"Develop and Release Games Slowly, Like a TV Show" — What Would That Actually Mean?

In one sentence: it means paying forever.

Phil Spencer, the head of Microsoft's Xbox division, has lately been wondering whether video games could work the way Netflix or HBO does. "It means you don't have to launch a whole game within a month — you can develop and release it slowly, like a TV show." Spencer said this in an interview with The Guardian.

What Spencer describes is a possible future shape for PC and console games. Like a TV series, a game might put out one chapter of its story a month; a few months later it formally ends, and players wait for the next "season" the way they wait for a new season of a show. "TV is extremely good at telling stories right now... I want the people making games in this industry to think that way too."

Some people were clearly alarmed. In the comments under the Guardian piece, one reader wrote: "Once again, businessmen have ruined a beautiful medium." Calm down, though, and you can see that Spencer is only following a trend that has swept the games industry over the past few years. The industry calls it Games as a Service — the game treated not as a finished object but as an ongoing service.

It is one of the hottest terms in PC and console gaming right now. Two weeks ago, when EA reported its earnings, CEO Andrew Wilson put part of the company's rising performance down to its success with games as a service. And at the Game Developers Conference in March, Donald Mustard, the new creative director at Epic Games — makers of the Unreal Engine — said: "The company is currently transforming, and we want to put more focus on games as a service."

What does games as a service actually mean? It looks like a more upmarket kind of online game: multiplayer modes and online combat are the big selling points, and long-term operation runs on in-game purchases and downloadable content (DLC).

The team shooter Overwatch is a typical case. It includes matches against AI and against other players, and in some modes you can even adjust the settings and change the rules — more flexibility than the average online game. It makes money by combining a single-player-style one-time purchase with the micro-transactions common to online games: players don't have to pay extra to reach later content updates, but they can buy loot boxes with cash.

For other games, free or paid DLC has become the key to sustaining the service and keeping the game fresh. It might be another map, or new missions and story expansions; how much of it there is depends on what the developers or the players need. Purely single-player games often get just one piece of DLC — The Last of Us had "Left Behind," which filled out the story — while games with a multiplayer mode may get as many as four or five, varying the mission lineup, as in the Call of Duty series.

Neither DLC nor in-game purchases is new to players. Both were in games long before anyone coined the phrase "games as a service."

Sega's Dreamcast, released in 1998, was the first console with built-in network capability, and it pioneered DLC. Microsoft's Xbox carried the idea further: games like Splinter Cell and Halo 2 could download extra content from Xbox Live. That DLC made old games feel fresh again and kept players interested.

At first most of it was free, and it was only icing on the cake. But as internet speeds rose and console memory grew, downloading digital content got easier and easier, and paid DLC on Xbox Live and the PS Store went from an Easter egg to the norm. The prices happened to sit in a range where you didn't feel you were bleeding money.

Plenty of games went on to release two or more pieces of DLC, some as late as a year after launch, and the season pass was born alongside them, for players willing to pay once up front for everything still to come. It stood for a very blunt expectation publishers had of players: console and PC games are mostly a one-time purchase, but we want you to keep spending money and keep putting time into the game.

The biggest motive behind DLC's evolution is, naturally, the crisis PC and console publishers now face. Everything is getting more expensive: as Epic Games founder Tim Sweeney once noted, the average budget for a AAA game built for this generation of consoles is three times that of the last generation.

Bigger teams and higher-fidelity graphics have pushed development costs up, and the cost of maintaining networks and servers has been quietly rising too — it has even outpaced the growth rate of game revenue. To make up for the profit all this eats away, publishers need something beyond DLC: a way to stretch a game's earnings out as long as possible. In short, to get people spending more time and more money on one game over the long run.

That is how the games industry — the PC and console business above all — drifted from selling games outright to selling players a long-term service. A game's release used to mark the end of a project, small later patches aside. Now it marks the beginning of the service.

Publishers run the servers that make multiplayer games possible, build online combat for players and set up game communities, and pair all that with a steady flow of new DLC. When everyone around them is spending, players find they can't resist buying the expansion too, because most of their online friends have probably already moved on to the new maps and missions. That is the point of building a community: once dealing with other people is part of the game, social pressure works on a single player far harder than a single-player game ever could.

The argument over whether DLC is simply a cash grab has never stopped, and the most famous case may be Mass Effect 3. In February 2012, the BioWare studio and its parent company EA announced that a paid DLC pack would go on sale the same day as Mass Effect 3 itself. Players who bought the pricier collector's edition got it free, but an ordinary player who wanted the full story of one important character had to pay US$10 more.

"This is simply outrageous!" loyal fans of the series said. If the extra content was already finished on the day the game shipped, and it mattered that much to the story, why wasn't it in the full game instead of being charged for again? "This is plainly cutting a piece out of the game and selling it twice."

