As Gimps continues its success, trying to allay players 'and experts' concerns about shared services, Ed Fries, a Former manager The Xbox division has expressed concern about the potential impact of the company's Gimps share service on the gaming industry.
In 2004, one of the people involved in launching the first Xbox console was asked what he would do if he were still in Microsoft's video game division today.
Who is "afraid" of the impact that Gimps could have if it becomes a dominant business model like Spotify in the music industry. He also made extensive claims about Spotify's impact on the music industry, some of which have been disputed by experts. The industry became. In January 2022, Microsoft announced that the number of Gimps subscribers had reached more than 25 million; So there is still a long way to go to reach the level of Spotify (182 million) and Netflix (222 million) subscribers. In fact, it has recently been estimated that shared services account for only 4% of the annual revenue of games in Europe and North America, while the same services account for 65% of global music revenue.
Microsoft and PlayStation have said they do not think shared services will ever become the dominant model in video games. However, Fries encouraged executives on both platforms to be careful about the business models they developed. "What they have done that worries me is Gimps," he said. Gimps scares me because there is something similar in the music industry called Spotify. When Spotify arrived, it destroyed the music industry. Spotify has literally cut the music industry's annual revenue in half. He made people stop buying songs. For example, people do not buy songs on the iPhone because they have to. All of them are in shared services. "Apple has said that it will destroy the ability to buy songs because no one else will buy them."
"So we have to be careful not to create a similar system in the gaming industry. These markets are more fragile than people think. I saw that the gaming industry destroyed itself in the early 80's. I saw the educational software business destroy itself in the mid-1990s; they literally destroyed a multibillion-dollar market in a matter of years; So Gimps worries me. As a customer, I love it. I like Spotify as a customer because I have all the songs I always want, as a great customer. "But not necessarily great for the industry." At one point Spotify reached a point where everything else had to be present. The percentage of games in Gamps is still small and there are many games. "More than 200 games are downloaded to Steam every week, and more are coming for mobile phones."
The impact of streaming and shared services on the music industry as a whole has been very beneficial, VGC said. "Spotify did not cut the music business in half - Pierce (unauthorized download) did," he said. "Spotify and the cloud-based technology it relies on have actually given music fans a legal and easier alternative to watching." Launched in the United States, the global recorded music industry has grown by 73%, from $ 15 billion in annual revenue to $ 25.9 billion in annual revenue in 2021.
Ingham's words seem true, and Spotify It has been useful in the music industry. However, Ed Fries's concern is not in vain, because the conditions of the music industry and the video game industry are completely different, and their development trends are completely different. Reimbursement and profitability for an AAA game that may cost $ 200 million or more and take at least 4 or 5 years to develop is very different from producing music.
In response to Ed Fries's claim, Christopher Dring, GameIndustry.biz Editor-in-Chief and ReedPOP, Head of B2B Game Division, acknowledges concerns about the impact of shared services on the game industry if they reach Spotify, but raises the question of whether these services can be used in the gaming industry at all. Whether or not they reach the level of something like Spotify or Netflix, he says. Not only have they been a source of income for themselves, but they have immediately made the games available to millions. "There are many examples where a work on one of the shared services on a console has become very popular, which has led to a typical $ 60 increase in sales on other platforms."
There are concerns that these services, like the music and television industries, will dominate the gaming industry. The shared services model does not necessarily generate the revenue required for AAA games, especially single-player games without in-app payments. "This is one of the reasons why Sony is reluctant to put its latest games on PlayStation Plus." Music and television linear entertainment are much shorter and more digestible. How many songs do people usually listen to or watch a few TV series based on the experience of a game? If you are a player who only plays a few games a year - like FIFA and Call of Duty - how likely are you to subscribe to a service with hundreds of games? "It remains to be seen how large the shared services of the games will be."