Streaming: Where’s The Cost?

 


With talk of both Google and Microsoft pushing for all-in games streaming services, there’s been no shortage of opinionating.

And for the record – I think this is a good thing, on all fronts. I think given a decade or more of work, Streaming Games could be a viable solution to the growing problem that new games consoles are going to be heinously expensive. The XBox One X debuted at an eye-watering $500 and that was with the full knowledge that Microsoft would be LOSING MONEY on each sale, and with recent rumours and reports, Gen-9 consoles with even more hardware under the hood for a true-4K experience could be pushing the $600 mark, and that’s before you factor in the cost of a new 4K TV for many people. This is getting expensive, and the consumer isn’t going to realistically be able to keep adding $100-$200 each generation (not considering other expenses).

Of course, yes, streaming has its problems – though I note most worry more about latency and internet speed, which having spoken to an actual telecoms engineer (nice chap, found a year-old line fault a couple days ago) isn’t really the biggest issue for streaming. For games, the biggest fault will be packet loss – how much data goes missing between the server and the receiving console or box. If a 20MBps line can get 100% of the data and a 100MBps+ line loses, say, 20% of the data – the person on the 20MBps is going to have a much better experience than the person on a very fast but ultimately unstable line. Lost data means lag; audio lag, frame lag, input lag… and of course streaming a game entirely from a server is going to require a huge volume of data, as nothing is stored locally. The more data is lost in transit, the worse the end-user experience, and one of the main reasons PSNow! was so terrible (and why you download PS4 games through it now).

Having this debate is healthy and should be encouraged, so here’s an additional angle to consider; where’s the cost, here?

Shadow of War: Middle Earth

Though we really should be asking that question so much more…

Streaming may on the surface look cheap – Sony’s PSNow! is less than $20 a month, after all – but those are older games that have already had time to sell on the open market, any additional profits and/or monies gained by the streaming can be divided up relatively evenly and everyone gets to make a little more on stuff that otherwise has no market presence. That’s awesome. But newer games – or brand new games – is where I suspect they’ll run into a world of issues.

After all, we know games are becoming increasingly more expensive to make and distribute. Grand Theft Auto V had an overall budget of close to $265 million, but by and large today most big-budget releases tend to fall between $50 million and $80 million, with a handful broaching the $100 million marker. This is recovered in part by retail and digital sales, as a large chunk of that cost goes to the publishers/developers of said game, but in some cases even this isn’t enough. Hence we see a lot of microtransactions, we see day-one DLC, we see costume packs and season passes and so on. These additional costs are something akin to greed, sure, but they’re also horribly necessary in some instances.

If people are expecting an all-you-can-play streaming service for the price of a game each month ($40-$60), then budgets have to fall… or the costs have to be recovered in other ways. And with 4K on the near-horizon, I wouldn’t expect budgets falling any time soon. Quite the reverse, I’d say.

One hypothetical case is that every major publisher has their own “Streaming App”; ergo, you only need one device. And on the surface this seems reasonable until you consider the very, very real possibility this could end up a ridiculously expensive endeavour for consumers; if each app is, for sake of argument, $25 a month (it’s an easy number to work with) – you’ve got EA, Activision-Blizzard, UbiSoft, Capcom, Konami (yes, they’re still relevant), Bandai-Namco, Tecmo-Koei, THQ Nordic and that’s before you throw in Sony, Microsoft and Nintendo. All of those at $25 a month? That’s $275 every month. Every. Single. Month. Forever. I don’t care what you think of this idea; that’s not sustainable and I’d argue the whole thing collapses in a year, and even that’s with the addition of a healthy dose of optimism.

Another is that microtransactions and season-passes get applied to everything; in effect, sure you’re playing the games but you’re not getting the “full package” as it were. For that, you need to pay additional costs and monies. In essence, every game becomes a free-to-play cash-grab; with tons of otherwise innocuous or relevant content being held behind a paywall. People don’t like that sort of thing now and it is a huge part of why games like Destiny 2, Shadow of War: Middle Earth and Star Wars: Battlefront II hit the wall so spectacularly last year. And you still paid upfront for those games – consider how egregious things would get if these in-game loot stores were their ONLY source of revenue.

