Video game developers brace for cash flow as tech companies vie for deals | games

Video game developers are vying for the influx of money from some of the world’s biggest tech companies as they vie to build “Netflix for Games.”

At the heart of the competition are Microsoft and Sony, followed by less gaming-focused companies like Apple, Amazon and Netflix who have all launched subscription services in a bid to lure gamers onto their platforms.

Microsoft has spent four years building its flagship subscription, Xbox Game Pass, which offers unlimited access to more than 100 games for the Xbox family for £10.99 a month. In March, Sony announced its plans to compete directly with Game Pass with a slew of changes to its PlayStation Plus service, which will eventually launch with 700 titles for £13.49 a month (or £99.99 a year), though the focus Pretty much the old titles.

Besides console manufacturers, a handful of companies have launched similar services. Apple Arcade for iPhone and Apple TV offers unlimited access to over 200 mobile games for £4.99 per month; Amazon’s Luna, currently accessing early in the US, allows subscribers to stream 100 games for $5.99; Netflix is ​​experimenting with offering a selection of games for free along with their movies and TV shows.

The competition led to an influx of money into the industry. Microsoft, the world’s second-richest company, has been on an acquisition spree, acquiring Call of Duty and Warcraft publisher Activision Blizzard, Skyrim developer Bethesda and nine independent studios since 2017 alone. Amazon and Apple, the world’s fourth and first richest companies, have similarly deep pockets. Sony, with an undervalued market cap than the tech giants, has struggled to keep pace, and merged with developer Halo and Destiny Bungie earlier this year.

Even those who remained independent welcomed the new model, with game developers paying a hefty amount up front to put their games on the services, drastically reducing the risk of launching a new title on digital storefronts where it could sink without a trace.

“For a lot of actual indie developers, anyone who publishes a game themselves, the chance of it succeeding by putting it out there is very low,” says Tom Davis, of Swedish indie game publisher Thunderfall. “By being able to actually show your game in front of the 25 million people who subscribe to something like Game Pass or something new PlayStation Plus, it actually benefits sales as well — because people are generally talking about the game.”

Deals with the platforms are “actually a very positive thing,” says Tom Mead, technical director and co-founder of Bristol-based Spiral Circus, because it means you can get paid right to develop the ideas you want, without necessarily having to worry about whether your game sells. A set of copies at the end of it.”

There is also widespread hope that the rise of subscription services will lead to a change in the industry’s focus, away from multi-million dollar AAA titles toward smaller, more exotic titles that are not meant to go with everyone in the world.

“Look at Blockbuster,” says a producer at a major publisher who requested anonymity due to the commercial sensitivity of their dealings with the platforms. “I was going to Blockbuster on Friday, not even knowing what games are out there, to look at a bunch of physical games and pick one for the weekend. With Game Pass, everyone chooses everything, they might just play it for a few minutes, but they have the option to find out whether it was for them.”

There are concerns about the future, too. One developer who left the Silicon Valley giant for independence said they worry about what happens when Sony runs out of money. “It works while they fight for platform dominance,” they say — but if a platform wins the battle, can payments to developers be cut even as subscription fees increase?

But even those who don’t earn much from the model agree that it currently works for gamers. Super Rare Games is a British company that only sells physical copies of previously downloaded titles, and Ryan Brown, the company’s “head of word”, argues that the two methods can coexist.

“I use these services, they are undeniably convenient. But for people who feel it, myself included, there are games they want to be able to play in 50 years, and that’s what physical games generally provide: ownership that you can’t get a subscription .”

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