Thinking About Game Pass for RTS

A few high-level thoughts

A few weeks back, the United Kingdom’s Competition and Markets Authority opted to block Microsoft’s proposed acquisition of Activision-Blizzard, mostly due to concerns around cloud gaming. This was disappointing news to many of us in the StarCraft community, who had hoped the deal would lead to more investment in the franchise. I myself was pretty excited for it, noting that the business opportunity offered by StarCraft was just as large as the one offered by Age of Empires - which Microsoft has spent the past decade patiently growing.

Anyway, there’s a lot going on with the decision, like the role of cloud gaming, potential over-consolidation in the industry, and all that. I have my own opinions, but it’s one of those situations where I don’t think my own perspective offers much on top of what’s already out there, and I think there are people better positioned to write better articles on it.

What this news did remind me of, though, is Game Pass, and the fact that the acquisition would have enabled Blizzard games to appear there for the first time. And this got me thinking about subscription models and how they apply to RTS.

Pay-to-not-play

I see video games as a market where many people overconsume - they purchase significantly more stuff than they actually consume in practice. And I don’t mean that just in the sense of memes about Steam sales and whale-ish purchasers who have gigantic libraries of never-installed games, but in the general sense of most consumers more broadly. For example, I think it’s common knowledge that the percentage of purchasers who get even the first achievement in most games is pretty low:

Half the people who buy your average real-time strategy game don’t even play it for more than a few minutes!

I fall into this camp myself. I buy lots of games, often on sale, and for one reason or another I never get around to playing them. But I never return any of these games, because I reserve that for products that are functionally broken.

I don’t think this is necessarily specific to real-time strategy. But whatever games it does apply to, I think it results in a lot more money flowing to developers than is actually materially justified by the playtime that players are putting in. And where I think this is especially relevant to RTS is that this doesn’t seem to be a genre where there is an excess of money just sloshing around and fattening everyone’s pockets.

Personally, I think it’s OK if developers make money from the fact that people’s willingness to pay is higher than their actual ability to play. I’d rather be a part of an ecosystem where I have an excess of games in my library than a shortage of games, if that makes sense.

Where this troubles me with respect to subscription programs like Game Pass is how they calculate compensation to developers. Any formula that diverges from willingness to pay - like actual playtime, or attachment rate, or things like that - has potential to make developers worse off. So the value of a subscription program for an RTS developer really depends, I think, on how that program is setup. A flat fee from the platform owner, for example, may not be enough to make developers whole. A guaranteed amount of in-platform promotion, though, may make up for it, especially for smaller and lesser known creators. And a revenue share agreement may make developers even more money than they otherwise would have made, because they would soak up the largesse of larger and more profitable games.

Basically, I don’t think participation in a subscription program is a clear win for every RTS; it really depends on how the program is setup.

A La Carte

I think an interesting aspect of real-time strategy, compared to other games, is that it features several partially overlapping audiences. The campaigns, AI skirmishes, custom games, and ranked multiplayer are very different game modes, with different target demographics.

If I pay $50 for Age of Empires IV and only play its multiplayer, you could argue that I got a raw deal: I didn’t benefit at all from the game’s single-player budget, like the spiffy cutscenes and professional quality camera work. Similarly, if you pay $50 and only play its campaign, you could say you were similarly screwed: why are the developers spending all this money on balance and design patches when they could be making new missions?

In both cases, even though we’re playing the game actively, we’re still arguably overconsuming.

But I would argue that the whole is greater than the sum of its parts, and the willingness of both you and I to overconsume enables a grander experience for both of us. Games have budgets and if everyone were only paying for the little slice of a game that they consume, then the entire experience has to become smaller, and everyone ends up worse off.

I think the counter-argument here is that by offering an a-la-carte experience, an RTS game has the potential to monetize a much larger audience, because there isn’t a high sticker price preventing players from giving the experience a try. I think this line of thinking applies both to games-via-subscription, like Game Pass, as well as to free-to-play more broadly.

I think that’s a pretty fair line of thinking, but I would add the caveat that it requires more rigor than just handwaving about the potential for long-term monetization; sometimes the financial benefits of overconsumption are pretty darn large.

For example, take Age of Empires IV. It’s frequently among the top selling games on Steam, and it’s probably sold millions of copies. It’s also a game where only about 60% of players complete the tutorial (which the game boots into), and only about half complete the first handful of campaign missions.

I don’t think it would have been better for the developers to lose about half their sales - let’s say, $50 million dollars - because half their would-be-purchasers didn’t really touch the game. And I don’t think there’s some large group of people out there who didn’t pick up the game because it cost money, but who would have otherwise tried it out and spent literal tens of millions of dollars on it. The game was, to be honest, released in a not-great state.

Nowadays the game is on the up-and-up, so it’s probably gotten to the point where it makes sense to invest in long-term monetization. And once that’s in place, it would make sense to follow-up with a free-to-play conversion. (The game has always been available via Microsoft’s PC Game Pass, as far as I’m aware.) But I don’t think either of these decisions would have made sense at launch. Even for PC Game Pass, I think the only reason the developers launched with it was because the game was published by Microsoft, who otherwise freely admits that Game Pass cannibalizes sales.

What really benefits the consumer?

I think it’s a good thing when developers get paid well for making real-time strategy games. I think it’s good for all of us. It creates a healthy ecosystem where consumers get to play new games on a regular basis and developers are incentivized to continue making those games.

So I think it’s worth asking what sort of business model benefits the ecosystem as a whole, instead of asking in isolation what’s good for any individual party. For example, I think it’s reasonable to point out that overconsumption is arguably bad for consumers, and therefore it’s a good thing that subscription programs help solve it. But my perspective, from looking at how subscription programs have worked in other industries like movies or music, is that they seem to consistently disadvantage creators.

On the flip side, there are also a number of Game Pass success stories - games that would have flown under the radar, but thanks to being freely available by subscription, ended up building a huge playerbase. But I wonder how important that is in a smaller genre with relatively fewer new releases and a relatively more dedicated audience.

I think one answer here is that accessibility and lowering the barrier to entry matter more than anything else, and any financial concerns associated with subscription programs (or free-to-play, for that matter) can be addressed by long-term monetization. I think this will work for some games, but not all of them. Plus, I think it incentivizes developers to focus more on mass market, easily monetizable content - like skins or other in-app purchases - over (subjectively) higher quality single player content.

I think these are hard tradeoffs to make; writing this article made me think that I really need to go out and interview some developers to get a sense of the business landscape. Heck, one of the reasons this article is a week late (sorry about that) is because there’s so many different angles to consider and how they apply differently to different games.

My general thinking so far is that in a smaller genre like RTS, it’s probably better to stick to a more classic business model for a game’s initial release, while transitioning to a live service model as the game gets better with time and develops better long-term monetization options. Participation in a subscription program can come later, unless the subscription platform owner offers substantial sweeteners to make launching on-platform really worth it. But I think I need to talk to more folks in industry to get more data.

Anyway, this was a bit more stream-of-consciousness than I would have liked, but I didn’t want to miss two weeks in a row. Until next time!

brownbear

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