Circana: Growth of US video game subscription spending stalled as acquiring new users gets harder

On June 7, Circana executive director Mat Piscatella shared one specific stat from the company’s Games Market Dynamics report. In April 2023, game subscription spending in the US was only 2% higher than in the same period last year.

“Finding new subscribers beyond the console ownership base has proven very difficult thus far,” Piscatella noted. He also added that, “on the other hand, the big new premium releases in 2023 have done exceptionally well in good ol’ fashioned sales, particularly in digital.”

Growth of video game subscription spending has stalled. According to Circana’s Games Market Dynamics reporting, April ’23 sub spending in the US was only 2% higher than April ’22. Finding new subscribers beyond the console ownership base has proven very difficult thus far.

— Mat Piscatella (@MatPiscatella) June 7, 2023

The issue with attracting new subscribers is clear when looking at the two major services in the market, Microsoft’s Game Pass and Sony’s PlayStation Plus:

• In its latest business briefing, Sony boasted that 8 million (17%) of the total user base are subscribed to the Premium tier, and 6.1 million (13%) use PS+ Extra;
• According to the company’s report for FY22 ended March 31, the number of PS Plus subscribers was 47.4 million — zero growth compared to the end of the fourth quarter of FY21 (March 31, 2022);

• In fact, this is even a slight decrease from 47.6 million subscribers at the end of FY20 (March 31, 2021);
• Overall, the number of PS Plus subscribers hasn’t grown rapidly and has remained pretty static since June 2020, when it crossed the 45 million mark (via Statista);
• As for Game Pass, the service surpassed 25 million subscribers in January 2022, but Microsoft hasn’t updated the data ever since;
• According to Phil Spencer, the company doesn’t expect Game Pass to become its main source of income and is fine if the service “will stay in that 10-15% of our overall revenue, and it’s profitable for us”;
• Other than that, Microsoft prefers to only share vague stats like that 159% growth in PC Game Pass subscriptions, which sounds fancy but doesn’t say much about the service’s actual state;
• However, in its response to the UK’s Competition and Markets Authority from October 2022, Sony claimed that “Game Pass has 29 million subscribers […] and is expected to grow substantially in the future.”

All this data goes in line with Circana’s findings. The growth slowdown is inevitable, but the more important issue is ‌how profitable services like PS Plus and Game Pass could remain without attracting new subscribers.