Let me set the scene.
The market for new premium games has had a tough few years.
Last year across Europe, new game releases (so titles actually launching in 2021) accounted for less than 30% of all games sold.
There are many pilots around that. First, it’s been a relatively quiet few years for new titles, in part due to COVID-related delays.
Then there’s the continued lack of PS5 and Xbox Series X stock, which has at least delayed some gamers’ buying intentions.
“The age of engagement is increasingly at odds with the business of selling new $70 games”
Game prices have also risen significantly, and for uncertain times. Not all publishers have raised prices, but discounts have come down – the days of retail competition driving down costs are long gone.
The price situation has worsened with the fall in the second-hand market and the recovery, an inevitable consequence of the reduction in the release of games and the boom in downloading.
The dominance of service-based games – GTA Online, Fortnite, Destiny and others – means gamers spend months, if not years, in a single title. Many of these games are even free.
Now there are also subscriptions. The Xbox Game Pass is the most famous example. But even on PS5, every PlayStation Plus subscriber has access to 20 of the greatest PS4 games to play at no extra cost.
On top of that, game companies have started offering big titles during COVID-19 shutdowns. Sony’s Play At Home initiative has seen the platform holder distribute AAA games to millions of its gamers.
With so many great free-to-play games and live-service titles to play, is it any wonder gamers aren’t spending high prices on solid 8/10 releases like Guardians of the Galaxy or Far Cry 6? Is it any wonder when a game doesn’t deliver, like Call of Duty: Vanguard or Battlefield 2042, that players are happy to miss it?
The age of engagement is increasingly at odds with the business of selling new $70 games.
If there’s one exception to the trend, it’s Nintendo, a company that always had a foot in the way things were going. Premium Switch games continue to perform well, as well as in physical stores.
But even that fits the theory. Nintendo’s live service support for its biggest games has a limit (the decision to stop making DLC for its mega-selling Animal Crossing game after 18 months remains an interesting choice). Its subscription service – mostly DLC and retro games – is purposely designed to complement, not replace, its premium business. For Nintendo, the model remains: ‘buy a physical game, complete it, buy another’.
Yet aside from Nintendo, the business of selling new games has become a challenge. And that meant the start of 2022 was sure to prove fascinating.
Late January to mid-March was exceptionally packed with major titles, such as: Pokémon Legends: Arceus, Dying Light 2, Horizon Forbidden West, Elden Ring, and Gran Turismo 7. Meanwhile, popular older titles picked up this period to give us something more. There was the highly anticipated Destiny 2 expansion, The Witch Queen. Cyberpunk 2077 has been significantly updated and looks like the game everyone was hoping for. And Grand Theft Auto 5 – the biggest game in the world – has been re-released on new consoles for a low price.
Even ten years ago, such a high number of novelties – outside of the Christmas gift period, anyway – would have resulted in quite a few failures.
Remarkably, however, it’s hard to argue that any of the games in the last two months underperformed. Everyone seemed to be doing pretty well.
There were some standout performances, of course. Elden Ring moving 12 million copies in three weeks is an incredible feat, especially when its spiritual predecessor – Dark Souls 3 – took four years to sell 10 million (which was also considered a triumph).
Pokémon Legends: Arceus was also a smash hit. Granted, a Pokemon Switch game that sells well might not seem unusual, but this was a different take on the series, and released just two months since the previous game. Seeing this title deliver similar numbers to traditional Pokémon releases defied expectations, and even Nintendo was taken by surprise and had to quickly replenish retail inventory.
Outside of Pokémon and Elden Ring, there have been a lot of strong performances. Some might have expected a little more from Horizon Forbidden West, but given the PS5’s manufacturing challenges, this seemed like a decent opening to me. Gran Turismo 7 may have been ‘only’ GT’s fifth biggest UK launch, but it’s also the fastest selling in 12 years and beat the launch of PS4 hit GT Sport.
Even WWE 2K22, one of the smaller releases that was in danger of being overshadowed by all the fancy blockbusters, sold twice as many copies in the UK (at launch) as its ill-fated predecessor: WWE 2K20.
So what can we conclude from all this? Was the assumption that premium games suffer against free, live and subscription games just plain wrong?
“There’s no room for mediocre anymore in the premium space, even ‘very good’ isn’t going to cut it”
To some extent, I think so. It’s easy to forget that a player engaged in GTA Online or Game Pass also plays games in general. You could say that these live service titles keep players from going elsewhere. But you could also say that they allow people to play even in the quieter months.
There’s a connective element to the big games of the last few months: the majority of them were fantastic. I’m not sure I’ve seen so many “Recommended” or “Essential” scores from Eurogamer in such a short time. It was a time of true excellence (and what great publicity the past few months have been for the power and influence of video game reviews).
It’s hard to disagree with the logic that the rise of high-quality service-based games and the variety of content available in a subscription service is having a detrimental effect on new game sales. But there are also more active players than ever. And if you can offer them something special, they’ll get into it, regardless of the business model.
Late last year, Marvel released a high-quality Hawkeye-based TV series on Disney Plus. At the same time, he also released a very high quality Spider-Man movie in theaters. One didn’t hurt the other. People were watching both.
The games are different, of course. But Marvel’s theatrical and small-screen success shows that business models and distribution methods aren’t deal-breakers for consumers.
Of course, it helps that Spider-Man: No Way Home is one of the best superhero movies of all time. Just as that helps, Elden Ring is one of the best RPGs of all time. There’s no room for mediocre anymore in the premium space, even “very good” isn’t going to cut it.
Competition has never been tougher. But the past few weeks have shown that the market for premium games is alive and well, and with the right title, the results can be spectacular.