The future of the gaming industry is not about subscriptions, according to a Circana analyst
The gaming subscription market in the U.S. has nearly stopped growing, claims Circana analyst Mat Piscatella. This trend makes the expert skeptical about assertions that Game Pass and other similar services might eventually take over the gaming industry.
Piscatella argues that after the boom in 2020-2021, American gamers' spending on subscriptions has stabilized at roughly the same level. Since then, spending has only shown significant growth once—in the fourth quarter of 2024, after Call of Duty: Black Ops 6 appeared on Game Pass. At that time, subscription spending in the U.S. increased by 12%.
"Subscriptions are definitely not the future of gaming. However, they could continue to be a part of it [...] The data in the U.S. suggests this, at least for now. I can't say the same for other regions," the analyst concluded.
Piscatella has previously pointed out the stagnation in the U.S. gaming subscription market. He shared similar findings in January 2024 after a Ubisoft manager stated that people should transition to subscriptions and get accustomed to the fact that they don't own games.
Notably, in 2022, Phil Spencer, head of Microsoft's gaming division, admitted that the corporation does not expect explosive growth from Game Pass. According to him, at that time, the subscription accounted for about 15% of Xbox revenue (i.e., generating around $2-3 billion annually), assuming Microsoft "reached everyone on the platform who wanted to subscribe." Therefore, Spencer assured that it's unlikely that Game Pass will ever generate even half of the division's revenue.