Game Pass Won't Become Second Netflix, Analysts Say
Game Pass is quite successful, but it's unlikely to be to video games what Netflix was to the movie industry. At least according to one analyst.
We are long past the days when gamers and publishers doubted the future of Microsoft's Game Pass. The Redmond giant's subscription has grown in popularity and there are rumors that competitors are thinking about similar services (or at least hope for GP's debut on their platforms). In fact, some say that this is what the game market will look like in a few years, similar to what happened in the film and music industry.
However Piers Harding-Rolls from Ampere Analysis believes that Game Pass and similar services will never completely dominate the gaming industry. During a presentation at the GDC 2022 conference (via PC Gamer), the analyst said that such subscriptions currently account for only 4% of the market. Admittedly, their share is expected to increase in the coming years, but only to 8.4% in 2027 (according to Ampere estimates).
The game market is not Netflix
Harding-Rolls gave several reasons why he doesn't expect Game Pass and similar services to displace traditional game sales. Microsoft's service isn't growing as much as Netflix. Even with the addition of EA Play GP titles, it still includes "only" about five hundred games. In fact, the attractiveness of subscriptions is mainly influenced by freshly debuting titles that are going straight to Game Pass.
But more importantly, Harding-Rolls sees the gaming market as very different from the movie market. In fact, gamers spend the most money not on access to titles, but already during the game. According to Ampere Analysis, in 2021, as much as 79% of video game revenue will be made up of in-game transactions, which means microtransactions, among other things. This is not a big secret - just take a look at the financial reports not only of the biggest publishers - but it's a diametrically opposite situation to the movie and music markets.
Game Pass encourages gaming (and spending)
The analyst also reiterated what was mentioned for a long time: Game Pass subscribers are spending more time and money on gaming. Not only are users more likely to try out new titles. They also invest in DLCs and microtransaction but also full versions of games not available on GP.
Harding-Rolls is unsure of the reasons for this phenomenon. Probably in part due to the fact that subscribers have already paid for new titles. It's also possible that Game Pass simply attracts people who are more interested in playing video games.
