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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)

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