Devolver believes in "selling games first" over subscription launches & Hildebrand on Gamepass negative effects causing closures at Bethesda & more.

[Gamernyc78]

Devolver believes in "selling games first" over day one launches in Game Pass-esque subscriptions, says co-founder

Nigel Lowrie, co-founder of indie game publisher Devolver, believes in "selling games first" over launching in subscrip…

www.eurogamer.net

Devolver co-founder says large-scale game dev "crushing under its own weight a little bit"

It's been a difficult stretch for the industry, so when we speak with Devolver Digital co-founder Nigel Lowrie at the G…

www.gamesindustry.biz

Nigel Lowrie, co-founder of indie game publisher Devolver, believes in "selling games first" over launching in subscription services like Game Pass and PS Plus.

In an interview with GamesIndustry.biz, Lowrie provided his stance on the current state of the industry, describing large-scale game development as "crushing under its own weight a little bit".

Further, he noted the growth of subscription services has tapered off and deals for indie developers to be included are getting worse.

"A lot of it seems a little obtuse on how many people are actually [using them]," Lowrie said. "Every once in a while you hear how many subscribers these services have, so you don't really know. And you don't know how active they are. Are they part of a larger service? Some of these companies have multiple things outside of games and their subscription service also encompasses music or movies and things like that."

Subscription services may provide a great deal for consumers, but it's then harder for developers to "convince people to put down money for your game rather than this service with 100 or 200 games to play."

Instead, Devolver's strategy is initially to sell games and then add them to subscription services later.

"We still really strongly believe in selling games first, because over the past 15 years, we know there's an audience to buy these games," Lowrie said. "And we're looking at subscription more for the longer tail, the people on the edge of things who were never really going to jump in at $40 or $30 or $20. But they're willing to try it, maybe buy something cosmetic or something like that? We're looking at it more as a long tail thing now, and my hope is that's where the industry is going."

That said, Lowrie said the company isn't "ruling out day one subscription service" but it depends on the kind of game and the audience, citing Fall Guys as an example of a successful day one subscription service launch (on PS Plus).

Lowrie also acknowledged Nintendo as a better place for indie developers than Xbox or PlayStation, due to player expectations of those consoles pushing boundaries.

"They've created an ecosystem - and therefore a user base - that is really open to interesting concepts and gameplay ideas," Lowrie said of Nintendo. "The PlayStation and Xbox user, for as long as I've been doing this... there's a lot of people that still like indie games, don't get me wrong. Cult of the Lamb has done very well on those platforms. But I think the large majority of those people buy those platforms to show off what they can really do. They're looking at Destiny. They're looking at Helldivers. They're looking at Starfield. They definitely push those.

"I think the platforms themselves all are really strong believers in indie games. They really do push them. I think on the other end, the consumers - as big as they might be - there's still a smaller portion than we would like on Xbox and PlayStation that are open to looking at a pixel art platformer and going, 'I'll give this a shot.'"

Devolver has become well-known for publishing high quality indie games - the last couple of years has included the likes of Cult of the Lamb, Weird West, Terra Nil, The Talos Principle 2, and more.

Also...

Brad Hilderbrand on LinkedIn: There are two reasons why all those Bethesda studios closed, and neither…

There are two reasons why all those Bethesda studios closed, and neither of them have anything to do with Bethesda (directly)... Game Pass and…

www.linkedin.com

There are two reasons why all those Bethesda studios closed, and neither of them have anything to do with Bethesda (directly)...

Game Pass and Activision.

The biggest paradox with Game Pass is that basically every game that launches on the service badly misses its sales goals. Makes sense though, why pay full price to buy a game when you can play it for "free" as part of your subscription? This is accounted for somewhat by attributing portions of revenue to top-performing Game Pass games every month, but there are factors working against games. Namely, the fact that most games don't stay at the top of the chart for more than a month or two, and also that Game Pass growth has stagnated. So games like Hi-Fi Rush, which is incredible mind you, gets a very small bump in revenue from being the hot Game Pass game for a month, then it falls off a cliff when everyone moves onto the next thing. Poor Redfall had it even worse since it launched so rough, it never had a chance.

This system was fine for a while when Game Pass was growing like gangbusters, but now it's slowed way down and the amount of revenue it's attributing to games isn't keeping up with the budgets to make them.

But, all that wouldn't have mattered even 3 or 4 years ago because back then Xbox was basically a rounding error on Microsoft's books. The division made some money, but more importantly, it didn't cost that much and other parts of the business easily covered the gap. Then Xbox went on a buying spree and spent a lot of money on Bethesda, but orders of magnitude more on Activision. Now, the Eye of Sauron has turned, and Xbox is expected to start making that $70B back, or at least cut expenses to the bone (and then some) while they try.

