Millions of people have long had music playing on their headphones from Spotify, Apple Music, or other similar services. Original shows and movies from Netflix, Disney+, and Prime Video have garnered loyal fan bases and generated heated discussions. Our bank cards are charged every month for cloud storage, antivirus, medical and courier services, and a host of other services. It would seem that people have already become accustomed to subscription service business models.
However, when it came to video games, opinions were divided and the debate flared up with renewed vigor. What is the problem with subscription-based distribution of games, what are the advantages and disadvantages of this method, and what implications could the increased role of such gaming services have for the gaming industry?
Where did gaming subscription services come from anyway?
The idea of paying for games once a month is not new. It was primarily associated with online games, because the money from players' monthly subscriptions allowed developers to maintain the servers on a constant basis and regularly add new content, which is critical for MMORPGs. The first game in this genre with a paid subscription is considered to be Meridian 59 from 1996, but you probably haven't heard of it, but of the much more popular RuneScape, EverQuest and World of Warcraft.
In the early 2000s, the concept of "games as a service" was not yet widespread, but it was the success of MMORPGs that forced developers and publishers to think about a new business model that was fundamentally different from buying a game for a fixed amount. Blizzard Entertainment felt this especially strongly, as the entire vector of its development was radically changed by World of Warcraft with its unprecedented success.
The company decided to focus on similar service games and abandoned unnecessary experiments, which is still felt today. You can read more about this in the book Play Nice: The Rise, Fall, and Future Of Blizzard Entertainment by Jason Schreier, the Ukrainian edition of which is due to be released this year. Fans of the classic Warcraft as an RTS will definitely be interested – and sad.
However, only Chinese companies like Tencent began to massively adopt the MMORPG experience in the "zero" years. In addition, Chinese games outside of Asia were perceived rather negatively at that time precisely because of aggressive monetization. Jokes about Chinese and Korean MMORPGs, which brazenly asked players for money for tangible advantages for the character, still exist in the minds of some players. I personally came across the first attempts by Asian companies to make profitable game-services on the example of Seven Souls Online from Neowiz Games. A modern gamer may know this company from the game Lies of P, which it was the publisher of.
With all that, in the early 2000s, Western game companies still believed in the benefits of the premium model of video game distribution. There were isolated experiments with microtransactions, but the gaming community perceived them as aggressively as possible. Just think of the horse armor in The Elder Scrolls IV: Oblivion, which Bethesda still mentions as an example of bad DLC. By the way, it is interesting that the scandal surrounding it did not affect sales in any way: the developers shared information that they managed to sell millions of copies of this controversial addition.
There were attempts to implement subscription game distribution as early as the 1980s. For example, GameLine offered exclusive Atari 2600 games over a phone line. The technology and business model were well ahead of their time, but many players were put off by the price: $60 for the hardware, $15 per month for a subscription, and $1 for each game, which could only be stored on the console for a week.
So to get the most out of a GameLine subscription, you would have had to pay $19 a month in 1980. Adjusted for inflation, that's about $74 today. Of course, the comparison is a bit crude, as the video game market has changed a lot. But it's still telling enough for those who complain that modern subscriptions are gradually becoming too expensive.
However, the most important step towards both games-as-a-service (GaaS) and gaming subscriptions was the advent of Xbox Live and PlayStation Plus. These were paid subscriptions that gave access to online games on consoles and other benefits, such as free games or cloud saves. Of course, these services received their share of criticism, because multi-platform games on PC could be played online without additional payments. By the way, it was Microsoft that first invented charging for access to the online features of video games.
Xbox Live and PlayStation Plus demonstrated that not only MMORPG fans, but also a more casual and mass audience are willing to pay monthly. Let's not forget that at one time, PlayStation 3 was even bought as a Blu-ray player, and only then did they think about games. That is, platform holders gained access to a new audience. Then the further fate of video games was determined - and it was connected precisely with regular payments for various services and content.
