Subscription Services – Paradox Podcast – The Business of Video Games

by CHZ



The Business of Video Games podcast is back to discuss the growing market of video game subscription services.
We talk about how the subscription services affect the game industry as a whole, Paradox as a publisher, and attempt to answer your questions on the subject.
Timestamps:
What we’ve been up to – 0:15
Topic of the Day: Subscription Services – 5:45
Answering your Questions – 34:17
Thank you for watching! Join us in 2 weeks, on 5th of May for our discussion on the effect of COVID-19 Pandemic on the video games industry!

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ParadoxExtra is a streaming archive of Paradox Interactive. Nearly all of the videos on this channel are recorded live on http://twitch.tv/paradoxinteractive.

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25 comments

ParadoxExtra September 20, 2020 - 10:26 am

It's great to be back! Expect to see us regularly now, every 2 weeks, on Tuesdays!

Today we talk about the subject many of you have been wondering about. The growing number of video game subscription services, our thoughts on some of them and our place, as a company, in that market.

We also attempt to answer some of your questions, near the end of the episode. Enjoy!

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crazymanmot September 20, 2020 - 10:26 am

I think the real problem with game subscriptions is more psychological than anything else. The idea of eventually your subscription will run out one day and you will be unable to continue to play the game you paid for is hard to swallow for many of the persons complaining about it. My theory is that you can't get someone off the "ownership" mindset and into the "subscription" mindset easily but you can slowly lace their products with it to get them to slowly accept it more and more and perhaps even convert to it or you can use it as a temporary bonus due to the expiring nature of the subscription. Say, for example: a one time discount to the subscription (say a 30% off a month, 50% off 3 months) whenever they buy the latest expansion within some period of time of its release. You can even try a month free as a pre-order incentive. The idea being to show those persons how convenient a subscription model is while still keeping them happily spending money on buying the games and expansions (similar to how Witcher 3 made players comfortable using potions, after I played Witcher 3 I've been much more comfortable buying and using potions in Pokemon, Skyrim, etc. when before I'd just always sell most and keep a few that I never use).

I think the true hidden poison in subscription models is that most of us have a tendency to want to cut down on recurring expenses (and we really like recurring revenue, see stats on how average players build churches that would take 20 years to pay for itself and how they tend to desperately keep below force limits) couple that with the fact that if you have one subscription active to one game it adds a mental barrier to subscribe to another cause you can't really be playing 2 games at the same time so you will likely stagger your subscriptions among games you want to play, meaning subscription based games more directly compete with other subscription based games while still competing with other games in general and the other "owned" games have a leg up in this race because if I swap over to them I can cancel a subscription which is a huge incentive for some to subconsciously get bored of your game. Not sure if these are facts but this is what I think based on my own personal experience (which is a few years playing WOW and how glad I am that I no longer play that game).

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Jeff H September 20, 2020 - 10:26 am

Interesting topics to think about. I think your specific products are very amenable to a subscription service, considering it is not uncommon to put 1,000 hours into ONE of your many games. I personally would not have a problem paying a few bucks a month for EU4 or HOI4 as opposed to $40 upfront and $20 a few times a year. However, I see a future problem of what do you do when a game starts to trail off? If you make a sequel (CK3) or the number of subscribers for an older game (Vic2) does not warrant significant new content. Maybe its available as-is for a low cost or anybody who has subscribed for 24 or so months just gets to own the game at that point without new content? Lots to think about there.

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Patrick Rae McGown September 20, 2020 - 10:26 am

Welcome back still listening but I am gamepass member for PC (bought because your on it) but since I have most of your base games is there a way I can access my dlc while playing through gamepass so you all can be properly compensated for the amount of "attention" hours your titles generate off me in that particular ecosystem?

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Quikie93 September 20, 2020 - 10:26 am

I'm interested in this new way of doing things.
But one thing kind of remained unclear throughout; Are we talking ONE subscription for the entire library of games
Or specific subscriptions on a per game basis?

