App Annie: Subscriptions model will bleed into mobile gaming

Netflix-style subscriptions could become the future of monetisation in the realm of mobile games, with business intelligence firm App Annie predicting that the model could become popular with those who play on their smart devices regularly.

GamesIndustry.biz caught up with the firm's chief marketing officer Al Campa after a briefing on changing trends in the mobile market in London last week, where he identified monthly subscriptions as one of the highest growth areas thanks to the success of apps such as Netflix and Spotify.

"Even health, fitness and lifestyle apps are becoming more subscription-based because it's a one-time decision," he explains. "You just sign up for five or ten dollars a month, and then renew, as opposed to the point-of-sale where it's a decision every time. Many non-gaming apps are heading towards this model.

"I think you'll start to see subscriptions making their way into gaming. Rather than buying a new version, paying $5 to download it, if you had a subscription for $15 per month, you'd have access to a collection of games. It would be similar to the Netflix model, and I think we'll start to see that model break into the gaming category as well."

He went on to compare video games, even mobile ones, to movies in that they have a limited shelf life of visibility and exposure. Just as a hugely popular movie will be old news often before it has even finished being screened in the cinemas, so too does the games industry constantly focus on the new rather than the recent.

"The gaming world needs to continue coming up with new hits all the time," says Campa. "That's why I think the subscription model is good. You don't subscribe to Netflix or HBO to watch one movie, you do so because you want to watch a whole bunch of movies. If you like a game publisher, like Nintendo, you'll want to play all their games - both the new ones they've got coming out, but even some of the old ones.

"When publishers are selling one game at a time, they have to actively market every one of those releases. A lot of big mobile games have multi-million dollar marketing campaigns behind them to get people to adopt that particular game. If you have a subscription model, your audience will get it anyway. I think the games industry can learn a few things from the media guys who are all subscription-based.

"The subscription-based is because people realised they were spending so much on iTunes at 99 cents per song, they realised they can just pay $12 to Spotify and listen to whatever they want, or use Pandora for free and spend $5 per month if they want a different experience. That's one thing I think the games industry can learn from. It might attract a new type of customer."

Of course, the subscription model has long since found its way into the traditional video games industry, with Xbox Live Gold and PlayStation Plus charging console owners a monthly fee for multiplayer access and exclusive content. In recent years, this has extended to a selection of free games per month. Meanwhile, publisher experiments such as EA Access have given subscribers an expanding collection of titles for a monthly fee.

However, the model has yet to take hold in the mobile space, which is surprising given how prolific many publishers in that market can be. Leaders such as Gameloft regularly release new versions and sequels to its popular premium mobile titles, while even free-to-play firms seek new ways to cross-promote all the games in their portfolio.

Campa goes one further by suggesting a subscription model could be an effective way to get players into virtual reality on mobile. Having already invested in the higher-end mobile VR hardware, consumers are unlikely to be able to justify purchasing ever virtual reality title that appeals to them, but a package deal could give them more choice.

"Subscription fees could open up a whole range of experiences, because they're not going to know what they want," said Campa. "They're not just going to want to buy an airplane ride, or an experience of landing on the moon, they're going to want all kinds of stuff. So if they can just pay the subscription, buy the whole package, maybe there's different tiers within that. I think where it's wide open like that, and you don't know where the experience is going to go but you have to put down some cash early on, I think that makes a lot of sense."