Live Service as a Business Model

[Kurth]

Any thoughts on the push we’ve been seeing emphasizing live service games? Feels like from a business model POV, that’s not a great path. I know big companies must look at the live service thing and the micro-transactions and feel like it’s the next best thing to printing money, but it seems like a revenue stream with a really hard cap. I mean, how many people do you know that are deeply involved in a more than one live service game? It feels like as companies push out more live service games, they’re just cannibalizing their (or others, hopefully for them) existing install base.

I think about my son, who drives me nuts because he’s now 20 and has been playing one game and one game only since he was 10: Destiny. He buys all the DLC and the season passes and whatnot, but all in, he’s spending maybe $100 annually on that game. I, on the on the other hand, played Destiny (and Destiny 2) but would rather shove an ice pick in my ear than play any one game for a decade. It would kill me to miss out on all the other great games out there. I’d have ridiculous FOMO. So, in comparison to my son, I spend, on average, about a month playing any one game and then move on to something else. I probably buy 10-12 games a year at a total cost of $600-$750. Seems like a much better model for the publishers to be pushing.

In the end, it’s just hard for me to believe there are enough people plowing sufficient money into live service games and their micro-transactions to make that model more profitable long term than pushing high quality single player content (Horizon, RDR, Last of Us, Ghosts of Tsushima, Halo, etc.).

Am I missing something obvious?

[Blackhawk]

So, in comparison to my son, I spend, on average, about a month playing any one game and then move on to something else. I probably buy 10-12 games a year at a total cost of $600-$750. Seems like a much better model for the publishers to be pushing.

I'm guessing that each publisher gets ~$70 of that. That's all they care about - their own cut. And unless it's free-to-play, each publisher gets $70 plus whatever gets ponied up later. Even if it's just one every 25 users that spends money, and one in every hundred that spends a lot of money, that's more profit than sale-and-done. And I wouldn't be surprised if they're willing to put out nine break-even games if every tenth is a money faucet.

With that said, I'm also not sure that it's going to stay a sustainable model as it grows, and for the exact reasons you stated. I've hears little hints here and there that developers are starting to question the wisdom as well. People are only willing to invest that much in so many games, and it's usually one at a time, for a long periods.

[Rumpy]

Live service games are the new MMO. I don't think it's necessarily anything new, but you can tell the MMO isn't as popular as it once was and peaked long ago, and companies have figured out that they can use the MMO model on pretty much anything now.

[Jaymann]

I haven't paid any ongoing fees for any game since City of Heroes. Don't plan to ever do so again.

[Alefroth]

ESO has pulled in $2B in 10 years.

[Pyperkub]

And World of Warcraft still fills the blizzard coffers.

[Blackhawk]

The MMO market changed, it didn't collapse. UO hit and people thought it a niche curiosity. Everquest hit and drew in some 700,000 subscribers and the industry's eyes got wide. World of Warcraft hit and blew everyone out of the water. Shortly after a hundred MMOs were announced and flooded the market, and the industry found that most people play one MMO long term, then switch to another, and that the core audience simply wasn't big enough to support a hundred separate products. Most shut down or were transferred to smaller 'maintenance' companies that sort of kept them running in the background for those willing to pay. Ever since, there have been no more than a handful of active, successful mainstream MMOs (WoW and ESO are the only two you hear much about these days.)

It was the same problem - there are only so many people willing to pay to play. Throw too many products onto the market, and you either have one or two winners and the rest lose, or you spread the customers out so thin that nobody is making money.

[GreenGoo]

I pay a yearly fee for PS+, I pay a yearly fee for Nintendo's online play, and I pay Humble Bundle 3 months at a time for a random selection of (usually crap) games.

I think I'm part of the problem.

[Scraper]

In general I can't stand online FPS games. I have zero interest in playing Call of Duty online, so to expand that and make it a larger FPS with a bunch of kids jumping all over the map does nothing at all for me. BUT the younger generation seems to really enjoy them. Most gamers I know under the age of 20 would rather play Fortnite than the latest Resident Evil.

