Piracy is a huge issue for the entertainment industry and for the console arena specifically. As console games become more expensive
the incentive to pirate a game rather than buy it has increased. There’s very little that can be done on the price; goes the
traditional response. Games are becoming increasingly more expensive and publishers need to generate the revenue to fund future
game development. As piracy increases the cost will increase as the user base of potential buyers becomes ever smaller and so the
circle spirals downwards.
Is there an alternative to this? Can we both provide games in a cheap and efficient manner and still provide the revenue to
publishers that will allow the industry to continue to thrive? One solution that has been talked about is subscription. Making the
games available on subscription at a much reduced price with a monthly charge would potentially allow users to get access to the
games cheaply, reducing piracy, while generating the level of revenue from a good title that should allow publishers to invest.
There are a number of prerequisites for this to work. You need a method of delivery that is digital, which removes the packaging
and distribution costs allowing you to deliver the game as widely as possible for little outlay. You would also need a payment
system that’s seamless and reliable which can be ideally linked to the delivery system to allow for a smooth process for the end user.
This approach has already been adopted on mobile, particularly in the US market, where it has now been up and running for over a year
now on the major operators. Mobile has the advantage that the delivery system covers both digital delivery and billing. Games in the
US can now be bought for roughly $4.99 outright or $1.99 as a monthly subscription.
The industry believes a successful title can keep subscribers for many months, often generating considerably more revenue than if
the user bought the title as a one off payment.
This model is working extremely well on mobile, users get cost effective access to the games and keep those they find enjoyable.
Piracy is reduced as the initial cost is much less and users are willing to experiment on less well known titles. With a simple
reoccurring charge the users know exactly what they are paying and the cost of keeping a title in their library. For publishers it’s
great because there’s a consistent subscription base which provides stability to their revenue and removes the bust or boom nature of a
hits run business. This should allow publishers an ability to manage their ROI and invest better in future products.
Finally it provides a connection between the user of the game and the publisher and forms the basis of loyalty which if
properly exploited by the publisher should better allow them to target games. This is happening NOW in mobile and it's interesting that
for all that mobile has taken from the traditional games industry here’s something mobile can actually offer back!
To Subscribe or not to Subscribe (that is the question?)