Not All Industry Experts Embrace the Inevitability of Subscription Models

A common notion in the gaming industry is that subscription services will become the dominant business model in the near future. However, not everyone agrees with this perspective. Within this line of thinking, there are various opinions on which companies will emerge as leaders, the role of game streaming, and whether the market can support multiple subscription services from individual publishers. The core idea is that subscription services will take over, pushing traditional sales models to the side as they become more widespread. Consumers may be hesitant to pay extra for games outside of their subscription libraries. However, some industry experts are not convinced that this is the future of gaming. The TV and movie industries have experienced significant disruption due to the rise of subscription services, and some experts believe that the gaming industry could follow a similar path. Larian CEO Swen Vincke has expressed his concerns about subscription models, stating that they could create powerful gatekeepers who decide what games get made and released. This could be detrimental to studios that have worked hard to gain their independence from traditional publishing systems. Vincke's comments add a new perspective to the discussion, which has often focused on the impact of subscription models on consumers, platform holders, and major publishers. He recognizes that some companies may choose to put their games on subscription services, but he believes that this model is not suitable for Larian. The decision to avoid subscription services may seem counterintuitive, but it makes sense from a long-term business perspective. Directly selling games to consumers allows companies to build a valuable and sustainable business by owning the consumer relationship. This is why companies like Ubisoft want to have their own subscription services, to maintain control over their customer relationships and branding. There is ongoing debate about the impact of subscription services on consumers, with some arguing that they are not beneficial in the long run. However, it is interesting to see a successful developer like Vincke making a case against subscription services from a business perspective. Data from Circana's Mat Piscatella suggests that subscription services currently account for around 10% of video game content spending in the US. Moreover, the revenue from subscription services has been additive, rather than cannibalizing revenue from traditional business models. While some may argue that fears about subscription models are unfounded, it is reasonable to consider the potential risks and consequences of this business model. The gaming industry is still in the early days of subscription models, and there is relatively little competition in the space. The experience of other industries, such as TV and movies, can serve as a warning about the potential dangers of subscription models. There are good reasons to expect the games market to develop differently from the music and video industries in terms of subscription services. The way people engage with games is unique, and the appeal of a subscription library is lower compared to other forms of media. Books, for example, have not been a success in subscription models, and the same may be true for games. The economic forces that drove the growth of subscription services in other industries may not be present in the gaming industry. The low-interest rate environment that fueled the spending arms race in TV and movies may not be replicated in the gaming industry, and companies may need to be more careful with their spending. In conclusion, while some industry experts believe that subscription models are the future of gaming, others are more cautious. It is refreshing to hear senior industry figures express their concerns about the potential downsides of subscription models, rather than simply accepting them as inevitable. By starting to work on ensuring that direct consumer sales remain a viable business model, the industry can mitigate the risks associated with subscription services and create a more sustainable future.