If you cover all aspects of the topic, you can write a book. After all, you must definitely mention the failed attempts to make the Xbox One a multimedia center, and not just a game console. On the other hand, the PlayStation 3 processor architecture – Cell – played a role. Although it gave great opportunities, it was difficult for developers to work with it, so during the seventh generation of consoles the dominant platform for studios and publishers became the Xbox 360.
Add to this the almost impossible dreams of video games not tied to "hardware", where all calculations are performed in the cloud, various niche startups for gamers, attempts by giants of the level of Apple and Google to tear off their own share of the video game market, which, as it seemed at the time, would never stop its rapid growth, and many other factors. You can dig into interviews, patents, failed models that existed for a few months or even less for weeks. So let's get to the main thing.
The failure of the Xbox One, the rapid strengthening of the positions of the PlayStation 4 - and, by inertia, the PlayStation 5 - changes in the forms of consumption of video game content, the gradual approach to the conditional limit of the audience of people who want to play video games on consoles, forced Xbox and Microsoft to think about a fundamentally new model of financial interaction with players. Thus, in 2017, the Xbox Game Pass service appeared, which was supposed to combine the passion of millions of players for service games and the desire to "hook" the Xbox audience into regular payments for access to the game library.
The idea was revolutionary and unconventional enough to survive. Other developers, publishers, and platform owners are now forced to reckon with it. So it was Game Pass that began a new era of subscription video games - and at the same time raised even more ambiguous, provocative questions.
Who are the current market leaders?
When it comes to gaming subscriptions, three giants that have shaped the modern market and are fighting fiercely for our attention and wallets immediately come to mind: Xbox Game Pass, PlayStation Plus, and Nintendo Switch Online. It's no surprise that each of them is tied directly to its own console. Each has a unique story, strategy, and value proposition - all the more interesting to see what forms gaming subscriptions can take through them.
As we have already mentioned, it was Game Pass that became the catalyst that turned the industry upside down. Microsoft, having lost the start of the Xbox One generation, needed a radical step to regain the initiative. And Game Pass became this step, because before that no one could even imagine that the conditional Doom: The Dark Ages would be available to play right at the release for only 230 hryvnias per month. Or even for 39 hryvnias, if you managed to grab a promotional offer. The company's strategy turned out to be simple, but extremely effective: maximum value for the player at any cost, even at the cost of tangible losses and large-scale layoffs.
The main trump card that made even skeptics pay attention to the service was the promise to add all games from Microsoft's in-house studios to the catalog on the day of their release. After the unprecedented acquisitions of ZeniMax Media (parent company of Bethesda) for $7.5 billion and Activision Blizzard for $69 billion, this offer has become so profitable that even skeptics and Game Pass haters can no longer ignore it.
Players no longer had to pay $70, or $70+, because that's what it's all about – for the new Forza Horizon, Halo, Starfield, The Elder Scrolls VI, or even Call of Duty. The latter is especially notable when you consider how aggressively Activision loves monetization and money in general. It's an offer that's hard to refuse.
At the same time, the head of Microsoft Gaming Phil Spencer understands that even such a huge benefit may not be for everyone. Game Pass is aimed primarily at active gamers who constantly want to find something new and be experts in video game trends. Such positioning can be perceived as an echo of the failure of the Xbox One, when Microsoft wanted to sell the console even to those who do not particularly play games. For the latter, a subscription will be superfluous.
"It’s not for everybody. If you play one or two games a year, [Xbox] Game Pass probably isn’t the right business model for you, you should just buy those two games, and that would make total sense," Phil Spencer said about Game Pass in an interview. That is, Microsoft does not plan to force you to completely abandon the classic purchase of video games.
Access to all AAA exclusives from the moment they are released is the main, but not the only argument in favor of the service. In Game Pass you can also find hundreds of games from various developers and publishers, including indie hits, which often get to the service thanks to the ID@Xbox program. For example, the new game from the creator of Katamari, To a T, and Alters got to Game Pass right on the day of release. That is, not only studios owned by Microsoft can release a game immediately on the service - technically there are no restrictions at all. At least from Microsoft's side.