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Gustavo Henrique September 20, 2020 - 10:26 am

The day PDX starts locking exclusive content behind subscriptions, is the day I'll consider jumping ship to piracy.
So don't do that please, I love giving you money to do the excellent work you do, don't make me stop.

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Lastfreethinker September 20, 2020 - 10:26 am

I would rather pay you a large sum once than a small sum multiple times and never own the game.

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xlnt September 20, 2020 - 10:26 am

So you want to be Steam? Cool with me honestly, i do prefer one sub, not many – but that would not stop me from getting a good 1vs1 multiplayer game. I will still never pay more than 15EUR for a single play game (;

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The Spanish Inquisition September 20, 2020 - 10:26 am

Of course any game company with a sub service would want to have people to play their games for thousands of hours like paradox games, that just means more money over the long term then when people buy it. I think the sub for your games is a decent idea, to get people into it, but you should not expect people to keep paying the sub over thousands of hours over months. It just does not pay off in the long term, just buy the game and dlc normally and you can play as long as you want. If you do the sub, there probably has to be new content like you mentioned at 28:30.

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Martins Berzins September 20, 2020 - 10:26 am

Soo 15eur sub service on Steam for play what you want in about 5-10years.

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MOIISKA September 20, 2020 - 10:26 am

Subscription services for games are awful.

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XsiadzBiskup_PL September 20, 2020 - 10:26 am

Isn’t CKII already a 'subscription service'? 🙄

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Mike K4ISR September 20, 2020 - 10:26 am

I see it both ways… pay $10/mo to try out some games I might otherwise not try, and when I don't like them, simply remove them. This would save us money in times like how I paid full retail for AOW: Planetfall and only played it a few times because it is just a boring game… On the other hand, to keep the few games I do like long term it is either continue paying the money monthly, which could easily exceed the retail or sales price of the game after just a few months, or be forced to pay retail for them after I've already paid that same amount via the subscription. I do not know of any company that applies an "X months of subscription = free game to keep", instead when you cancel the subscription, and even though you may have paid $60+ and played only 1 or 2 games, you would still be forced to pay again full retail for the game, costing you twice as much.

If they want any of these game subscription systems to succeed, they need to have a "free full game key for every 6 months of being a subscriber".

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Nicol Bolas September 20, 2020 - 10:26 am

I hate games as a service.

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Evan B September 20, 2020 - 10:26 am

Listen to this episode I can't help think about Imperator. You guys are talking about "falling in love" with your games and having players come back. Unlike Stellaris, Eu4, Hoi4 and even Victoria 2, Imperator has had a really difficult time attracting a base even with all the work and free patches. Do you guys have thoughts and maybe things that should be done in the future from a marketing/design prospective so (objectively) you don't have another game that launches like Imperator?

Love the podcast! <3

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Clifford Dutka September 20, 2020 - 10:26 am

So glad that you guys are back 🙂 and congratulations on the new addition to your family.

For me, the way I play Paradox games, I don't think a subscription would work for me, as I put a shit ton of hours in your games but in spurts every few months. I also worry that we won't be able to get big expansions like Federations anymore, and instead the content ends up being a slow dribble of lower quality content like FTP games on mobile devices.

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Majber September 20, 2020 - 10:26 am

Please that "upcoming stuff" be Shadowrun game.

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Kostchtchle September 20, 2020 - 10:26 am

Crusader Kings 2 on GoG please 😛

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Bart Simpson September 20, 2020 - 10:26 am

wow thanks guys for making this video and talking about something that clearly has some gamers on either side good and bad, I have a gaming PC and an xbox but my xbox hit the crapper 3 months ago and my PC can barely handle a decent game unless i buy a new graphics card. cities skylines has been my jam for many years and i haven't touched it since stadia ( playing Red Dead ) your right convenience makes a huge difference and Stadia has been so easy of a convenience for me going from my pixel phone to my Asus laptop thats about 7 years old and my 5 year old PC… please bring Cities skyline to Stadia PLEASE I will double DIP lol i would love to put hours into the game and not worry about my fan running on my PC. It's a small community of players and games but we are strong!

