There was once a time when video game developers would make a game, release it, and then move onto the next big thing. That time has long since passed. These days, you're more likely to see a new Metroid than you are to buy an AAA game that's never updated, patched or enhanced in some way. Today's big video games aren't products — they're services.
That isn't a new buzzword — "games as service" has been floating around for many years now — but these days, we're seeing big publishers embrace it in a way they haven't before. Developers are looking at ways to make money off games for as long as possible, through downloadable content, cosmetic microtransactions and good-old fashioned loot boxes. For example, here's Square Enix in a financial presentation last week:
Titles that have become global hits recently have tended to be offered via the "Games as a Service" model, and we believe this is going to be the mainstream model for gaming in the future. In developing future titles, we will approach game design with a mind to generate recurring revenue streams.
Square's most successful recent game, Final Fantasy 15, has become a service thanks to patches, downloadable content and Gladiolus's abs. (There's also plenty more en route.) Though the publisher is looking to sell developer io Interactive, whose most recent Hitman was an episodic (and critically acclaimed) "service game", Square appears to be preparing for a future in which games change constantly.
And here's Ubisoft boss Yves Guillemot, speaking during a financial call earlier this month:
We are transforming our games from standalone offline products into service-based platforms where we can continually interact with and entertain our players.
Adds Ubisoft chief financial officer Alain Martinez:
The philosophy of all the games that we make is to be able to justify and to bring live operations for a long life, as long as we think it fits the game. What we said is clearly considering the fiscal year '19 [April 2018-March 2019]. We feel comfortable that instead of the 17 per cent recurring players' investment that we had initially anticipated, we feel that we now can cater for plus over 25 per cent of our revenue coming from that. That will come from all the games more or less, but that will also include Assassin's Creed. I hope that answer your question.
Electronic Arts, too, has embraced the idea that video games should never stop getting new stuff — at least until their sequels come out. From Star Wars Battlefront to FIFA to BioWare's soon-to-be-announced new IP, almost all of EA's upcoming games are designed to keep making money for months and even years after they launch.
Here's EA CEO Andrew Wilson, speaking during this month's earnings call:
Games as a service are reshaping our industry, and EA is positioned to lead. Our investment in an EA digital platform that connects players across games, franchise and devices also provides more data from our games than ever before. With the data and capabilities of our platform, we're able to do things differently, move faster, and innovate for our player communities. Amazingly creative games combined with services like Ultimate Team, our Battlefield network, multiplatform experiences and subscription programs like EA Access are the future of this industry. With every player that joins our games, every game session, and every engagement in our live services, we are adding strength to EA's Player Network.
Although other big publishers, like Activision-Blizzard and Take-Two, didn't explicitly mention "games as service" on their May earnings calls, their strategies are similar, from Hearthstone to GTA Online.
This big shift was always inevitable. The video game industry is littered with the corpses of game studios that took the fire-and-forget approach, and for developers, the best lessons are often learned once you've already shipped. Just look at the likes of Blizzard's Diablo 3 and Ubisoft's Rainbow Six Siege for evidence that games can get so much better once they have been out in the wild for a while. The most lucrative AAA games in recent memory include Destiny, Overwatch, Mario Kart 8 and many others with long, sprawling lifespans. The most lucrative indie games of late look similar, from Minecraft to Ark: Survival Evolved. Even games that are traditionally centred on single-player modes, such as Assassin's Creed and Red Dead Redemption, which have dabbled in multiplayer but earned accolades for their campaigns, will likely have large "service" components when we next see them.
This may be good news for video game fans who want to get as much as possible out of the games they buy. With developers spending more time investing in games post-launch to ensure those games are making as much money as possible, it's more likely we'll see stories like Destiny, in which a game is fine-tuned and tweaked and changed to the point where it becomes unrecognisable from the product we saw at launch, often for the best.
But it's bad news for one other big video game company that reported earnings this month, one that relies on an ecosystem in which we all buy games and then trade them for new ones when we're done...
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