When Bungie launched Destiny in 2014, it was one of the first major game releases that wasn’t an MMORPG to offer a live-service model that required players to be persistently online. Given the ongoing success of Destiny, other games like Tom Clancy’s The Division, Grand Theft Auto Online, and Apex Legends soon followed suit. Despite major differences in gameplay, these titles all share a similar monetization scheme that focuses on battle passes, paid downloadable content, or other types of microtransactions.
Large companies like Activision Blizzard and Ubisoft with hugely popular titles have seen incredible profits from their “games as a service” models. In 2021, Activision Blizzard earned $5.1 billion from microtransactions and DLC for games like Call of Duty: Warzone and World of Warcraft. HoYoverse’s Genshin Impact, which brings all of the gacha gameplay elements seen primarily in mobile titles to PC and PS5, has brought in $3 billion since it launched in September 2020. Clearly, live service has proven to be an extremely lucrative business model.
As part of its fourth quarter earnings call, Electronic Arts revealed that over 70% of its revenue comes from live-service titles. These include a number of games like Apex Legends, FIFA Ultimate Team, and Battlefield 5. In fact, Apex Legends alone has raked in $2 billion in earnings for the gaming giant since it launched in February 2019. And that number is only growing. EA’s CFO, Chris Suh, shared during the call that the revenue brought in by the battle royale shooter increased by 40% when compared to 2021, and the company expects that Apex Legends will eventually earn $1 billion per year.
It’s little wonder, then, that so many game companies are turning to live-service models. PlayStation CEO Jim Ryan has stated that he believes live service will ultimately perform better than subscription services, and Sony plans to release 10 live service games by 2026. Other companies like Gearbox are rumored to be working on live-service projects as well, and even titles like Far Cry 7 that haven’t even been announced yet are expected to be live services.
However, it’s important that companies get these things right, or they could suffer long-term financial damage. Square Enix recently sold off a number of its Western studios: Crystal Dynamics, Eidos, and Square Enix Montreal. Some people believe the deal was to recoup some of the estimated $200 million the company lost from the underwhelming sales of Marvel’s Guardians of the Galaxy and the live-service game Marvel’s Avengers. Another example of a poorly received live-service title is Square’s Babylon’s Fall that only had one Steam player on May 3, just two months after launch. So while games as a service may be incredibly profitable, it's also a risky endeavor for companies.
Apex Legends is available on Mobile, PC, PS4, PS5, Switch, Xbox One, and Xbox Series X/S.
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Source: Dot Esports