Research shows that game subscription revenue will reach $22 billion by 2027

October 20, 2023 by No Comments

We live in the age of subscription service. From television networks to food delivery and from clothing to cars, everything can be paid for by subscription these days. In the games industry, there are more paid subscriptions than you can shake a controller at, and research reveals that revenue from these services will skyrocket in the next four years.

In a report published by Omdia, the market revenue secured by gaming subscriptions and cloud gaming market is expected to exceed $22 billion by 2027. As of now, it is hovering around the $16 billion mark. The report divides the market into eight sub-categories, including game subscriptions, cloud gaming libraries and ‘platform access’ subscriptions.

That’s a lot of money

It’s no wonder that every operator in the business seems to be looking to some form of subscription-based model to boost its finances in this day and age. From PS Plus to Xbox Game Pass and GeForce Now to things like Loot Crate, there are hundreds of potential subscription services that a gamer can soak up.

In a statementGeorge Ziziashvili, Senior Principal Analyst at Omdia, talks about the concept of subscription model in gaming:

Subscriptions have become a cornerstone of popular game companies, which increasingly emphasize expanded capabilities, exclusive content, and cross-platform accessibility. However, the role of subscriptions as a primary business model remains unproven. Sustaining blockbuster game development on this model while providing a cost-effective and user-friendly experience raises difficult financial questions. This further underlines our belief that while subscriptions will continue to grow, they will not become the dominant business model for games but will complement a diverse range of monetization mechanisms.

The report states that between Xbox and PlayStation, 51 million subscribers pay for ‘games library services’. By 2027, cloud gaming providers are expected to earn up to $6.4 billion, and in-game subscriptions will contribute 30% of the total pot.

As cloud gaming becomes more accessible over time and the infrastructure that drives these services becomes more reliable and resilient, I believe we’re going to see a revolution of sorts. For every new console that hits the market, we’re seeing fewer digital-only alternatives, and increasingly, the games being offered through subscription-based services are getting better and more competitive.

For more Insider Gaming coverage, check out the news that Diablo IV will be free-to-play this weekend – digitally

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