostile one.

These concerns aren’t baseless, but are they a threat to developers beyond normal shifts in the industry? Does the fear that developers will face lower revenues outweigh the concern that Fortnite is successful at the expense of other games? Is the potential for algorithmic tweaks a greater threat to discoverability than the shift to Steam Direct? Perhaps we are better served in viewing subscription services as a shift in gaming that carries opportunities along with threats.

Differences under subscriptions

Here is a good article on Eurogamer about game endings. It charts the progress of, well, progress (like the title says), guided by commercial context and technological constraints. Every one of these changes could have a “threat to developers” article written about them, and in a sense they would be right. Arcade machines are not what they once were. Saving permits players to ruin the experience for themselves. MMO’s really do require investments unavailable to independent developers. Steam Direct has meant it is harder to get your game noticed than before. And yet gaming has never been better and more people are making them.

The printing press did not usher in an age of peace and quiet contemplation, but we do not consider that a vindication of its critics. Recognizing the difficulty at appreciating the benefits of a given innovation, how might we think about changes that might come from a broad adoption of a subscription model?

If games are bought outright or licensed for a term (as opposed to a per-play like on music services), this seems to bring a degree of certainty to developers. Developing around expected revenues from a license is a less uncertain prospect than trying to triangulate tastes, price, and attention into a successful release. Furthermore, just as streaming has not replaced Blu-Rays (or even DVDs), we’re more likely to see a hybrid future. Licenses can provide a cushion for a less successful release, or even give a game a new lease on life as is already happening with Humble and Twitch Prime.

The consumption behaviour of players in a subscription service will change. Marginal costs for new games on a subscription service are zero. Players will no longer need to ask “Is this game worth X?” before playing. Not too long ago we were talking about the death of the single player game. Removing the implied price/time ratio puts single player back on a level playing field. What matters is if the game is attractive enough to play and if the time spent is worth it.

Even the GI.biz threats carry their silver linings. Tyranny, Orwell, The Witness, and This War of Mine, are nowhere to be found on the Steam Top 100 but are on Origin Access (Top 70 no less). Even if platforms were to prioritize their own games, third party games can be compared across platforms. This doesn’t just provide an estimate of how well a given game is doing, it identifies niches for particular platforms. Instead of betting everything on ‘charting’ on Steam, a game can leverage success on one platform into launches on others.

There are also clear negatives. Subscription services will likely reintroduce gatekeepers. This benefits incumbent developers, but means we miss out on unexpected successes. These games are good candidates for an ownership model or a niche platform. Signing with a subscription service may just as easily become an aspiration for developers instead of a necessary evil.

One way to gain perspective is to ask if we were to invent the games industry again, would we choose the status quo we seem so attached to? We’ve switched to digital distribution, but in some ways we’ve just replaced walking with clicking. We still buy the product, and the expansion packs are now smaller and cheaper. MMOs and Free to Play are notable and successful exceptions, but the majority of games still follow the old model. Is there any reason to see this as any more natural than an arcade?

One major shift in perspective a subscription model will inspire is a view of games as complements instead of substitutes. It’s hard to see the purchase of a game that’s not yours as beneficial on a storefront. Games in a subscription model will benefit from players being able to switch between games without cost. This is an environment that rewards faster, innovative work.

The benefits and detriments of a subscription model are far from certain, but we should resist the temptation to see it as a threat over a technological shift. Developers who can work on a budget and produce unique experiences are well positioned for a future where players can experiment without cost.


Note on affiliate links: I have an affiliate status with GOG.com for which I am given a portion of sales for traffic I drive to the site. The inclusion of a given title is for illustrative purposes first, but when it is available on GOG I will provide such a link. Naturally I encourage you to do your own price comparison or buy on your preferred platform. I include, on occasion, affiliate links from other broadcasters to support people who helped me in a given post or the cast in general. For this article, Humble Links support the streamer JessyQuil.

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