Subscription services are not the future of video games according to a major analyst

The video game industry continues to evolve, marked by the growing adoption of subscription services by companies like Xbox and PlayStation. These services have been well received by many players, offering catalogs that include exclusive titles, third-party games, and classics. However, some analysts, including Mat Piscatella from Circana, have expressed skepticism about whether these subscriptions are the definitive direction for the industry.

Subscription services are growing, but not at a pace that makes them dominant

According to Piscatella, spending on video game subscriptions in the United States has remained relatively stable after an initial growth in 2020-2021. However, a 12% increase was reported in the fourth quarter of 2024, primarily attributed to the inclusion of Call of Duty in Game Pass. This suggests that while subscriptions have gained popularity, they are not the only path toward the future of digital entertainment. Piscatella concludes that although these options will likely continue to be part of the market, they will not exclusively dominate the landscape of video games.

In the realm of PlayStation, the company has made the controversial decision to increase the annual price of PS Plus in several countries, including Latin America and Australia, which has generated discontent among its user base. On the other hand, in Xbox, Phil Spencer has made it clear that Game Pass is not necessarily the right model for all players, emphasizing that the subscription should be seen as an option rather than an obligation.

The subscription strategies of these industry giants reflect a constant search for new business models, but the future will continue to depend on these companies’ ability to adapt to players’ expectations. Decisions regarding pricing and the content offered will be key to maintaining consumer satisfaction in a competitive market.

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