[Blackhawk]

We have a hobby whose prices have barely budged over the last 40 years, and nowhere near as much as inflation dictates they should have. What we're seeing is the alternative. We say we want games with no live service model, no subscriptions, no battle passes, and no microtransactions. Pay one price, and you own everything. Ok, are we willing to pay $120 per game? Inflation says that we should be, but we're still balancing between $60 and $70. The newer aspects of the business model are largely to compensate for that.

If you're spending extra, you're not part of the problem. You're part of the hobby. That's just how the hobby works now, and it works that way (partially) because of the pressure we, collectively, applied to keep base game prices down.

People can certainly play games without spending extra, but some types of games are blocked off, or are extremely limited as a result. For some that doesn't matter, and that's fine, but it doesn't mean that we get to look down on people who play differently, or that they're wrong for paying for what they enjoy.

When I see people drawing lines in the sand over fees, I see people refusing to budge when games went from disks to digital, when video went to streaming, when music went to services. It's perfectly fine - but it's still standing still while the world moves around you, and declaring that the old way is the only way.

Sometimes different is better. Sometimes it's worse. Sometimes it just different.

[Blackhawk]

In general I can't stand online FPS games. I have zero interest in playing Call of Duty online, so to expand that and make it a larger FPS with a bunch of kids jumping all over the map does nothing at all for me. BUT the younger generation seems to really enjoy them. Most gamers I know under the age of 20 would rather play Fortnite than the latest Resident Evil.

Most gamers under 20 grew up in an era where socializing and friendships were managed mostly online. That including gaming online with those friends isn't much different than us wanting to hang out at the mall/in Matt's basement/driving around/whatever.

[Scraper]

In general I can't stand online FPS games. I have zero interest in playing Call of Duty online, so to expand that and make it a larger FPS with a bunch of kids jumping all over the map does nothing at all for me. BUT the younger generation seems to really enjoy them. Most gamers I know under the age of 20 would rather play Fortnite than the latest Resident Evil.

Most gamers under 20 grew up in an era where socializing and friendships were managed mostly online. That including gaming online with those friends isn't much different than us wanting to hang out at the mall/in Matt's basement/driving around/whatever.

I agree completely. My 14 year old daughter will actually leave hanging out in person with her friends to come home and play fortnight with them.

[Rumpy]

The MMO market changed, it didn't collapse.

Yeah, that's what I'm saying. It peaked long ago, and I don't think there are nearly as many of them now still operating. So companies have had to use a similar model on other game genres to get a stream of revenue.

[Rumpy]

When I see people drawing lines in the sand over fees, I see people refusing to budge when games went from disks to digital, when video went to streaming, when music went to services. It's perfectly fine - but it's still standing still while the world moves around you, and declaring that the old way is the only way.

I'm actually surprised game prices had stayed the same for so long. Especially when games have become more expensive to develop, taken longer to develop and gotten bigger in general. But I do have a concern about a tipping point over perceived value. In some markets, the price was already high to begin with. We were already at $70-80 in Canada before the price hikes, now the price hovering at $90-100 on basic editions, even more for deluxe editions. When The Crew: Motorfest came out, Ubisoft was charging $200 for the deluxe edition, and I'd be horrified at what that would be in the Australian market as I know prices there are already higher in general than Canada's. But as a gamer, I have to say, I'm feeling the pinch. I'm a gamer with limited income and I have to watch what I buy, and I normally stick to sales. These new prices will almost make sure I don't buy new releases. Even when I'd like to support a developer I like, because at the end of the day, I personally feel I'm not getting all that much value at those prices.

[GreenGoo]

I mean, yes, game prices have moved upwards incredibly slowly from the 80's to today when compared to inflation, but who is going to buy a game selling for $250+?

Even with prices where they are, the gaming industry is worth billions. Seems like a mistake to price yourself out of that market.

And Playstation and Nintendo games are both approaching $100 on release day, with many refusing to drop in price even after demand has waned. Given that I balk at 20 bucks for a game these days, they are unlikely to ever get $100 out of me.

I'll just keep playing indy games, or games that are heavily discounted due to age and low demand. The PC market is a buyer's market, and likely to remain so for years to come. Even if Steam drifts their prices upwards.

edit: Random numbers are in CDN denomination.

[gbasden]

I disagree, for me. A game like BG3 or Helldivers that has given me huge numbers of hours of entertainment is easily worth the money. When I'm at 50 cents an hour or less, I would rather support the developer rather than wait for years to get it more cheaply.

