Understanding the consumption behavior of gamers versus other media consumers reveals why some of the new subscription services, like Google Stadia, are releasing with just a few games while other games have to be purchased. With a very skewed distribution of media consumption in gaming where most of a gamer’s time is dedicated to 5–10 games per year, the value of a vast library of games, like a Netflix subscription, has less value. Stadia is betting that they’re solving a problem just by making the games available without requiring specialized gaming hardware, which could lead to increased time spent playing games that wouldn’t necessarily be possible on your phone or TV. In fact, this hypothesis may prove to be true based on a recent Morgan Stanley study, which found that 10% of Americans who do not play games would play console/PC games if they didn’t have to buy hardware. On the other hand, consumers do benefit a lot from the vast libraries of content that Netflix and Spotify offer because they consume a lot more distinct movies/TV and music each year than they do games. The library model for movies/TV and music matches the consumption behaviors of those respective types of media. This is partially due to how we consume the media in each category. For instance, most music and television is consumed passively, making it possible to watch and listen to several hours of video and music per day. As Matthew Ball notes in a recent article, “consumers don’t want The Crown or Mad Men or Game of Thrones most of the time. To point, close to two-thirds of all prime-time TV viewership is unscripted content like Duck Dynasty and The Masked Singer.” That’s why Netflix invests in a lot of television shows that have no chance of winning an Emmy while also creating almost as many Emmy-award winning shows as HBO. Contrast this passive experience with gaming. Games, especially on your TV and computer are always actively consumed. They’re immersive, and you have to pay attention to the action to avoid dying or losing a life. In the premium games category especially, gamers are escaping into the worlds of the games, and are spending 100s of hours immersed in Red Dead Redemption 2, Grand Theft Auto V, FIFA, Madden, or Civilization. The vast majority of gamers, however, cannot actively play all of these games because they don’t have enough time to do so. Building a vast library of games that is available through a subscription service might increase gaming consumption a bit, but it’s not going to change the fact that most gamers aren’t playing more than a few games in a year. The endless library model is less valuable to the majority of gamers than it is to the majority of Netflix and Spotify users and it’s not good for the premium games publishers who count on just a couple of hits driving most of their console and PC revenue each year.
How many hours are spending with media?
The average American watched 5 hours and 57 minutes of television in 2018. That’s 2,172 hours of TV in a year. They also listened to 3 hours of music every day for a total of 1,102 hours per year. Meanwhile, the average gamer in the US (approximately 65% of Americans), plays slightly more than 7 hours of games each week or 370 hours per year. These 7 hours include gaming on all devices with mobile being the most popular. Since the other stats mentioned are an average of all Americans, we’ll adjust the average hours gaming per year to account for the 35% of Americans who don’t game at all. Based on this, the average American plays games for 241 hours across her mobile phone, computer, and video game console.
How Many Games Are Out There?
As of 2018, Steam had nearly 30,000 games with 9,050 new games added in 2018. In terms of total releases of premium games, however, the major publishers only released 28 games last year. Although that doesn’t account for all of the premium games released in 2018, it probably covers a vast majority of the industry’s premium games revenue. In a recent financial statement, Activision noted that the top 10 games dominated the market with 38% of all gaming retail sales in the US coming from those 10 games alone in 2018. And on average, each gamer is only buying one of these $59.99 games per year (350 million gamers who buy premium video games spent 17.9 billion on premium games for an average spend of $51). These numbers do not take into account the expanding number of free-to-play games on the console and PC (most notably, Fortnite) or the growing number of games on mobile phones. That being said, the monetization and consumption patterns of these games is very different and not reflected in the premium games category or as important to a study of premium game subscription products.
How Does A Gamer Consume Games Versus Music and Movies/TV?
If you were to assume that the average song is 3 minutes, the average movie is 2 hours, and the average TV show is 30 minutes (some are about 45 minutes while most are about 20 minutes), you can take a stab at the amount of distinct pieces of media each consumer listens to and watches. Based on this, the average American listens to about 22,000 songs in a year — it might be 22,000 plays of the same song or 22,000 unique ones. Meanwhile, let’s say people spend 10% of their time watching movies and 90% of their time watching episodic television shows. That means, each American is watching 217 movies that are two hours long and 3,900 episodes of television that average 30 minutes in length each year. When you’re watching that many distinct pieces of media, a limitless library is extremely valuable to you as a consumer. On the other hand, the average person who plays games is playing for 370 hours during the year. If they are the median GTA V gamer, 20% of their year was spent playing just that game. If they’re the median Civilization VI player, they’re spending 5% of their gaming time playing that game while a median Far Cry 5 player spends about 7% of their time playing just Far Cry 5. These are some of the biggest games in the world, and they show that each game has the ability to capture a very significant portion of your gaming time in a given year. When you spend a majority of your time playing just a few games, the games have to monetize that time and your engagement at a very high rate because they know their audience is limited, so offering their game in a bundled subscription doesn’t make as much sense to the developer or publisher. In this case, the consumer also won’t value a library of content as highly as a Netflix or Spotify consumer does.
Who Would Buy A Premium Subscription?
There is one group of gamers who are a good target for a premium game subscription. The heaviest one percent of game purchasers do buy a lot of games. According to SteamSpy, one percent of Steam users owned more than 107 games at the time the article was written. This group is made up of 1.3 million Steam users. These people spend a lot of money on games, but they’re an unlikely target for the streaming model. These gamers have their own hardware, and they will continue to have it. They might subscribe to a downloadable content all-you-can-eat model, similar to what Microsoft offers with Game Pass, but they will continue to own their own hardware for several more hardware cycles.
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