Video Game Subscriptions: Deconstruction and Game Design for Subscription Services
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This document discusses video game subscriptions as a business model for publishers and platforms. It outlines how music and video streaming services led to the rise of subscriptions. Video games present unique challenges because they involve multiple stakeholders - publishers, platforms, and games. Subscriptions can provide predictable revenue but publishers lose some control over their content. The document analyzes the different types of revenue sharing models - license fees, development fees, and revenue sharing - and how game design should consider the incentives of each model. It argues publishers need to maximize player engagement like time spent and sessions to earn more from revenue sharing agreements.
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Video Game Subscriptions: Deconstruction and Game Design for Subscription Services
- 1. Video Game Subscriptions Deconstruction and Game Design Chris Early VP Partnerships & Revenues, Ubisoft @LuckyEarly
- 2. Video Game Subscriptions Deconstruction and Game Design Chris Early @luckyearly
- 6. Video Game Subscription Services?
- 7. Video Games - Not So Simple Publishers Platforms Games
- 8. Why?
- 10. Platforms • Want Players Tied to the Platform • Content is Devalued Platform is a “Good Deal” • Consistent, Predictable Revenue Stream • Significant Flow of New Content
- 11. Publishers • Rewards Loyal Players • Trading Excess for Predictable • Recurring Revenue means a higher valuation on Wall Street than revenue from transactions • Content depth and variety can be a challenge
- 12. Games • Rewards Loyal Players • Trading Excess for Predictable • Consistent, Predictable Revenue Stream • Protects from impulsive or excessive spending
- 15. Value to Subscription Player Simplicity Large selection of content Play whatever you want for however long you want One low monthly price
- 16. Is it Worth It? Monthly $15/month x 12 months = $180 3 games to 1.5 games Annually $99.99 annually is less than one Ultimate Edition (Especially if your play pattern involves sampling)
- 17. The Subscription Player • It’s not just about the money… • It’s really about the content!
- 18. Value to Developers • Discovery • Acquisition • Leveraging Catalog Titles
- 19. What about Ubisoft? • We’re good at using our Catalog Titles • Promotions Work • In an Multi-Developer Content Subscription: • We have No Control • No Consistency or Predictability
- 21. Deconstructing Subscriptions • Learn the Mechanics • Then min-max the system
- 23. Development Fee Essentially an Work-for-Hire Fee Development Fee - Development Cost = Profit (Little or no ongoing revenues – no IP ownership.)
- 24. The Concept & The Team
- 25. License Fee Essentially an Opportunity Cost Fee Expected Units Sold over Period x Reasonable Margin = License Fee (The more rights you give up, the higher the license fee.)
- 26. License Fee: Design Impact Why does Licensor want your game? Attract New Subscribers New Market for them Recognizable Brand Proven Engagement Retain/Regain Subscribers New “Seasons” or “Episodes” One 40 hour game?
- 27. Revenue Share Player Revenues go into pool Developer gets a share of the pool based on the usage of their game.
- 28. But … what share? Hours Session Days = Share % Total Hours Played of Your Game Total Hours Played of All Games
- 29. But … what share? Hours Session Days = Share % Total Day/Sessions Played of Your Game Total Day/Sessions Played of All Games
- 30. Calculation Example 70%/30% Revenue Share on $15 per month Means $10.50 for the Developers 100 Games in the subscription service Each game played an equal average number of days/hours $10.50 / 100 = 1% = $0.10 per player What if you put your game on sale for $5? 50x more Subscription Players would have to play!
- 32. How to Win? Game the System Maximize Visits, Maximize Hours of Play, It’s just like FTP, right? No Pay Walls No Additional Cost Be Generous! Increasing Rewards • No Penalties Make it fun to stay!
- 33. Design for the Business Model And Win!