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frank cui September 20, 2020 - 10:26 am

25:42 the retail analogy of competition from e commerce takes the circle from game pass back to platforms like steam, no?

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FCGroningen1987 September 20, 2020 - 10:26 am

Some things I think that are important in relation to this podcast:

– It's nice that the gaming industry is still makes money, but my prediction is that will change the moment more people lose their job or have to spend the money they have on more basic needs.
– I can't help but be a bit sad that EA's business model is now generally taken over by most companies without further fuss from the industry.

Yet, the current DLC business model has it's own issues as well. As you said with CK 2, you require your base game to be enticing enough for people to buy DLC and spend a lot more hours on it. Imperator: Rome in my eyes proves that in the current business model a fresh base game can't compete with a fully fleshed out similar game like Europa Universalis IV. It clearly showed in the initial reviews.

I however, would probably feel less inclined to play a subscription based game. It turned me off from World of Warcraft and it will probably stop me from trying subscription based games in the future as I'd be afraid I'd be spending money on a game I turn out I wouldn't be playing (enough) to justify the money I paid. Throwing in free trial weeks wouldn't help in my case; After the free access weeks in World of Warcraft, I stopped playing as I still wasn't sure I'd be playing enough hours to justify the cost.

I think that if you want to make more money as a company, the business model of selling games is a lot less important than the quality of the games and DLC you release. The past year, steam reviews alone say it's hit & miss in the best case scenario.

What I say might be controversial and I definately would not want to cause people to lose their jobs, but maybe it's time to review the use of all the new people hired. From what I gathered from older podcasts and quarterly year update streams is that most new jobs that got created were in the marketing department. Maybe too much money is being spent on marketing; marketing that can be done by content creators and in-house streaming. Money that could instead be spent on people that actively work on the game so more bugs can be squashed and more content can be added to base games and DLC released. Regardless; the vast majority of PDS/X customers will agree with me if I say that people will accept the DLC policy AS LONG AS the quality of said DLC is sufficient to justify the price. Just as people would have been fine paying 60 bucks instead of 40 for Imperator : Rome at launch if it had sufficient content.

Other ways of saving more money for development would be making an investment to buy back shares from your holders so you have to pay less dividend and have less outside pressure to release a game before it's ready.

Above all I'm curious to see how PDS/X customers think about a new subscription system. Is there data available on the EU4 subscription experiment? It's a difficult game to extract data from I expect considering how old the game is already.

Another last note on a flow of constant updates that come with a subscription model: If the checksum on quite a few PDS titles change each time new content is released, it will be difficult to finish ironman runs. PDS would have to make sure all new versions are save game compatible. Also, in the 1.29.4 patch for Europa Universalis IV, the game suddenly destabilzed for me and other users after a supposed contentless patch that was just there to allow the subscription experiment. For some reason, I still can't play EU4 with a USB gamecube controller plugged into a USB port. Just a minor example of course, but I'm saying that not all patches run smooth causing quite some annoyances.

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frank cui September 20, 2020 - 10:26 am

Good to see the podcast back

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Mihir Chitnis September 20, 2020 - 10:26 am

Does xbox game pass include popular paradox games along with their latest DLC's ?

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Jason Themites September 20, 2020 - 10:26 am

I have been a fan of you guys for many years i have bought your games on mac store and played your games on a very expensive macbook for work but from time to time i have used it for gaming. I have Stadia i am a founder and i already own about 18 games on the platform, but games like the ones you guys make my god would change my world, if people are into builders gate on stadia then i know people would go crazy for a couple of your games on stadia. PLEASE PLEASE look into it … I will buy every game in your library lol

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Dsingis September 20, 2020 - 10:26 am

What do me weak old eyes see? A new Paradox Podcast. Praise be god!

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