Gaming spotlight
upkeep in terms of relevant, curated content creation, which naturally increases the need for talent and manpower. Tis is something we are particularly invested in at Jagex; GaaS’s started with Massively Multiplayer Online games - games that offered a subscription model in exchange for a constant release of new, relevant content to keep the player engaged in the long term. Tis model has evolved over the years to include games offering
free-to-play options that include microtransactions and, more recently, “Netflix’’ like services offering a selection of games for a monthly fee - such as Microsoſt’s Xbox Game Pass. When it comes to the big player acquisitions, it is easy to see the rationale behind them in relation to this new paradigm. Microsoſt’s Xbox Game Pass is already a phenomenal success with millions of subscribers worldwide, and bringing Bethesda, Blizzard and Activision titles to the service will only mean more customers and higher retention. It will also mean that those games will likely not appear on Sony’s newly revamped PlayStation Plus service, highlighting the enduring value of exclusivity. Tese ecosystems have only been made possible thanks to significant
steps forward in hardware and infrastructure necessary for modern, multiplayer centric gaming. Te proliferation of high-speed Internet, an increased focus on backwards compatibility, and game longevity have made more games accessible through these services than ever before. Te subscription service model translates to value in bigger back catalogs that can be exclusively controlled and leveraged. However, a lot of the bigger titles being worked on by the recently acquired publishers look to be bucking this trend towards exclusivity, with various commitments from Microsoſt and Sony that games from some publishers would continue to be available on rival platforms. So in the short term the recent surge of acquisitions could be
attributed to the main players of the industry securing content and talent for their growing GaaS services, making sure they have the best games while obfuscating a direct path to revenue for their rivals. On the broader stage, these acquisitions could also be seen as the gaming giants “circling the wagons” against outside forces looking to move in on the space. Aſter all, Activision was only sold to Microsoſt aſter an unsuccessful attempt to sell itself to Facebook’s parent company, Meta - the result of which would have given the company a significant stake in the gaming market. Additionally, on the longer
timescale, the influx of cross platform compatibility may be pointing to a more significant shiſt in the games industry’s modus operandi. Especially when paired with recent comments from Sony Interactive Entertainment president and CEO Jim Ryan. In late 2021 he described how he wanted the PlayStation to reach hundreds of millions of users around the world - something he said was not feasible with the current console model where players need to spend £400-£500 to buy into the ecosystem. Tis is remarkably similar to comments made by Microsoſt’s Phil Spencer in the last few years, particularly in regards to
www.pcr-online.biz June 2022 | 35
cloud gaming and a mostly first world, city-centric high-speed Internet infrastructure. While the cloud gaming space is currently best known for not quite
living up to its potential (Google Stadia stands out as a warning), the main issues holding it back are a combination of infrastructure and entrenched consumer habits, issues which most big movers in the gaming space believe will resolve themselves naturally over time as availability and convenience increase while cord-cutting mobile networks add a feasibility of high-speed connectivity at increasingly lower price points. Having a library of exclusive games that consumers can play anywhere for a flat fee is what many consider the end goal for both Microsoſt and Sony. Not only would this mean they can de- prioritise loss leading physical consoles, but they could also expand the reach of their influence, games, and brands to hundreds of millions of new global users.
“Ultimately the driving force behind these acquisitions is expansion and security”
Ultimately the driving force behind these acquisitions is expansion
and security - specifically being able to offer more content to more long-term customers, generate more brand loyalty and ultimately bring in more money via a controlled and curated ecosystem. While the approach, methods and resources differ, the ultimate goal remains the same. Te shiſt away from the traditional release model and towards GaaS leaves a lot more room to maneuver for the established gaming mainstays, and acquisitions are just one tool they are using to secure their space in the future of gaming and entertainment. As a result, the recent run of consolidation is likely to continue, both at the high end and increasingly around the mid-market, publicly listed game developers and publishers who continue to see their stock price cool from their pandemic related peaks, eager to capitalise in the short-to- medium term.
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