BioWare had in fact done the same thing two years earlier with Mass Effect 2, except that the DLC released alongside that game was entirely free. That made people all the angrier at this "money-grubbing" move. Fans wrote to BioWare on their own initiative, attaching their playtime across the series, arguing that the decision would let the community down and do serious damage to the studio's reputation.

EA still got the return it wanted. The early boycott did not stop ME3 from bringing EA US$200 million in the fourth quarter that year, and as of this year it has sold 6 million copies. In choosing to charge extra on launch day even at the cost of public abuse, EA had clearly weighed the loss from the potential customers it would drive away against the revenue paid content would bring — and picked the latter.

Now that games as a service has spread, it seems to have made DLC and in-game purchases a little easier to swallow: "extra content" has become "maintenance and updates," and players may be more willing to pay again and again to keep the game, and their place in its community, going.

Even "paying forever" has a logic to it. From the maker's side: we have already put this much work into finishing the game, and we still have to keep the online functions running every day, so with everything already in place, why not build a few small expansions that make money and hold on to players? And as Ubisoft pointed out on a recent earnings call, maintaining and updating old games for years means it no longer depends so heavily on shipping new ones.

From the player's side: having already paid a lot for the game, paying a little more for more missions seems acceptable too — unless you have lost interest in the game completely and would rather spend the money on a new one.

There are plenty of reasons to lose interest. In games driven by narrative and plot, someone who knows the story inside out and has collected every trophy can walk away to the next game without a backward glance; others are pulled toward something else the moment they finish. In an era of headlong growth in the games industry, people can always find a new favorite easily, and once livestreaming sites took off, players no longer had to rely on vague written reviews — they could watch the game being played and judge for themselves whether a piece of DLC was worth buying.

Even so, player numbers still fall with each new piece of DLC. Those who pay find the online modes getting quieter and quieter, and their companions gathering in other communities to talk about the new releases. And however much extra content comes out, the day arrives when a game stops being updated. Run games as a service well and you really can lengthen a game's life, but it still dies in the end.

The whole games industry, though, has already changed as games as a service has spread.

There is only so much profit in AAA games devoted to narrative and finely made plots, and the so-called "core gamers" who love them are no longer the group publishers are fighting for. What they care about most is the kind of product that makes money over years, and for the foreseeable future they will put more of their development effort into it.

One telling sign: last year's Game of the Year at the Game Awards went to Overwatch, not to Uncharted 4, which catered to traditional console fans.

Games like this do not actually have that good a reputation, but they have done the job asked of them. Heavily hyped online blockbusters such as The Division, Destiny and Star Wars Battlefront all have thin or nonexistent single-player storylines, plus one round of paid content after another — and at their peak they still had tens of millions of people online at once. Micro-transactions, meanwhile, easily satisfy what a game company needs from its balance sheet: 25 million registered users opening loot boxes in Overwatch gave Blizzard the best financial year in its history, with 2016 revenue among the top three in the industry.

Phil Spencer, for his part, has begun to worry that people will abuse DLC and in-game purchases and drag the playing experience down — that games will not be built around "service" and the player's experience at all, but will simply have money-grabbing purchases embedded in them.

There is another risk: players hooked on old games for years may leave companies content to coast, mining old IP and shipping sequel after sequel rather than gambling on a new one. Large-scale multiplayer online games are a privilege of big companies; only the major publishers have the ability and the resources to maintain networks and servers that can serve tens of millions of users, and small studios and independent developers may be shut out.

As for the narrative-driven AAA single-player games everyone once loved — are they really fading? By the numbers, yes. Spencer's observation: "You'll still see them putting out games like Breath of the Wild and Horizon: Zero Dawn, and doing well with them, but they don't have the influence they used to, because the big service-based titles have already captured a bigger audience. Apart from Sony, which is still making a lot of games like this, very few other teams still do."

The most recent example is probably Square Enix, which has just announced it is pulling all its investment out of IO Interactive — the team behind the once-celebrated Hitman series. You can imagine that in an age of multiplayer online play, human stories about a lone assassin carrying out a hit will not cause the stir they once did.

Old-fashioned, finely made single-player games are still something we need, no question. Players' anticipation for The Last of Us Part II proves that people are still willing to lose themselves alone in a story. But a game with a complete story, released all at once, may become a rare thing in future.

Perhaps the arrangement Spencer describes — selling games the way you air a TV show — will soon be the mainstream, the way Telltale Games has already done it. Timed to the broadcasts of Game of Thrones and The Walking Dead, the company sold its games one chapter at a time, like episodes of a series.

It did not provoke much of a backlash from players, because you knew it all belonged to the "same season" — part of one complete story.

Cover image from Destiny and The Division.