Hatch Entertainment, a subsidiary of the Finnish Rovio (creators of Angry Birds), is testing the streaming of mobile games in the manner that Netflix does with movies or Spotify with music. The developers believe that the gaming industry is ready for monthly offers with a fixed fee, for which users get access to a large set of projects without the need for their installation. In their opinion, this is the next step in the distribution of content, which can replace the shareware free-at-first (first for free) and pay-later (pay later), which dominate the market now.
“This is a new way to play mobile games, and at the moment we do not see direct competition,” said Hatch Entertainment CEO and veteran Rovio Juhani Honkala to Reuters.
The streaming model collides with skepticism in the industry, which is currently earning money, charging fees for items or improvements in games. “New players are more likely to attract high-quality content than positioning themselves around innovative streaming technologies,” said HIS Technology analyst Jack Kent. This is evidenced by the experience of the Spotify service, which took years to convince music publishers that streaming services are more attractive than single purchases.
However, in the gaming industry, things can go faster. According to the head of Hatch Entertainment, more than 100 developers and publishers are ready to try a new business model, including SEGA, Square Enix and Bandai Namco. At the moment, the company’s platform works only on Android and is tested in 18 countries of Europe. It has already received support from the American giant Qualcomm and the world’s third-largest smartphone maker Huawei. And this is at a stage when the beta version of the application has not even exceeded 10 thousand downloads on Google Play.
“We have very strong support,” Honkala said. Rovio is increasing investment in Hatch, seeking to provide a stream of revenue after the company’s shares last month fell by 50%.
Currently, games on smartphones are dominated by a shareware distribution model, which generates revenue from purchases in the application. But the fact that it works only for high-profile products, but the life of less popular projects and small publishers is not so rosy because players prefer to stick to the names with which they are already familiar and have already invested.
In recent years, Rovio has tried to replicate the success of Angry Birds and has had problems predicting future earnings due to high spending on marketing. Hatch already offers 100 games on its platform, and in the future, there will be more, including a series of Sonic the Hedgehog, Crazy Taxi и Virtua Tennis. The service will charge 30% of the income of publishers.
The company is not ready to disclose the timing of the launch, but, according to representatives of Hatch, this may happen this year. The subscription price has not been announced yet.