Making subscription platforms work | Opinion
Kostyantyn Lobov
Wednesday 13th July 2022
So many things come as a subscription these days -- from your favourite streaming platform, to your car.
The games industry is, in some ways, a latecomer to this, but it's making up for lost time. Xbox Game Pass now has more than 100 titles, including several exclusives, all for £10.99 per month. Sony's newly-tiered PlayStation Plus offering also boasts several hundred titles (admittedly, many of those are back-catalogue, but there are premium titles there too). From the perspective of a consumer, the value proposition is undeniable and, at times, seems too good to be true.
How do the financials of the subscription model stack up from the studio's perspective? There are two things to note here:
1. Platforms do not publicise their deal terms and payment structures, and the people who have seen them are most likely not allowed to disclose them because they are confidential.
2. There isn't a 'one size fits all' approach -- that much was clear from one of Phil Spencer's previous interviews, in which he said that Microsoft's Game Pass deals with developers were all over the place (but in a good way).
Kostya Lobov, Harbottle & Lewis
It, of course, makes sense that different studios will be offered different commercial terms as there are a number of variables that can impact the financials being offered. If the platform wants the game to be made available on an exclusive basis, then it is likely to offer a potentially sizable up front payment (paid as a lump sum or in tranches). If the game is going to be a non-exclusive title, the platform could offer a traditional usage-based revenue model. Or there could be a combination of both.
Ultimately, though, from a financial perspective, having a
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