Following Apple's Lead, Google Launches Subscription Videogame Service
September 23 2019 - 1:25PM
Dow Jones News
By Sarah E. Needleman
Google is launching a videogame and app subscription service
this week called Play Pass that costs $4.99 a month, just days
after Apple Inc. unveiled an offering for the same price targeting
the fast-growing mobile-game industry.
The Alphabet Inc. unit said Play Pass started rolling out to
Android devices in the U.S. on Monday and will be introduced in
additional countries in coming months. The creation of Play Pass
comes as Google is planning a streaming videogame service called
Stadia that gives access to the kind of complex, big-budget games
available on consoles like Microsoft Corp.'s Xbox One.
The more than 350 games and apps available on Play Pass this
week won't nudge users to make in-app purchases or feature
advertisements. The apps, however, aren't new or exclusive to the
service, which means Android users can still access the same
content through the Google Play store supported by app purchases
and ads.
Apple Arcade, which became available last week, offers more than
100 games that are new and exclusive to the service.
"We're giving users more choice in how they enjoy and pay for
content and developers more choice in how they monetize and connect
with users," said Austin Shoemaker, group product manager at
Google.
Google said about two-thirds of the apps available in Play Pass
are games, while the rest cover a range of topics, including
fitness, weather, productivity and education.
Alphabet's Google and Apple are embracing subscription services
as a way to generate recurring revenue, which investors find
attractive. Such services have exploded in popularity in recent
years, spanning areas of entertainment ranging from movies and
music to books and news.
The companies are also going after the mobile-game market, which
accounts for the largest slice of the game-software industry's more
than $150 billion in annual sales.
But industry analysts have said getting consumers to pay a
monthly fee for mobile games, though, may be difficult since the
vast majority of those available today -- and the most popular ones
-- are free to play.
"Consumers actually like the business model as it's currently
constructed," Stephens analyst Jeff Cohen said. Only a fraction of
mobile gamers ever make in-app purchases, he said, typically
because they want to progress faster, play longer or customize
their characters. Meanwhile, others are happy to watch video
advertisements in games in exchange for virtual perks, he said.
And with services featuring games that don't offer in-app
purchases, Google and Apple are giving consumers an alternative to
a common and widely criticized moneymaking feature in games called
loot boxes. With loot boxes, players receive a blind assortment of
mostly common virtual goods, making rare items highly
desirable.
Government legislators have been cracking down on loot boxes in
recent years, arguing that they are a danger to children because
they function like casino slot machines. Earlier this year a trade
body representing the U.S. videogame industry, the Entertainment
Software Association, said it would require console makers Sony
Corp., Microsoft and Nintendo Co. to commit to new policies on loot
boxes.
In late 2017, Apple began requiring developers to disclose the
odds consumers face in receiving specific items before they
purchase loot boxes from games. Google adopted the same requirement
earlier this year.
A spokesman for Google said Play Pass wasn't a response to the
crackdown on loot boxes but said it wanted to give consumers and
developers more choices.
Write to Sarah E. Needleman at sarah.needleman@wsj.com
(END) Dow Jones Newswires
September 23, 2019 13:10 ET (17:10 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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