Is a $30 Subscription the new “Norm” for Cloud Gaming?

We recently wrote about how much you should pay for Cloud Gaming. While the points that we made in that article still hold true, the industry seems to be settling on a new standard. Is $30 now the accepted price for a Cloud Gaming subscription?

Cheaper Services aren’t Surviving

We started 2018 with a large number of Cloud Gaming services to choose from. Quite a few were available for less than $20 per month. As the year has progressed, we have seen many of these cheaper services slip away.

Simplay recently announced that they are ending their direct-to-consumer service that cost $19.99 per month. Instead they are transitioning to a direct-to-business model that they hope will be more sustainable.

We wrote quite a bit about Snoost earlier in the year. Their servers were powerful, and their unlimited $9.99 plan was very popular. Back in March, Snoost abruptly ended the alpha version of their service and shut down their servers. They promised that they would be back after tweaking their product. It’s been almost 5 months since they made that announcement. Nothing has been heard from their team, and they are not responding to emails or messages. We don’t officially know that they are gone for good, but things aren’t looking promising.

There is one remaining Cloud Gaming service that charges less than $30 per month. Vortex is popular for their $9.99 monthly pricing, but falls a bit short when it comes to performance. So while they are surviving with sub-$30 pricing, they appear to be the exception rather than the norm.

Thriving Services offer $30 Plans

While cheaper services are declining, the services that are doing well are offering great value in the $30 range. When the year began, Shadow charged $50 for their month-to-month service. They recently adjusted their pricing so that now, all users pay only $34 per month for unlimited Gaming.

In similar fashion, LiquidSky recently updated their pricing so that their popular Prestige plan is now $29.99 per month. And not to be left out, Paperspace just updated their pricing. We found that under their new pricing structure, 30 hours of Gaming would come to about $33 per month. I think that we are noticing a trend.

Why is $30 the right price?

Cloud Gaming companies are doing a bit of a juggling act when it comes to managing expenses vs demand. Out of all the industries that exist today, Cloud Gaming companies have some of the highest reoccurring maintenance expenses. They either need to pay rental fees for their network, or they need to maintain expensive server equipment. They are working a bit against the grain in a world where consumers expect digital services to be free.

All you need to do is take a look at the comments on our YouTube Channel to see that Gamers are struggling with the idea of paying for a Cloud Gaming subscription. It’s not that Gamers are necessarily cheap, it’s that other forms of digital entertainment use different types of monetization. We have become accustomed to optional in-app purchases for content that we want to support. Various App Stores have also acclimated us to free-trials and tests. The Cloud Gaming demographic is largely made up of 18-25 year old’s. They may not be as comfortable with the monthly subscription model.

It would be fair to say that Cloud Gaming services have their work cut out for them. As we noted in our recent article about free Cloud Gaming, these services can’t exist on in-app purchases or ad-supported systems. Their costs are too high for these unreliable forms of monetization. So the subscription system is an absolute necessity. But they need to face the reality that for now, they may not have the number of subscribers that they want. When a service is able to spread out their expenses over a large number of users, they can cut down their price per user. That is why Vortex is thriving for now. They have a large user base, and they are able to keep things going this way.

For everyone else, monthly pricing in the $30 range appears to be getting the job done. This has been enough for them to cover their operating expenses and continued development.

Lower pricing is up to you

So here’s the funny thing. Your support of a Cloud Gaming service is a step towards lowering their pricing. If a Cloud Gaming service can gain enough subscribers, then they would technically be able to offer cheaper plans. Here’s how the math works. Let’s go over a theoretic situation:

$5000 monthly expense / 1000 users = $5 per user
$5000 monthly expense / 3000 users = $1.60 per user

As you can see, dividing up expenses over a great user-base costs less money per user. Now in reality, it’s not quite that black & white. There are other factors that weigh in, but you can see that the possibility exists. So here’s the bottom line: Pick a Cloud Gaming service and stick with them. Tell all your friends about them and promote them on your social media. Each new person that joins your chosen Cloud Gaming service adds to the potential for cheaper pricing.

For now $30 seems to be the sweet spot for Cloud Gaming services. There are enough people that are willing to pay that price to keep things going. If you do happen to find a cheaper option, it is even more important to promote them. Their survival depends on gaining huge amounts of users. So if you like them, then do what you can to help them.

Also published on Medium.

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