But if we talk specifically about exclusives, because it was with them that the advantages of different consoles were associated a few years ago, then Game Pass is not so good. In contrast to the excellent Indiana Jones and the Great Circle and Senua's Saga: Hellblade II, we can mention the controversial Redfall and Bleeding Edge. However, Xbox is gradually abandoning exclusives altogether, as are almost all other publishers, except Nintendo.
Another big minus for Ukrainians is the lack of Ukrainian regions on Xbox consoles. Therefore, Game Pass for us is mainly PC Game Pass. This service has both pleasant prices in hryvnias, access to EA Play, and tangible advantages in Riot Games games.
Sony watched its competitor's success for a long time before giving its own answer. The company, which confidently won the console wars of the PlayStation 4 generation, did not see the need for radical changes. Their business model, built on the sale of premium single-player exclusives at full price, worked flawlessly. However, it was impossible to ignore the trend, so the changes also affected PS Plus.
In 2022, Sony rebranded PlayStation Plus, merging it with its cloud gaming service PS Now and splitting it into three tiers: Essential, Extra, and Premium. It was a response to Game Pass, but with a key difference: Sony wasn't willing to sacrifice sales of its major hits.
Therefore, you will not find even in the most expensive version of PS Plus Death Stranding 2 right on the day of the game's release. But no one denies that the game may appear there in a year or two. Sony manages the subscription in a more cautious manner. But some interesting indies will be found here and on the day of release, in addition, the PlayStation management selects projects for such a distribution model with all responsibility.
"We've sort of stayed true to our strategy across the board, where we're not looking to put games in day and date. Our strategy of finding four or five independent day-and-date titles—and using that to complement our strategy of bringing games in when they're 12, 18 months old or older—that balance for us is working really well across the platform," said PlayStation VP of Global Services Nick Maguire.
So the current version of PS Plus is still a nice addition to the PlayStation 5 experience, built on exclusives and blockbuster games. Sony responded to the threat from Game Pass by attracting an additional share of players who don't particularly buy games, but it didn't betray its own vision.
And what about Nintendo? This company, as always, is playing its own game. It is not trying to compete with Microsoft and Sony in the field of "who will offer more modern blockbusters". Therefore, its Nintendo Switch Online service is the cheapest and most specific product on the market.
The main value of the subscription isn't access to modern games, but online multiplayer and nostalgia. For an affordable $20 a year, the basic tier gives you access to online modes in Mario Kart 8 Deluxe or Splatoon 3, and for an additional fee, you can also get a substantial library of classics from the NES, SNES, Game Boy, and other retro Nintendo consoles. For many, that's more than enough.
Additionally, Nintendo Switch Online subscribers can participate in the Game Trials program. This is access to full versions of games, but for a limited time. Usually only one game is available, and even then not all the time. Therefore, Nintendo's service cannot be called a direct competitor to Game Pass and PS Plus. No one expected anything else from a company that fundamentally does not make big discounts on its own games.
In addition to these giants, it is worth mentioning subscriptions from major publishers: EA Play and Ubisoft+. They work on a dual model: they exist as independent products for the most loyal fans, and are included in more expensive subscriptions from platform holders, adding value to them. EA Play, for example, is part of Game Pass Ultimate, and Ubisoft+ Classics is included in PlayStation Plus Extra and Premium. This allows publishers to earn money without creating direct competition to the main market players, and at the same time promote their own ecosystems.
What are some lesser-known alternatives?
While console giants and major publishers share the bulk of the subscription gaming market, lesser-known but no less interesting services are thriving in the shadows, offering an alternative take on gaming subscriptions.
