Google Sees Payments Potential In Subscription Gaming

Among the biggest games in eCommerce is, well, games, and that includes subscription streaming services along with the payments that go along with them. And Google wants a bigger piece — making a move that seems similar to a recent announcement from Apple.

The search and online advertising provider reportedly is about to launch streaming games and gaming hardware, according to 9to5Google.com. It said Google will make such that announcement at the Game Developers Conference in San Francisco on March 19 during what that outlet described as a “a mysterious gaming-related press conference.”

When it comes to streaming, the report said that “Google is leveraging its large cloud infrastructure to compete against the likes of Nvidia and soon Microsoft.” The goal is to stream “intensive, interactive content with minimal lag.” Google reportedly ran a game streaming project that ended earlier this year, “a four-month test trial of ‘Assassin’s Creed Odyssey,’” the outlet said.

Google also is reportedly set to make an announcement at the conference about gaming hardware. According to CNBC, Google apparently wants to “let users stream console-quality games on cheaper hardware, with the ultimate goal of offering a ‘Netflix for games’ subscription service.”

Gaming Growth

The market is certainly attractive.

According to the Global Games Market Report from Newzoo, “2.3 billion gamers across the globe (spent) $137.9 billion on games in 2018,” a growth in spending of some 13 percent compared to 2017. “Digital game revenues will take 91 percent of the global market with $125.3 billion.”

Beyond that, mobile gaming stands as the largest gaming segment — its growth sent into overdrive after the launch of the iPhone in 2007. Mobile game revenue reached an estimated $70.3 billion in 2018, up nearly 26 percent year over year. Smartphones will account for 80 percent of this, or $56.4 billion, with the remaining 20 percent coming from tablets, the report said. “Console gaming is the second-largest segment generating $34.6 billion in 2018, while PC games will bring in $32.9 billion.”

Google is not the only large global tech firm that wants to do more with games and capture more of that market. As PYMNTS covered about a month ago, Apple could be starting a subscription service for gaming The service would operate like a streaming service, where users pay a fee to get access to many different titles. Apple began discussions with game developers in the latter half of 2018, according to the people familiar with the plans, who all declined to be identified.

Apple Move?

The possible service remains mysterious to analysts because most of the games in the App Store are free. However, some are saying that Apple could put its focus on paid games and add those to a subscription, or add perks like coins to free games. “The vast majority of revenue coming out of the App Store is games,” said Brandon Ross, an analyst at BTIG covering the video game industry. “Subscription has proven to be a successful way of monetizing on mobile. It is completely unproven in games except for some minor success from Microsoft, Sony and Electronic Arts.”

The possible move from Apple comes as the company relies more on revenue from its services, especially as iPhone sales slow. Apple Services are the fastest growing segment of its business, accounting for $39.75 billion in revenue for the 2018 fiscal year. CEO Tim Cook said he wanted to raise the company’s Services business to $50 billion by 2020.

That’s hardly all when it comes to the power of gaming.

Online games and eSports are becoming an important segment for payment providers, and that includes PayPal. As well, a recent study conducted by SuperData on behalf of PayPal found that survey respondents made purchases from a wide range of vendors over the last three months. In the U.S., for example, gamers purchased from 26 different gaming storefronts. In Russia, shoppers purchased from 27 storefronts, while gamers in both Australia and Canada shopped at 28 storefronts.

Were Google to make a big splash into gaming — both via streaming and hardware — it could bring more change to this digital industry.