[Rumpy]

I disagree, for me. A game like BG3 or Helldivers that has given me huge numbers of hours of entertainment is easily worth the money. When I'm at 50 cents an hour or less, I would rather support the developer rather than wait for years to get it more cheaply.

I don't see it as a matter of agreeing or disagreeing. It's more about what one can withstand. And for me, I guess it would have to be entirely dependent on the game genre. As an rpg, I agree that BG3 (which I did buy for $100 so that I could play with friends), as a game that offers many many hours of content that is worth it. But if you're selling me a 10 -hour fps at the same prices, f-no. And paying $100 for a game in general makes me balk.

[gbasden]

I disagree, for me. A game like BG3 or Helldivers that has given me huge numbers of hours of entertainment is easily worth the money. When I'm at 50 cents an hour or less, I would rather support the developer rather than wait for years to get it more cheaply.

I don't see it as a matter of agreeing or disagreeing. It's more about what one can withstand. And for me, I guess it would have to be entirely dependent on the game genre. As an rpg, I agree that BG3 (which I did buy for $100 so that I could play with friends), as a game that offers many many hours of content that is worth it. But if you're selling me a 10 -hour fps at the same prices, f-no. And paying $100 for a game in general makes me balk.

Agreed - I nearly always wait for reviews to get an idea of how much gameplay value I will get out of a given game. Unless that 10 hour FPS is from one of my favorite studios, it's going to wait for a sale. Something that I will get 50-500 hours from, though, I normally just pay full price.

[Torfish]

When I'm at 50 cents an hour or less, I would rather support the developer rather than wait for years to get it more cheaply.

100% agreed

[Rumpy]

I disagree, for me. A game like BG3 or Helldivers that has given me huge numbers of hours of entertainment is easily worth the money. When I'm at 50 cents an hour or less, I would rather support the developer rather than wait for years to get it more cheaply.

I don't see it as a matter of agreeing or disagreeing. It's more about what one can withstand. And for me, I guess it would have to be entirely dependent on the game genre. As an rpg, I agree that BG3 (which I did buy for $100 so that I could play with friends), as a game that offers many many hours of content that is worth it. But if you're selling me a 10 -hour fps at the same prices, f-no. And paying $100 for a game in general makes me balk.

Agreed - I nearly always wait for reviews to get an idea of how much gameplay value I will get out of a given game. Unless that 10 hour FPS is from one of my favorite studios, it's going to wait for a sale. Something that I will get 50-500 hours from, though, I normally just pay full price.

And with prices being higher now, I have to be more critical of what I end up buying. Would have to end up looking at the developer's history to see their track record.

FYI, I just finished Deus Ex: Mankind Divided, and although I enjoyed the game, with it feeling unfinished, I'm glad I didn't buy this game at full price. Developers will have to stop doing tricks like that if they expect games to be bought with a high price tag.

[Alefroth]

This is why GamePass and PS+ are really good deals. I rarely pay full price for games, and still the subscription services pay for themselves over a year.

[gbasden]

FYI, I just finished Deus Ex: Mankind Divided, and although I enjoyed the game, with it feeling unfinished, I'm glad I didn't buy this game at full price. Developers will have to stop doing tricks like that if they expect games to be bought with a high price tag.

Huh. I loved Mankind Divided! I think I've finished it three times. I paid full price for it at launch and always felt like I got my monies worth.

[Blackhawk]

I also think that if gaming platforms displayed prices as a percentage of income, people would be delighted at how much game prices have been falling.

[Rumpy]

FYI, I just finished Deus Ex: Mankind Divided, and although I enjoyed the game, with it feeling unfinished, I'm glad I didn't buy this game at full price. Developers will have to stop doing tricks like that if they expect games to be bought with a high price tag.

Huh. I loved Mankind Divided! I think I've finished it three times. I paid full price for it at launch and always felt like I got my monies worth.

I felt it ended rather abruptly. Like they ran out of time or money before the publisher told them it needed to be released. Ending the game on a note of getting to see meet with the big boss (and not doing so) doesn't feel like a proper ending. Felt like the game could have had an extra location after London. I loved the gameplay though, and I loved the environmental design. And I loved the future Prague, which reminded me a lot of HL2's design.