Netflix Games. The streaming movie giant decided that games could be a great addition to their core business. Netflix games are included in your regular subscription at no extra charge. These are mostly mobile projects, including small indie gems (Oxenfree, Into the Breach) and games based on popular Netflix series like Stranger Things, and even high-profile ports of Grand Theft Auto: The Trilogy – The Definitive Edition or Civilization VI.
The main advantage is the absence of advertising and microtransactions, which is a rarity in the world of mobile games. Netflix's strategy is to increase the value of the basic subscription and retain users. It can't be said that this is something super popular, but the service has its hundreds of millions of downloads.
Apple Arcade. This is Apple's answer to the dominance of Free-to-Play games with aggressive monetization in the App Store. For a fixed monthly fee, you get access to a curated library of premium mobile games. Almost all of them are exclusive to the service, and do not contain ads or in-game purchases. Apple Arcade is not just a subscription, but an attempt to create a "closed garden" of quality family gaming to strengthen its own hardware ecosystem.
The service focuses on exclusivity and high quality of projects, attracting famous developers, such as Hironobu Sakaguchi and his Fantasian. In Apple Arcade you will find many interesting projects from famous developers, but it is noticeable that Apple clearly wanted more from the service, so the number and quality of original games have fallen significantly since the launch. It turned out to be not the most successful, but interesting attempt by Apple to additionally attract gamers to its ecosystem.
Google Play Pass. A similar service to Apple Arcade for Android, offering access to hundreds of games and apps without ads and microtransactions. Its catalog is less exclusive than Apple's, but much larger in volume. Otherwise, nothing special, just Google's answer to Apple's service. A fairly standard story of the struggle between two large companies that support the leading smartphone operating systems.
Humble Choice. A unique model from the famous Humble Bundle store. Every month for a fixed fee you get a set of several PC games. The main difference from Game Pass and similar services is that you get these games forever in the form of keys for Steam. The set of games is not known in advance, which adds an element of surprise. In addition, part of the money from your subscription goes to charity, which is the basis of the Humble philosophy. This is an ideal option for those who want to replenish their Steam library, and not "rent" games.
Shadow PC. This is probably the most niche and hardcore "subscription". Instead of access to games, you rent a full-fledged powerful gaming PC in the cloud. You can install any games on it from any stores (Steam, EGS, GOG), and also use it for work, 3D modeling or any other tasks. This is maximum freedom, but the price is appropriate - much higher than all other services. From $ 24.99 to $ 49.98 per month - this is no joke, and the user also pays the tax on this amount. Shadow is aimed at enthusiasts who need performance without compromises and owning their own "hardware".
What's the point of cloud game streaming?
The idea of playing demanding games on any device, from an old laptop to a smartphone, has long captivated the minds of engineers and gamers. Cloud gaming, where all the calculations are done on powerful servers and only the image is transmitted to your screen, was supposed to be the same "holy grail" and the perfect gaming solution. And many believed that this technology was ideally combined with the "all-inclusive" subscription model.
Services like NVIDIA’s GeForce Now experimented with offering access to their own game libraries in their early stages. The story of Google Stadia is also instructive. Its failure was largely due to a failed attempt to get players to buy games on the new platform, rather than offering a large subscription catalog.
However, over time, it became clear that maintaining a huge library of modern AAA games for streaming is incredibly expensive. Publisher deals cost millions of dollars. As a result, many cloud services abandoned this idea in favor of the BYOG ("Bring-Your-Own-Game") model.
The most obvious example is GeForce Now. The service stopped trying to be "Netflix for games" and became a "powerful PC rental service." You pay for access to NVIDIA servers with RTX graphics cards to play games you've already bought on Steam, the Epic Games Store, and other stores. This turned out to be a much more sustainable business model.
This shift was also driven by the "exit" of major publishers like Activision Blizzard and Bethesda (before their acquisition by Microsoft), who pulled their games from the service early on, not wanting NVIDIA to monetize their content without proper licensing agreements.
