If you have followed gaming news over the past few years, you’ve no doubt run into the concept of “games as a service” (GaaS). Video game publishers use this business model as a way to monetize video games after the initial sale.
Think of it as the PC software industry's turn toward the software as a service (SaaS) business model, which is used to sell recurring subscriptions to products like Adobe Photoshop and Microsoft Office. However, GaaS extends beyond monthly or annual subscriptions, and it applies the philosophy of service-based pricing toward games in a number of ways.
This culminated in the creation of live service games (aka “living games”) from such major publishers as Electronic Arts, Ubisoft, Activision Blizzard, and Take-Two Interactive. These games serve as a way for publishers to gain recurring revenue from their biggest titles.
In this article, we’ll define exactly what a live service game is, the different types of live service games available today, and how they’re impacting the gaming industry.
What is a live service game?
A live service game is a game for which a video game publisher plans to continue providing new content, which is sold to the player at incremental rates.
This additional content is usually not necessary to enjoy the core experience of the game. Rather, it is meant to keep gamers interested in the title over a number of years and to sell them recurring content that enhances their enjoyment of that game.
Origins of live service game
Massively multiplayer online role-playing game (MMORPG
) publishers such as Activision Blizzard (or simply “Blizzard” at the time) pioneered the format with World of Warcraft (WoW)
. Following its release in November 2004, it had one of the biggest player bases of any game on the planet. To fund continued development, Blizzard required players to pay a monthly fee to access and play WoW
. The company also charged for expansion content
that both provided new worlds for players to explore and increased the player level content.
To play WoW and enjoy the full experience, you had to purchase the base game, pay a monthly subscription fee, and then also buy any expansion content. These days, these different types of approaches to selling GaaS content aren’t usually rolled into one title.
Instead, video game publishers have adapted the games as a service model to the modern free-to-play approach. This allows anyone with an internet connection to access the game for free, but you’ll then have to pay for updates, expansion packs, and other new content.
How publishers approach GaaS
The GaaS model is highly profitable for video game publishers. They can monetize their games almost indefinitely while pouring development dollars into creating updates and tweaks into existing games rather than developing entirely new titles.
There are many other ways the game industry profits from the rise of GaaS. Here are 4 of the most prominent ways that game publishers create "living games" and keep their player base alive and growing.
1. Game subscriptions
In many ways, game subscriptions were the forerunner to live service games. Big MMORPGs such as Everquest changed everything when they used this model before WoW appeared in 2004. Now, game subscriptions are largely relegated to MMORPG titles, such as Final Fantasy XIV.
Most major live service games are free to play. You can also buy them as a standalone title with new purchasable content becoming available at regular intervals, as opposed to paying a monthly subscription to play the game.
2. Game subscription services
Game subscription services are a growing sector of the GaaS realm. Even tech giants like Google and Amazon have attempted to capitalize on the action with the launch of Google Stadia and Amazon Luna. These tech giants have shifted away from developing their own triple-A (AAA) games and, instead, they largely rely on licensing games from other publishers to sustain their game subscription services.
At the same time, Microsoft and Sony – as well as some other publishers – have made great strides with their own game subscription services in Xbox Game Pass and PlayStation Now, respectively.
These services also feature many, if not all, of the exclusive games published by these companies. For example, Xbox Game Pass includes every Halo and Gears of War title, while PlayStation Now is home to first-party releases like The Last of Us, Ratchet & Clank, and Uncharted.
For example, Microsoft acquired ZeniMax Media
for $7.5 billion. This purchase included all of the games under the ZeniMax umbrella such as those developed and published by Bethesda Softworks. This provides Microsoft with the opportunity to release future Bethesda titles – games from the Elder Scrolls and Fallout series – on Xbox Game Pass on day one.
Each of these platforms offers different games and different pricing models, with exclusive options and a combination of cloud-based games and downloadable titles.
Microtransactions are one of the most popular ways that publishers sustain their live service games. These microtransactions tend to be cosmetics, such as in-game skins for particular characters. While titles like League of Legends
, and Apex Legends
allow players to directly buy the skins they want, other titles like Overwatch
hide their cosmetic items behind loot boxes.
Loot boxes are a roulette-style approach to microtransactions, and do not allow players to directly purchase the cosmetics they want. Instead, you have to buy loot boxes and hope you receive the item you want. This practice has come under scrutiny by certain European Union member countries, with several banning them outright
due to their violation of the country's gambling laws.
Today, most video game publishers avoid the pay-to-play model that once dominated microtransactions. Most games that use microtransactions, such as Overwatch and League of Legends, also provide players with the opportunity to level up and grind toward unlocking loot boxes for free.
4. Season Pass and Battle Pass
The season pass and battle pass model of GaaS is becoming more and more popular among game publishers. This is very similar to single play downloadable content (DLC
), which has been around for decades now. However, most live service games are not single player, and single-player DLC is not as prominent as it once was.
Under the GaaS model, games such as Fortnite, Destiny 2, and Rainbow Six Siege release season passes at regular intervals. These divide the game into different seasons, which allows the publishers to sell these season passes to players who want to unlock all of the new loot and skins available during that period.
Players can keep these items indefinitely and use them in subsequent seasons in order to show "social proof" to other players that they unlocked those items. Many of these games also take this a step further by adding story content to many of their season passes. Whenever Apex Legends adds a new “legend” to its roster, for example, the game developers also share a video that unpacks the character’s history and reason for entering the arena.
The trend is also popular in fighting games such as Mortal Kombat 11, Street Fighter V, and Super Smash Bros. Ultimate. By buying a pass for these games, you can download and fight as new characters as they become available.
5. Online-only game add-ons
Take-Two Interactive, which owns Rockstar Games, has used this model to great success by spinning off Grand Theft Auto Online
and Red Dead Online
from Grand Theft Auto V
and Red Dead Redemption 2
These are online-only titles you can purchase separately or get for free with the base game. They may be “different” games, but they use the same world and many of the same assets from their single-player counterparts, which reduces development costs.
Take-Two Interactive then uses the GaaS model to continually update the online versions of their core titles and then sell in-game items to players to enhance their game experience. Other publishers have taken notice and begun to implement similar separate online-only experiences, too, including Ubisoft’s latest entry in the Watch Dogs series, Legion.
Whether you love or hate the GaaS approach, the trend is here to stay. Game publishers stand to make much more money by leveraging the power of the internet to create "living games" and continually update them with new content that they can then sell back to the players. This also helps keep the game alive longer than its initial shelf life.
And with major game publishers creating game subscription services, game publishers may begin to create games exclusively for their own subscription platforms. The GaaS model live service games have positives and negatives, but game publishers have latched on to the model as a way to expand their business.
About the Author: Daniel Horowitz is a contributing writer for HP Tech Takes. Daniel is a New York-based author and has written for publications such as USA Today, Digital Trends, Unwinnable Magazine, and many other media outlets.
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