That brings us back to Game Pass. So far, the big bets on driving new subscriptions (Redfall, Starfield) haven't spurred near enough growth, and there's not much on the horizon that is likely to restart the momentum. The best bet is COD, but do you really risk the guaranteed sales revenue that franchise brings by putting it on Game Pass on Day 1 and potentially lose massive sales? I don't know what the plans are, but either you put it on Game Pass and lose money, or you don't and the subscribers revolt because they think that's what they signed up for.

COD will be fine though, as will the other mega-studios with huge IPs, but you're seeing the impact; all those smaller studios making really interesting games are going to fall away, simply because as good as games like Hi-Fi Rush are, they're never going to make enough money to make up that $70B hole that Xbox now has to dig itself out of.

 

[ethomaz]

Let's give the truth.

Subscriptions are for old games... for people that wait years to buy games at less than $10 in fire sales... so for these Subscriptions works.
It will never work for day one releases.

Because day one releases are used to pay the game costs.
You try to recover the most of it in the launch windows because people that can't wait will pay full price for it.

After a year of so you can use the Subscription to show to others gamers the game and at the same time make a bit more of money but in a way slow pace... you will trade at that time the "fire sales" for "subscription revenue".

That is what Subscriptions model is suppose to be used.

But MS twist everything they touch lol
Maybe because they had the money to throw on trash doing it.

 

[Gamernyc78]

Let's give the truth.

Subscriptions are for old games... for people that wait years to buy games at less than $10 in fire sales... so for these Subscriptions works.
It will never work for day one releases.

Because day one releases are used to pay the game costs.
You try to recover the most of it in the launch windows because people that can't wait will pay full price for it.

After a year of so you can use the Subscription to show to others gamers the game and at the same time make a bit more of money but in a way slow pace... you will trade at that time the "fire sales" for "subscription revenue".

That is what Subscriptions model is suppose to be used.

But MS twist everything they touch lol
Maybe because they had the money to throw on trash doing it.

Yeah tht day one release bs was a killer in disguise they didn't forsee tht like we all did. Cannabalizing sales, restricting budgets and leading to developers downfall and destruction.

 

[Sloane_Ranger]

While I agree they are right on the whole - I am a predominantly console gamer and I love Indy games often times more than the AAA that comes out. I have to wait forever for the ones I am interested in like Holstin, V Rising, etc to come to console - and I don’t think I am alone. And I often don’t want them through a sub, I buy them outright, or even better buy them physical day 1.

Shu knows the thirst is real - that is why he is there.

 

[J_Paganel]

Let's give the truth.

Subscriptions are for old games... for people that wait years to buy games at less than $10 in fire sales... so for these Subscriptions works.
It will never work for day one releases.

Because day one releases are used to pay the game costs.
You try to recover the most of it in the launch windows because people that can't wait will pay full price for it.

After a year of so you can use the Subscription to show to others gamers the game and at the same time make a bit more of money but in a way slow pace... you will trade at that time the "fire sales" for "subscription revenue".

That is what Subscriptions model is suppose to be used.

But MS twist everything they touch lol
Maybe because they had the money to throw on trash doing it.

Unfortunately, subscriptions (if we take the example of GP), even when a lot of money was invested in it for the sake of promotion, did not actively add old games that could interest users.

Sleeping Dogs, Watch Dogs, Assasins Creed, MassEffectLE (ME was a real find, because at the time of its release my PC could not run it, and then when I tried to start the trilogy on a new PC, the game killed all the save files halfway through ME1) and a number of other releases, it was more profitable to buy on sales, which is what I personally did when I bought an Xbox SX (I missed these games on the PC because they had technical problems, and I was able to play them properly only in 2021).

At the same time, I had a GamePass Ultimate, but only some of the above releases were included much later and did not have DLC (which is more expensive to buy separately than buying the entire bundle).

 

[Gamernyc78]

Unfortunately, subscriptions (if we take the example of GP), even when a lot of money was invested in it for the sake of promotion, did not actively add old games that could interest users.

Sleeping Dogs, Watch Dogs, Assasins Creed, MassEffectLE (ME was a real find, because at the time of its release my PC could not run it, and then when I tried to start the trilogy on a new PC, the game killed all the save files halfway through ME1) and a number of other releases, it was more profitable to buy on sales, which is what I personally did when I bought an Xbox SX (I missed these games on the PC because they had technical problems, and I was able to play them properly only in 2021).

At the same time, I had a GamePass Ultimate, but only some of the above releases were included much later and did not have DLC (which is more expensive to buy separately than buying the entire bundle).

 

[ethomaz]

Unfortunately, subscriptions (if we take the example of GP), even when a lot of money was invested in it for the sake of promotion, did not actively add old games that could interest users.

Sleeping Dogs, Watch Dogs, Assasins Creed, MassEffectLE (ME was a real find, because at the time of its release my PC could not run it, and then when I tried to start the trilogy on a new PC, the game killed all the save files halfway through ME1) and a number of other releases, it was more profitable to buy on sales, which is what I personally did when I bought an Xbox SX (I missed these games on the PC because they had technical problems, and I was able to play them properly only in 2021).

