Live-service games are a mess

This is The Stepback, a weekly newsletter breaking down one essential story from the tech world. For more on the slow-motion disaster of live-service games, follow Andrew Webster. The Stepback arrives in our subscribers’ inboxes at 8AM ET. Opt in for The Stepback here.

Two years ago, I stood at the top of the iconic red stairs in Times Square to experience the weirdest concert of my life. As glowing butterflies flitted about the various screens, a crowd steadily grew, knowing something was happening, but unsure of what. Then a countdown started, and a minute later one of the screens opened up, revealing Ice Spice and, later, Snoop Dogg, both of whom performed brief sets for the New York crowd. The really weird part is that it was a promotional event for Fortnite.

Epic Games’ battle royale is the poster child for a new type of entertainment experience: the live-service game, a never-ending treadmill of content that can become as much a habit as a game. When successful, these titles are massively lucrative and, unlike other types of games, they’re enduring. The Fortnite concert in New York showed just how culturally pervasive a live-service game can be at the very peak. It’s not every game that can manage a complete takeover of Times Square.

Plenty of other game developers and publishers have chased that same high. And while a handful have been successful, the live-service gold rush has turned into a graveyard stuffed with failures and casualties. Fortnite still reigns supreme, but much of the live-service games space is a complete mess.

Of course, live-service games failing isn’t an entirely new phenomenon. There are countless titles that were canceled over the last few years because they couldn’t drum up the user base required to keep running: Sega’s Hyenas, Ubisoft’s Hyper Scape, Amazon’s Crucible, Valve’s Artifact, and WB’s MultiVersus, just to name a few. And that’s not even counting the games that were in development but never actually launched, like live-service takes on The Last of Us and God of War from Sony. And it’s not just games that closed down; there’s a human cost as well, with underperforming titles leading to pervasive layoffs and studio closures.

It may sound like madness, but the appeal of live-service games is obvious for developers and publishers. Some of these games are free to download, others are paid, but all of them offer additional things to buy — characters, weapons, or seasonal battle passes — that aim to keep players spending. A hit live-service game is not only lucrative at launch but also a consistent form of revenue for companies.

But the same things that make these games so appealing from a business perspective are also what make the space so hard to break into. For starters, there’s player behavior. With a normal video game, players buy it, finish it, and then move on to something else. That’s not how live-service games operate; they aim to suck up as much of your time and attention as possible in order to increase the chances you’ll spend some cash.

Since time is a finite resource, only so many of these games can reasonably exist with a large player base. So once a game like Fortnite or League of Legends becomes established, it’s hard to sway players away because they’ve already spent so much time and money. You only need to look at the Steam player charts to see this concept in action: Aside from whatever the hot game of the moment is (currently Slay the Spire II), the charts are dominated by years-old titles like Apex Legends, PUBG, and Counter-Strike.

These games also cost a fortune to maintain. Once a game is out, it requires constant upkeep in form of bug fixes, content updates, and whatever else the developers can think of to keep players coming back. Many of these games operate on a seasonal structure, with major updates every few months. Hell, Fortnite completely resets itself every few years to keep things fresh. That’s a lot of work, and it doesn’t always pay off. That’s part of the reason companies are pulling the plug at the first sign that a game doesn’t have the momentum to be a hit.

As alluring as the rewards around a successful live-service game are, hopefully these shifts are a sign that companies are realizing that the costs of developing a hit don’t outweigh the very real costs of failure, which is a much more likely outcome. After all, one of the most consistently successful companies in the industry, Nintendo, has done just fine selling games the old-fashioned way and only dabbling into live-service games and subscriptions.

Fortnite is a battle royale, in which 100 players are dropped onto an island until only one remains. The live-service game space isn’t quite so cutthroat — but it’s not far off, either.