I’ve got this shower thought hunch about why corporations are so into subscription services rather than sales.
If you look at Steam, a 60 dollar game nets Valve around 20 bucks (30%) for every sale. On the other hand a subscription like Xbox Game Pass can only get Microsoft a maximum of 16 bucks per month, not even counting how much they pay to the developers included in the program.
So at least from this shallow reading, subscriptions should be worse than sales.
But on the other hand, there are some advantages which are obvious.
First off, casual users might not even be a potential loss for more expensive games. Besides that, it further alienates consumers from specific products they might want to consume, taking away developer power. And finally lots of people might just forget to cancel it because “it’s so cheap” even when not using it.
But my shower thought was: what if this is favoured because it’s worth much more as a financial asset?
Sales percentages are unpredictable and depend too much on third-party developers. If only flop games come out for a month, Valve will only learn about their lost potential revenue that same month. It’s all a series of events.
On the other hand, subscription numbers are easy to track. If they go down, Microsoft will have at least a month of a heads up. If they go up, they can know beforehand that they’ll have more money in the future. They are much more stable. They’re financial assets.
Does this make sense? Has somebody who actually knows what they’re talking about ever written about this?
In terms of game pass specifically, the point of the subscription service to was to make their platforms—xbox series consoles and I don’t know how they distribute its games on windows but I know it’s not steam—look not attractive and corral users in. Even with this the PlayStation sold much much better than Xbox. My hunch is that it’s because of the games library. Xbox’s is really bad so they invested in game pass. The service itself IMO is unsustainable. Down the line they will have to make some changes like raising prices or not having big budget first party games on it .