This move away from the idea of a “subscription library” by independent cloud providers is an important and alarming sign. It shows that the all-inclusive model is so expensive that only giants like Microsoft, for whom Game Pass is part of a vast ecosystem strategy, rather than a standalone profitable product, can afford it. Cloud gaming has evolved from a standalone business model to an ancillary technology that enhances the value of core subscriptions (as in the case of Xbox Cloud Gaming) or solves a specific problem for gamers (as in GeForce Now).
Do game subscriptions even bring money to their creators?
This question is central to all discussions. If players pay less, doesn't that mean both developers and platforms earn less? Financial analytics show a complex but interesting picture.
For platform holders like Microsoft and Sony, the move to subscriptions is a strategic step towards stable and predictable revenue. Console sales are cyclical and depend on the release of a new generation of hardware, while monthly payments from millions of subscribers create a steady cash flow. Recent financial reports confirm this.
Microsoft's "content and services" revenue, which includes Game Pass, has been growing steadily, offsetting declining sales of Xbox consoles themselves. In the third quarter of fiscal 2025, content and services revenue grew 8%, while hardware revenue fell 6%.
Sony is following a similar trend. The company has successfully converted a significant portion of its 47 million subscribers to the more expensive Extra and Premium plans (from 30% to 38% year-on-year), significantly increasing the profitability of this segment.
But what do game developers get out of it? It all depends on the terms of the deal. For many indie studios, getting on Game Pass is a real jackpot. Microsoft can pay an amount up front that covers the entire cost of development, allowing the studio to create without financial pressure.
According to documents released during the FTC lawsuit against Microsoft, the company paid $600,000 for Cooking Simulator and $5 million for The Gunk. The developers of Cooking Simulator admitted that this was approximately 22% of their annual revenue in the previous year relative to the game's release. The Guardians of the Galaxy deal was rumored to be worth $5-10 million. For indie games, these amounts can be equivalent to the entire budget.
But for the big publishers, the situation is different. They get royalties, but they also lose out on potential revenue from direct sales at full price. It's a constant balance, and each company finds it in its own way. But the talk of sales cannibalization, especially for games from Xbox's in-house studios, didn't come out of nowhere.
What do developers think about subscription games?
There is no consensus among game developers about subscriptions. It's a real battleground between pragmatism and idealism.
Many, especially from independent studios, see Game Pass-level services as a real salvation. After all, then solo developers and small companies can gain access to the almost inexhaustible resources of corporations of the level of Microsoft and Sony. And even if we leave aside the financial issue, the appearance of an indie game on a Game Pass-level platform, which is used by millions of players, will definitely increase the chances of finding its player. And this is in a world where almost 19,000 games were released on Steam in 2024, of which only 4,000 managed to get at least some money.
Thomas Sala, developer of the BAFTA-nominated indie game The Falconeer, spoke positively about the Game Pass concept: "I'd be on Game Pass the moment they could fit me in, no questions asked. Falconeer did about a million installs on Game Pass."
Microsoft backs this up with numbers: games that join the service get an average of 8.3 times more players, and their subsequent monetization through DLC increases by 2.8 times. The creators of Vampire Survivors felt this effect when their game was added to Game Pass. Add-ons for it began to be purchased much more actively. I admit, I felt it myself when I played Vampire Survivors on PC Game Pass, and then bought DLC for it directly from the Microsoft Store. My first purchase there, by the way.
However, there is much more criticism, and it comes from industry veterans. The main complaints are as follows.
Game Devaluation. When a game becomes just one of hundreds in a catalog, its perceived value drops. Players are less likely to give a chance to complex or unusual projects, simply switching to something else if a game doesn’t grab them within the first 15 minutes.
Loss of direct connection with the player. The direct sales model creates a connection between the studio and its audience. Subscriptions put a platform-middleman between them.
The threat of “gatekeeping.” There are concerns that in the future, a few platforms will decide which games will receive funding and audience access. This could lead to a reduction in diversity and risky, experimental projects.
