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The days of the double -digit playing playing are over. However, there are still ways to expand the market if companies are thinking outside of traditional business models.
At Gamesbeat Summit 2025 In Los Angeles, Catalin Alexandru, Managing Director of Wedbush Securities, Michael Pachter, and Head of Market Research by Alinea Analytics, Rhys Elliott, had a lively debate about the head of the market research of Alinea Analytics. The suffering of the industry And how it could find new growth opportunities.
Pachter compared the current status of the game industry with the place where the film and television industries were in the 1960s when people could only look at programming either in cinemas or on television. Nowadays we have a wealth of options to see this content, be it through on-demand services, streaming subscriptions or YouTube.
“There are only many ways to access this type of content. And I think the game industry will be available shortly before accessing games-I think that is supported,” said Pachter. “So we are not yet in an advertising supply model that actually works for games, but I think it comes. And if that happens, you will expand the market even further.”
He told how successfully Netflix was added to the AD-supported plan, which now has 70 million subscribers worldwide. He said Microsoft should consider something similar and offer an ad version of Xbox Game Pass at a cheaper price. If the company offered an ad supported plan that cost $ 7.99 a month, he could theorize that it could attract twice as many subscribers.
Nor did he understand why Microsoft has not yet added any of his mobile games to the service. He would like to see a future in which all these forms of entertainment – games, films, television – can be found on a platform.
“But why is Candy Crush not on a game pass? Why is Diablo immortal on the game pass? Why is Call of Duty: Mobile not on a game pass? And that is because nobody thought about Microsoft about it and not because there is no original thoughts there,” said Pachter and laughed some laughter.
And if Game Pass does not go into this all-in-one future, he believes that Netflix will be.
“(Microsoft) cannot do this if the same old boys continue to run the business as they always managed. They need young, new punks who think differently, and if they think differently, they have the chance to win. And to be honest, I think that Netflix will actually win,” said Pachter.
Netflix has continuously acquired Studios and added games to his streaming service In recent yearsBut it has not yet been immersed in console and PC games. If it can add these types of games to its platform with a developer-friendly sales division model, he believes that they have a real shot to expand the market and become the next huge player.
However, the subscription business model is also not without errors. Elliott noted that in contrast to Spotify or Netflix, in which people can consume many songs and videos in a single month, most consumers can only play one or two games in the same period just because it takes time to end a game. And this does not take into account other factors such as free games that steal part of this free time.
Alexandru said that the Game Pass model was “not already proven as a silver ball because many people have huge games of games on Steam and other platforms. And due to other integrated functions such as Steam curators and friends lists, it is difficult for him to imagine that many people switch to Netflix, even if developers achieve a larger proportion of income.
“This is what you have to overcome to bring the flywheel on Netflix. And as soon as you get the flywheel on Netflix, you will only move this monopoly from A to B,” said Alexandru.
Take a look at the entire video to get more about your thoughts during the one-hour panel, including the future of live service games, creeping budgets in Triple-A and what effect this works Nintendo Switch 2 And Grand Theft Auto VI will have in the industry.
