When asked, “What is the biggest threat to the video game industry today?” many would likely answer “live-service games.” Known in English as Live-Service or Game-as-a-Service (GaaS), this model has led to the closure of numerous game studios, especially since the mid-2010s. It has also driven many players away from video games.

Why Do Companies Persist with Live-Service Games?

Why do game companies insist on creating live-service games? What is the reason behind these games’ struggle? More importantly, what makes a live-service game successful? How should we evaluate this genre for the future of the gaming industry? In this article, we aim to answer these questions and explore whether these games are truly as harmful as they seem.

First of all, we don’t believe that “all live-service games are bad.” However, we think they are often misunderstood by both players and companies, with players bearing the brunt of this misunderstanding. To explain our view effectively, we need to discuss the origins of this genre of games and their evolution to the present day.

The Emerge of Live-Service Games

Live-service games are not a new model; they are one of the most established models in the video game industry. However, recent technological advancements and changing consumer habits have made them more prominent.

The roots of these games can be traced back to MMO games like Ultima Online and EverQuest. These games were not initially labeled as GaaS but were known as MMOs, or massively multiplayer online games. The game that truly popularized this genre was World of Warcraft, which laid the foundation for live-service games.

World of Warcraft’s development model was simple yet clever. By offering new content at regular intervals, it aimed to expand the game’s scope and keep players engaged. Unlike its predecessors, WoW introduced a subscription model, requiring players to pay a monthly fee to play. This provided a steady revenue stream for the developers, ensuring high-quality content.

Over time, a similar system known as the “battle-pass” became a staple in the industry. This system did not require players to pay a monthly subscription fee to play the game. After purchasing or downloading the game, players could play indefinitely. However, certain features and sections of the game were placed behind a “paywall,” requiring regular payments to access them.

These two concepts form the foundation of GaaS. For this type of games to work, these concepts must operate in harmony.

What Went Wrong?

So, why is there so much disdain for live-service games today? Why does this model often fail? The biggest flaw in this seemingly solid model is, unsurprisingly, money.

The main advantage of live-service games is that they offer opportunities to companies with limited development budgets. Studios can use the steady income from post-launch to enhance the game with better and higher-quality content. However, seeing the success of a few smaller companies, industry giants like Electronic Arts and Ubisoft wanted a piece of the pie.

Early failures in this genre, such as Battleborn and Paragon, went relatively unnoticed because they were developed by mid-sized companies. However, a few years later, the model caught the attention of major companies like Electronic Arts and Ubisoft, initially raising player expectations.

Anthem, released in 2019, and Hyper Scape, released in 2020, faced heavy criticism from players. These projects resulted in significant financial losses for Electronic Arts and Ubisoft. Another live-service game, Avengers, published by Square Enix, also faced harsh criticism, and development was halted shortly after its release.

Despite these failures and growing player resentment towards live-service games, major companies continued to develop them. Babylon’s Fall, another live-service game published by Square Enix, was discontinued about a year after its release, with the developer announcing they would no longer support the game or release new content.

The Impact of GaaS on the Industry

As mentioned, live-service games have caused significant financial losses for many major companies. Studios like Visceral Games and Capcom Vancouver were closed by their parent companies due to the failure of these games or the cost and difficulty of developing them.

Today, a few games like Genshin Impact and Final Fantasy XIV have successfully integrated this model and remain standing. However, live-service games have inflicted substantial damage on the video game industry over the past decade. Additionally, influenced by the revenue from these games, major companies have canceled many single-player projects, reallocating resources to GaaS.

The Future of GaaS

Today, some major game companies have retreated from GaaS and returned to developing games in genres where they excel. However, other companies continue to invest millions in developing successful live-service games.

In our opinion, the live-service model is not suitable for large companies. It is a more appropriate choice for companies and studios with limited development budgets that aim to increase their budgets through live-service games.

To read our other blog posts, click this link. We hope to see more high-quality and entertaining live-service games in the future and wish you a great day.