No one can doubt that one of the trends current in the entertainment industry is that of the subscription services, generally taking advantage of the potential of the cloud to offer the user an immense collection of music, movies, series or video games at any time, wherever you are.
In the world of video games, Microsoft is the one that has bet the strongest on this business with Game pass, while new competitors emerge such as Google with Stadia or Amazon with Luna. PlayStation also has its own subscription service and streaming game, PS Now.
However, Shawn Layden, former CEO of Sony Interactive Entertainment (currently held by Jim Ryan), is shown very skeptical of this business model. He had already questioned the economic viability of services like Game Pass before, and now he’s done it again on his personal Twitter.
This is a bit old, but the truth remains the same: turning a profit with an entertainment streaming service platform is extremely hard and complicated, not to mention the drastic reduction in revenue for creators.https://t.co/GkemLmmu60
– shawn layden (@ShawnLayden) September 20, 2021
Sharing a story this summer about the number of Spotify subscribers, Layden thinks that “Making a profit from a streaming platform is extremely difficult and complicated, not to mention the drastic reduction in revenue for creators“.
“I don’t judge, I just write …”, Add.
This same summer, in an interview, Layden explained why this business model was not viable, alluding mainly to the high development costs of video games.
“It is very difficult to launch a $ 120 million game on a subscription service that costs 9.99 euros per month. If you do accounts, you would need 500 million subscribers before you start recovering expenses. If there are only 250 million consoles in the world, it is impossible to get 500 million subscribers.“
Layden’s tweet, although brief, especially regrets the situation in which the creators of games are left, or of any content that goes on that platform, seeing their income reduced.
On another occasion, Layden spoke more frankly about a model that he considers unsustainable, in which games cost twice as much as in every past generation, also lamenting the lack of innovation in videogames that would cause having to depend on sequels and already established formulas.
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To put some perspective, the latest official figures speak of 18 million current Xbox Game Pass subscribers, a figure that could be grown up to over 23. However, according to journalist Jeff Grubb, Microsoft is waiting for you to reach 40-50 million subscribers to be able to permanently eliminate Xbox Live Gold, something that probably won’t happen until exclusive games like Starfield start arriving.