At the same time, the subscription gaming model – and Game Pass with special powers – is criticized by more experienced developers. Among the skeptics are Larian Studios founder Sven Vinke, It Takes Two and Split Fiction author Josef Fares, and other well-known developers.
Even Take-Two Interactive CEO Strauss Zelnick, who is involved in releases on the level of Grand Theft Auto and Borderlands, has been critical of the idea of subscription games. He worries that the development and growth of services on the level of Game Pass will create conditional gaming censorship, where only Microsoft, Sony and other creators of such services decide which games get attention and resources and which do not.
Zelnik also sees a problem in the fundamentals of gaming subscription services: "The interactive entertainment business is very different than the linear entertainment business. People consume far fewer hours of interactive entertainment in a given month than they do of linear entertainment. And within that consumption, there are far fewer titles consumed in interactive entertainment than there are with linear entertainment. So I, at least, pose the question as to whether subscription makes as much sense for interactive entertainment as it does for linear entertainment and registered some skepticism, which I still hold."
Thus, for developers, subscription is always a trade-off between short-term financial gain and potential long-term risks to creativity and the industry as a whole.
And even in the quotes from developers, you can see a potential contradiction. Indie developers are more positive about subscriptions, while developers who are already known to players see a threat. That is, theoretically, game subscription services could focus specifically on indie. However, Game Pass is promoted as a service for AAA games on the day of release, and many players go to the service for this very reason.
So even at the positioning level, game subscription services still have a long way to go.
So what happens next?
The future is likely to be hybrid. A complete abandonment of the traditional game-buying model in favor of subscriptions seems unlikely. It is also unlikely that subscriptions will disappear. They are too deeply integrated into the strategies of the industry giants.
From a gamer's perspective, the situation is mixed. On the one hand, subscriptions are a fantastic way to save money, especially with the recent price hike of AAA games to $70-80. For the price of one new game, you can play for a whole year. This opens up access to a huge number of games that you would never have tried otherwise.
On the other hand, there is the illusion of abundance and the problem of choice. When you have hundreds of games in front of you, the value of each individual game seems to be diluted. Moreover, you do not own these games. If the game is removed from the catalog or you cancel your subscription, access will disappear.
However, it's worth noting that "ownership" in the digital age is a very arbitrary concept. If you read the license agreement on Steam or the PlayStation Store, you'll see that when you buy a game, even at full price, you're not getting the product, but rather a perpetual license to use it.
The platform can revoke it at any time, as happened with Ubisoft's The Crew, which had its servers taken down, rendering the game completely unplayable even for those who had purchased it. This blurs the fundamental distinction between "buying" and "renting," making subscriptions a less radical idea than they might seem at first glance.
Can subscriptions completely replace purchases? Not likely. There will always be players who want to own their collection. There will always be huge, long-awaited releases like Grand Theft Auto VI that people will want to buy, not just "rent."
Most likely, we will see a further evolution of subscriptions with the following characteristics:
Price increases. This is inevitable. Services cannot operate at a loss or at a very conditional profit forever. By the way, in one of the interviews, the former director of publishing strategy at Epic Games, Sergii Galyonkin, spoke about the increase in the price of subscriptions.
"The fact that it costs a little is temporary, as you understand. Netflix was $5 a month, now it's $23 or $24 a month, and it will keep getting more and more expensive. The same will happen with Game Pass when they start making money on it. Now it's $9 a month, and it will keep getting more expensive. Everyone understands that at $9 a month they don't make anything from it," said Sergii Galyonkin.
Different tiers and models. There may be cheaper plans with ads or more expensive plans that include additional benefits like access to movies or music.
Hybrid approaches: Publishers can offer a game as a subscription for a limited time and then sell it at a discount to those who have played it.
The revolution has already happened. Games as a product are becoming a service. For us, the players, this means more choice, but also more responsibility. But with the current changes, it is likely that soon even our money and time spent playing games will not decide which game will be successful.