At the same time, I had a GamePass Ultimate, but only some of the above releases were included much later and did not have DLC (which is more expensive to buy separately than buying the entire bundle).

Yeap.

But that is an issue with the quality of the subscription service.
I was talking more about how the day one releases on subscription services breaks like 80% or more of the revenue used to cover the costs of game development and marketing.

It basically doesn't support an AAA game development industry.
Hell it doesn't even support single-player development because you have to work with GAAS, MTX or games cut in episodies.

 

[ethomaz]

This probably is very for two threads here... he worked at Microsoft as Senior Public Relations Manager.

Brad Hilderbrand on LinkedIn: There are two reasons why all those Bethesda studios closed, and neither…

There are two reasons why all those Bethesda studios closed, and neither of them have anything to do with Bethesda (directly)... Game Pass and…

www.linkedin.com

There are two reasons why all those Bethesda studios closed, and neither of them have anything to do with Bethesda (directly)...

Game Pass and Activision.

The biggest paradox with Game Pass is that basically every game that launches on the service badly misses its sales goals. Makes sense though, why pay full price to buy a game when you can play it for "free" as part of your subscription? This is accounted for somewhat by attributing portions of revenue to top-performing Game Pass games every month, but there are factors working against games. Namely, the fact that most games don't stay at the top of the chart for more than a month or two, and also that Game Pass growth has stagnated. So games like Hi-Fi Rush, which is incredible mind you, gets a very small bump in revenue from being the hot Game Pass game for a month, then it falls off a cliff when everyone moves onto the next thing. Poor Redfall had it even worse since it launched so rough, it never had a chance.

This system was fine for a while when Game Pass was growing like gangbusters, but now it's slowed way down and the amount of revenue it's attributing to games isn't keeping up with the budgets to make them.

But, all that wouldn't have mattered even 3 or 4 years ago because back then Xbox was basically a rounding error on Microsoft's books. The division made some money, but more importantly, it didn't cost that much and other parts of the business easily covered the gap. Then Xbox went on a buying spree and spent a lot of money on Bethesda, but orders of magnitude more on Activision. Now, the Eye of Sauron has turned, and Xbox is expected to start making that $70B back, or at least cut expenses to the bone (and then some) while they try.

That brings us back to Game Pass. So far, the big bets on driving new subscriptions (Redfall, Starfield) haven't spurred near enough growth, and there's not much on the horizon that is likely to restart the momentum. The best bet is COD, but do you really risk the guaranteed sales revenue that franchise brings by putting it on Game Pass on Day 1 and potentially lose massive sales? I don't know what the plans are, but either you put it on Game Pass and lose money, or you don't and the subscribers revolt because they think that's what they signed up for.

COD will be fine though, as will the other mega-studios with huge IPs, but you're seeing the impact; all those smaller studios making really interesting games are going to fall away, simply because as good as games like Hi-Fi Rush are, they're never going to make enough money to make up that $70B hole that Xbox now has to dig itself out of.

 

[Gamernyc78]

This probably is very for two threads here... he worked at Microsoft as Senior Public Relations Manager.

Brad Hilderbrand on LinkedIn: There are two reasons why all those Bethesda studios closed, and neither…

There are two reasons why all those Bethesda studios closed, and neither of them have anything to do with Bethesda (directly)... Game Pass and…

www.linkedin.com

This is good. It's relevant to the post. It's adding to the negative effects of sub services like gamepass. I'll add to initial post, gracias.

 

[ethomaz]

This is good. It's relevant to the post. I'll add to initial post, gracias.

Yeap the part that after MS spend $70b in an acquisitions the execs now expect good results really tells a lot.
A pressure Uncle Phil (and Xbox team) never had before now it cutting it head.

 

[Yurinka]

I think it's common sense: first monetize the games selling them. And once they no longer sell any copy, then consider if it makes sense to include it in a game sub to generate some extra revenue once isn't selling anymore.

As he says, the exception would be MP GaaS like Fall Guys, which need to have the biggest playerbase possible at the start to work well.

 

[Cool hand luke]

This probably is very for two threads here... he worked at Microsoft as Senior Public Relations Manager.

Brad Hilderbrand on LinkedIn: There are two reasons why all those Bethesda studios closed, and neither…

There are two reasons why all those Bethesda studios closed, and neither of them have anything to do with Bethesda (directly)... Game Pass and…

www.linkedin.com

I feel like Microsoft's former Snr PR manager speaking out against Gamepass' viability is thread-worthy in and of itself, no?

 

[Gamernyc78]

I think it's common sense: first monetize the games selling them. And once they no longer sell any copy, then consider if it makes sense to include it in a game sub to generate some extra revenue once isn't selling anymore.

As he says, the exception would be MP GaaS like Fall Guys, which need to have the biggest playerbase possible at the start to work well.

I agree. Common sense.