Destiny 2

Fancy Pants Costume:: $30. Viable end-game weapon? $20!

There’s also the possibility you still pay “upfront” for these games and a nominal fee to access the streaming; but even with the rising cost of bleeding-tech games consoles, it’s hard to justify this to many people. OnLive struggled for YEARS to do this – it’s part of the reason the company went bankrupt in the end – so what makes anyone think we’d take it now? The “nominal fee” is the crucial part of this; let’s say that an average console generation is six years – for sake of argument, yes it varies, I’m simplifying it for sake of easy math. If the nominal fee is $10 a month, then that’s $720 over the course of six years – possibly more than an actual games console would cost straight-up from the outset of a generation. And yes, streaming would still require you have a device to stream to – an additional cost. With a console of your own, and physical copies, you at least retain some ownership of the game you bought. As we have seen with games being removed from online sale over the year due to expired IP/Music licenses and so forth, you may not always have access to this product on a streaming service. And you won’t see a refund.

This is already happening by the way – in Japan, you can “buy” Resident Evil 7 and/or Assassin’s Creed: Odyssey on the Nintendo Switch and it can be streamed to the console. But it is made very clear you are renting the game – and paying full retail price for what amounts to six months of rental. Sure, enough time to complete the games in question (you can beat Resident Evil 7 in an evening if you want to), but I don’t think that retail model will translate over to Western shores. Japan is Japan. They have odd vending machines with questionable items and a mountain of anime porn of questionable taste. Love Japan and all, but some things are bound to get lost in translation.

Or, the other hypothetical, is that companies effectively converge under one umbrella. This might not sound like a terrible thing – but there are many laws about this, not to mention each company has a literal mountain of shareholders. All of which would need to be compensated. And we’ve already seen and heard how this ends up; Disney is swallowing up many companies, but it is made clear that you’re likely to see -less- content as a result, because the mergers are expensive enough, people invariably get laid off and you have less people working on fewer products. It’s already a problem in the industry right now that release schedules are drier than Joan Rivers (don’t start, she’d love that joke and you know it) – a streaming service needs a stream of content, and if you’re not able to provide tons of new stuff… what’s the point?

And sure, you could rely on indies; but the Switch is less than $300 and indies are flocking there, and asking reasonable prices on the whole (yes, a few exceptions, but take those as outliers). Why would you pay for an indie streaming service when you can buy these games and play them anywhere, anytime without any worry about your Internet connection? Nintendo has such a solid sales pitch there it’s almost laughable.

Nintendo Switch

Amazes me how by-the-nads Nintendo has the industry right now…

I do still think Streaming is “the future”; it’s too convenient and important not to be. But this future could range from a Utopian fantasy where everyone is able to get by and make some money somehow – it’s unclear how, maybe unicorn hair will save the day – under one roof to a dystopian nightmare where all parties are aggressively trying to rip the others apart (and it could spell the end for those awesome crossover games, so no more Fire Emblem Warriors or Mario + Rabbids: Kingdom Battles for you – and definitely the end of Super Smash Bros. as we know it!).

Like 4K, we’re focused on a fantastical concept without the understanding or even discussion on how to get to this fabled promised land; in 4K’s case, the lack of a viable physical media format is going to cause a range of issues. And in terms of Streaming, it’s the simple foundational conceit of money – how do you make a living from this? Netflix is, last I heard, $20 billion in debt. This is not cheap to maintain – and that’s before you even get to making video games…

If you hated the whole Loot Crate thing last year, then this is a thing that should terrify you. The industry would have to find new ways of getting us to spend money on these games, and I don’t think they’ll play at all nice either. Not when it is, effectively, their only major source of revenue.

Until they can find good, honest ways of doing this – I think I’ll stick to buying actual consoles and physical media where possible.

Sometimes it really is better the devil you know…

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