Subscription Commerce

How Subscription Services Are Changing The Video Game Industry

In the cutthroat world of subscription commerce, the best performers know that every additional second that it takes a consumer to convert to a paying customer, increases the odds that they won’t. The latest Subscription Commerce Conversion Index examines 300 data points across 178 sites and shows that the best of the best have shaved a full seven seconds off that time by focusing on what features matter most. That means de-prioritizing those that don’t. We have both lists, and the data to back it up.

 

Video games have grown into a massive real-world business, bringing in $36 billion in revenue in the U.S. per year. In fact, the industry saw some 7,600 games released in 2017 alone — roughly 21 games per day.

Those games may mean plenty of revenue for the industry, but staying on top of all the latest titles as they hit the shelves is an all but impossible task for even the most dedicated of gamers. Subscription commerce could be the answer to that problem, and game services like Jump, Gamefly and Utomik — which resemble movie and television streaming platforms like Netflix or music streaming subscriptions like Spotify — are all betting on that.

Without these streaming services, users could waste hours researching games to ensure they get the best bang for their buck. Utomik, and others like it, allow users to leave the curation to the subscription platform, freeing them up to sample as many games as they wish rather than wasting time evaluating purchase decisions.

According to Doki Tops, Utomik’s CEO and founder, video game subscription services solve issues not only for gamers, but also for providers. He discussed his company’s offerings and the state of subscription commerce at large in a recent interview with PYMNTS.

Saving Gamers Time and Money

Originally known as Kalydo, Utomik was initially designed as a service allowing gamers to play massive multiplayer online games (MMOs) in an easier fashion. It built its platform to allow users to play individual games in segments via their web browsers, Tops explained, but decided to upgrade its business model following a shift in user expectations and demand. Utomik’s platform now offers gamers access to a library of hundreds of full-length games.

“We settled on building something that existed for music and films, but didn’t exist for games, and that was a Netflix for games, an ‘all-you-can-eat’ gaming subscription service,” he said. “We eventually figured out that our technology was well-suited to that.”

The service was designed to solve several pain points for video game fans. First, it aims to save them time by allowing them to stream full games via the company’s platform rather than spending hours downloading only to find a new game wasn’t as good as advertised or doesn’t capture their attention.

“If you have Netflix, for example, you don’t want to wait 10 or 15 minutes to download a new episode of a show you like, then watch the show and have to spend another 10 or 15 minutes downloading the next episode,” he explained. “For us, it’s basically the same idea. It solves a big pain point for someone with little time, say if you’re a professional or someone with a job and kids.”

But time isn’t the only attribute of value for customers. Gamers want to be able to play without burning a hole in their pockets, too, Tops said. To that end, Utomik’s subscription service enables them to sample a wide variety of genres for one monthly fee, rather than paying $60 or $70 for an individual game.

Solving Subscription Commerce Challenges

Video game subscriptions also seem to avoid some of the problems plaguing Netflix and other major subscription players. For example, the nature of video games discourages password sharing, Tops noted, one of the major issues in television and movie streaming.

Unlike television shows, music and movies, games are primarily designed to be played by one player who moves through the storyline and charts progress and achievements along the way. This means users are less likely to share a subscription, because unlike rewatching a favorite show or revisiting a classic album, players can’t simply rewind to a previous point without losing their progress.

“It’s an interactive medium,” Tops said. “As soon as you start reaching achievements or saving games, if people mess with those things, that is really annoying to gamers, so password sharing isn’t as big of an issue for us.”

If that isn’t enough to dissuade password sharing, the team at Utomik has also worked to safeguard against the potential issue. The company created a protocol that is on the lookout for the practice, ensuring that players who are sharing won’t keep playing for too long.

“Our security is also designed in such a way that if I go online and log onto someone else’s account while they’re playing, it would kick you out,” Tops explained.

That competitive nature also holds another advantage for Utomik, because it keeps players more invested in the games. Users begin making progress and achieving some level of success from the moment they start playing. This means they are more likely to continue using the company’s services going forward, lest their progress and achievements be lost along with their subscription.

“It’s a very different medium, [because] games are very interactive and they’re competitive,” Tops said. “Gamers are very vocal and passionate about what they do, so it’s a different audience that you have in this industry because it’s a bit of a more personal space.”

That passionate audience continues to push gaming forward and attract new players, setting the already massive industry up to grow even larger in the future. Companies will need to find ways to set themselves apart from a growing group of competitors — perhaps embracing subscription commerce to stay on top of their game.

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About the Index

The Subscription Commerce Conversion Index™, a Recurly collaboration, measures frictions that exist in the digital shopping experience for subscription services and products, and how they affect the final conversion rates for a merchant. This Index analyzes why certain websites are better at converting sales than others by examining several pre-payment factors that generate either friction or sales.

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