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Updated: ERA "spend on access" figures for games include microtransactions as users do not own content

Updated: ERA "spend on access" figures for games include microtransactions as users do not own content

Update - 11/3/2019: ERA has responded to PCGamesInsider.biz's requests for further clarification as to what the "spend on access" figures for games entail. 

The trade body said that they include microtransactions and in-app purchases, arguing that users do not own content in the game. 

The organisation's research consultant Luke Butler does concede that games is a complicated market to use categories such as ownership and access on, something that is doing to get more complex as time goes on. 

"Spend on access" for video and music only includes subscription services such as Spotify and Netflix, ERA tells us, making it hard it draw comparisons between those product categories and games. 

"The access number does include microtransactions and in-app purchases, which IHS Markit argue are majorly relevant to games-as-a-service' titles," Butler told PCGamesInsider.biz 

"In effect, the monetisation is enabled through access to a service-based game.

"Fortnite is a good example - a free to play, online-only game which is undeniably a service. You don’t own the content that you buy in that game – it will go away if you close your account or the game is taken offline.

"Games is not a straightforward category to compartmentalise in access/ownership. Arguably you could position IAP/microtransactions either way due to the fact they are transactions, but because of the service element we decided they should sit in access not ownership.

"The advent of cloud gaming will further muddy the issue and we are waiting to see how the transactional details roll out before making a call."

Original story - 5/3/2019: UK trade body the Entertainment Retailers Association has released its annual yearbook, claiming that subscriptions dominate the market for the first time.

This might be true for music and video - with 62.1 per cent and 62.8 per cent of revenue coming from subscriptions - but for video games it's a bit of a murkier picture.

ERA reports that a total of £3.9bn was spent on video games in total, with 58.3 per cent of that figure - £2.25bn - being 'spend on access'. Given that video game subscription services haven't really gotten off the ground in a big way yet - and certainly not to the tune of over £2bn - you're probably wondering how the trade body has come to this figure.

We've reached out to ERA for some clarification, but if the organisation is measuring 'access spending' the same way it did last year (page 26), that £2.25bn is a combination of subscriptions to online multiplayer games, microtransactions and in-app purchases.

While, yes, users are spending money to access content, putting this spending figure against music and video is hardly a fair comparison given that this is a wholly different kind of spending.

“This is a significant moment," ERA CEO Kim Bayley (pictured) said.

"For the first time since the birth of the modern entertainment business in the late 1950s, more revenue is coming from payments for access rather than purchase in all three sectors – music, video and games. New digital services have created a 'Generation Rent' for whom access models seem natural. It is nothing less than a revolution in the entertainment business.”

'Netflix-for-games' services - the industry Holy Grail seemingly - are on the way, however. Xbox already has its Game Pass subscription, which grants access to a limited selection of games. The same goes for Discord's Nitro service. However, Microsoft, EA and Google have been investing big money into streaming. We'll know more about the latter's plans at GDC in just a few weeks' time


PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site PCGamesInsider.biz. In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for GamesIndustry.biz, VGC, Games London, The Observer/Guardian and Esquire UK.