Roblox is launching new in-game subscriptions in an effort to drive higher-margin purchases as, across the gaming industry, major players look for new ways to bring in recurring revenue.
A staff member from the online gaming company announced to the platform’s developer forum on Wednesday (Nov. 15) that creators can now offer subscriptions for purchase within the experiences (i.e., digital spaces) they have made.
“Subscriptions offer a new potential way to earn from your experience through subscription-based offerings and business models,” the staff member, writing under the username rockythecorgi68, posted to the forum. “They also can help you build recurring relationships with your audience, strengthening engagement while benefiting your users.”
The move to make these subscriptions available for purchase comes months after the gaming platform announced to the forum in September that creators could begin building their subscription offerings. It arrives as part of the company’s overall push to drive higher-margin purchases.
“Developer subscriptions on the platform over time with some of our partners may have different [cost of goods sold (COGS)] than other type of Roblox purchases, which bodes well for COGS,” David Baszucki, Roblox’s co-founder and CEO, told analysts on a call earlier this month discussing the company’s third-quarter 2023 financial results.
Overall, gaming companies are increasingly competing for consumers’ subscription spending. Microsoft, for instance, reported last month on its first-quarter fiscal 2024 earnings call that it saw Game Pass subscriber growth contribute to a 13% year-over-year increase in Xbox content and services, even as Xbox hardware revenue fell by 7%. PlayStation had 47 million subscribers for its PlayStation Plus program as of Q4 fiscal 2022, and Nintendo Switch Online reportedly had 36 million paid subscribers as of September last year.
Additionally, companies that have not traditionally operated in the space are now making moves to capture consumers’ gaming subscription spending. Netflix shared last month that it is leveraging subscriber affinity for its films and series to create an audience for its emerging gaming business — an effort to avoid the typical challenges associated with gaming subscriber acquisition.
“We believe that we can build games into a strong content category, leveraging our current core film and series by connecting members … with games that they will love,” Netflix Co-CEO Greg Peters said. “As we make those connections, … we’re essentially sidestepping the biggest issue that the mobile games market has today, which is how do you cost effectively acquire new players.”
Additionally, Meta launched a new subscription service on games in June for its virtual reality (VR) headsets, Meta Quest+, and Google has reportedly been testing an online gaming product for YouTube.
Overall, the audience for these kinds of subscription programs is significant. PYMNTS Intelligence’s study last year, “Benchmarking The World’s Digital Transformation,” which drew from surveys of more than 15,000 consumers across 11 countries, found that 61% are highly digitally engaged when it comes to activities related to having fun. Another 16% are moderately digitally engaged.
Plus, PYMNTS Intelligence’s study this year, “How the World Does Digital: Daily Digital Engagement Hits New Heights,” found that this engagement is correlated with consumers’ online shopping behaviors. Specifically, a 10% increase in digital engagement in shop activities corresponds with a 5% increase in digital engagement in having fun.