100 percent this As the prices are rising for the consumer they will look elsewhere to try and save money and keep their hobby going without the need to break the bank.
Personally the rise in $70 games doesn't make sense to me as its not across the board for all publishers such as CoD from Activision and Godfall from Gearbox.
Disagree, the price rise was long in the making with them being stable for 2 generations now. Game dev cost have shot through the roof, $10 hike isn't the problem. The problem is lack of regional pricing, some markets are going to get fucked over for no reason. And with value on offer on other platform, Sony run the risk of reduced revenue if more and more of these games are available via a subscription. But, my over-arching point was more about the impact on gaming industry as a whole, rather than Sonys wallet getting little bit lighter. With race to acquisition for these publishers, it's only a matter of time before the gaming space is flooded with different subscription models.
Which brings me to my next point, the trouble with gaming subscription model has always been two-fold, where does it leave your lesser known indie to AA games which are not on any subscription? Will folks pay $19.99-59.99 to play these games? Just look at TV/movie space, how many folks do you think use cable these days? Or even go to theaters to watch your lesser known movies? How many folks even buy these content physically/digitally? I can't even recall how many subscription services I currently pay for, it's close to double figures already for TV/Movie consumption alone.
If subscription model gains foothold in this medium (which it will, its inevitable with other corporations looking to invest). It'll change the spending habit of your consumers, the prestige titles/IPs/AAAs stuff will continue to sell well. But, anything not belonging to that category or not on a sub service is dead in the water. Also, the talk about sustainability is valid, your mega-corporations who have been in the business long enough (like Microsoft) will be willing to write the losses for a long time before it turns profitable But, newer players in the ilk of Google, Amazon, Apple won't be as patient if the trajectory of growth doesn't align with their expectations. If it's a sunk cost, it'll be a write off and all those publishers/devs working those banner are just gone.
The current Game Pass economic model simply makes no sense from a business standpoint. Which means it's just a phase artificially kept up by Microsoft to gather users, and at some point the rules of the game are going to change.
Game Pass ultimate is $180/y. If even just 4 AAA games will be added to the service at release over one year, it means the publishers are collectively letting go of more than $200 of launch revenue per user. Sure, in most cases Game Pass will have a larger install base than the expected sales for a single game, but it's not just those games on the service, it's more than 100 in total, a lot of which could have sold for $60 at launch, or would still sell for $30-$40 now.
Bottom line is, if you just took the revenue from Game Pass and split it for all the games that have been in the service, a good number of them would have done so at a loss. The numbers don't add up. It's also simple common sense that if entering Game Pass were advantageous for publishers compared to just selling games in the traditional way, basically everybody at this point would have done so. Yet Microsoft has to chase down individual deals, and even buy entire billion-dollars publishers to secure products on the service.
Why? Because Microsoft is footing the bill for the time being with the knowledge that even though the service is not profitable right now, once it reaches a critical enough mass of users it could easily become so if they just tweak a couple of factors: direct money in (price of the subscription), money out (development costs), and more focus on sources of revenue irrespective of an initial sale to the consumer (microtransactions). I don't know which one of these will give first, or if a combination of all of them, but it's simply economically impossible for the current price/offer to remain untouched going forward.
As long as Microsoft did this with their own bunch of first party and the odd third party AAA here and there, it didn't really matter. But if they start really pushing for this, basically using their pre-existing incalculable amount of money to force the conversion or outright kick out those who would have maintained a traditional game sales and ownership model, in the long term the end result could very easily be a complete shift in paradigm for the worse for the user (if they succeed), or a titanic industry crash (if they fail).
No subscription model makes sense economically, until it hits the point where the user base is large enough to break even, or where a couple of dollars in price rise will return in a profit. MS have accounted for all of this years ago, and their growth rate is fantastic, the subscribers went up from 10 million to 15 million in space of less than 6 months. They aren't spending $7.5 Billion on Zenimax, if estimates aren't tracking accordingly. The overall growth of Game Pass is only going to trend upwards as they start to hammer home the value of it with next-gen around the corner.
2022 is where you'll really start to see the service hits it stride when MS studios starting churning out those games on a regular basis, 23 studios are a lot to fill out content on Game Pass with regularity. If they have 50 million users by mid-gen, assuming the price of sub remains the same at $10 (which it won't), they'll generate $6 Billion in revenue every year. The biggest plus of a subscription model is that, once the users are locked in, that stream of revenue is extremely stable. You won't have the ebbs and flows every quarter which you see with current traditional model, if there is a huge void between big releases. Most users will stick through some of those "lull" months, if there's promising content in the future.
The worry with subscription based future is not so much as MS pulling the rug, but more so newer players doing it.
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