Why Are So Many Live Service Games Shutting down?

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Original Article: 2023 has only just started and it’s already seen several high-profile live service games shutting down. Within the last month alone we’ve seen the shutdown of several live service titles: Knockout City, Rumbleverse, Echoes of Mana, CrossfireX, Echo VR, and Apex Legends Mobile, alongside the upcoming Battlefield Mobile being canceled, and that’s only the more prominent of the recent closures.

It says a lot that a large company like EA, who just over a year ago said that two-thirds of their revenue came from live service games, is now shying away from the format with Battlefield Mobile. The game is based on a major IP and was never launched meaning it hasn’t had poor sales. On paper, it sounds like a pretty safe release so its cancelation implies that the publisher has become much more hesitant with the live service model.

Live service games have often been seen as one of the most lucrative markets in the industry, some even going so far as to call it the future of gaming as a whole, yet they seem to be losing their sheen with more of them shutting down. That’s what we’ll be looking at today. Have things changed for live service games?

The Rise of The Live Service Game

The idea of a live service game is pretty simple. Instead of just making a new game or making the occasional DLC, the developer makes one game that is meant to be played for years on end with constant new content updates to keep players invested.

Live service games arguably began in the mid to late 2000s with the rise of the internet. The very idea is arguably an extension of DLC and MMO expansions like what World of Warcraft was doing which were also becoming popular at the time.

It has since become the most prominent model for multiplayer-focused games. Titles like League of Legends, and Dota 2, as well as fighting games like Street Fighter V could easily bring in new characters, balances, modes, and costumes to make them feel fresh long after launch. These would show just how much revenue the business model could bring to great success.

Not only was it less resource intensive than manufacturing new games from the ground up but it was easier to monetize these tiles with in-app purchases and advertisements.

It’s for these reasons that publishers have often touted live service games as the future of the industry with major figures like EA’s Game Label President Frank Gibeau saying that the company wouldn’t greenlight a game without a service element. Even developers who’ve made fantastic single-player experiences like Toys For Bob and Vicarious Visions have now been regulated by Activision to Call of Duty support devs. That’s the power of live service games.

A lot has changed since then, however, while still big money makers’ live service games aren’t as guaranteed as they once were.

Economic Troubles

There isn’t one reason that so many live service games are shutting down. We can’t say for certain but a possible reason may be due to the economic recession that has started since the end of last year. With inflation on the rise, tech companies have had to cut back on projects and people to save money. We’ve already seen this in reports of Microsoft laying off staff and Steam having to hike up game prices. It could very well be the same with live service games.

With less income overall, many companies are being forced to tighten their belts when it comes to budgets. This leaves lives services pretty vulnerable since unlike single-player games they continuously require funding to keep their servers running and new content being made. As such, closing down a live service to shave away the costs are a possible option that many companies may be resorting to.

Too Many Live Service

On the consumer side of things, however, there’s also a pretty simple reason why these live service games are closing: there are just too many of them. Almost every couple of weeks there is news about a new live service game, some completely original, some based on licensed works. Even anime that haven’t gotten new episodes in over a decade like Fullmetal Alchemist and Gurren Lagann have returned in the form of new live service games.

With so many different games to choose from, it’s become harder for consumers to get truly invested. Live service games can be a serious commitment in terms of finances and time. For example, your average live service like Genshin Impact has daily missions, and weekly events to keep players occupied. You need to play these in order to gain gems to roll for characters whenever a new banner comes along. It can very much become part of someone’s everyday life.

The entire model is built to retain a player base and keep them entertained often for years on end, as well as also keeping them spending on in-app purchases, at least a little. With so many live service games on the market, however, there are just not enough users to go around, and many of them don’t have enough cash to sink into each new game. Inevitably, many of the less popular live service games are going to be left by the wayside.

The slew of live service shutdowns we’ve seen shows that the market has probably reached its maximum saturation and that it’s becoming harder for newcomers to enter the scene. This is especially true as longtime favorites like Genshin Impact and Fortnite have been out for multiple years at this point and players may prefer to stick with the progress they’ve made in those games rather than start from the ground up once again.

Conclusion

All this isn’t to say that there is no place for live service games in the current market, they do make up some of the most popular games out there right now. It’s important to remember that most mobile games are live services and they remain the dominant form of gaming in East Asia and Southeast Asia. Even new games like Goddess of Victory: Nikke are seeing immense success despite launching only three months ago.

What I do think it shows is that live service games are no longer the ensured money maker that they used to be and the gold rush surrounding them may be coming to an end. It’s not too different than the Military FPS boom following Call of Duty 4’s launch. The oversaturation means that live services will not guarantee profit for companies and games in the genre will have to be more innovative and creative in order to stand out from the crowd. It could actually be a good thing in the end, forcing developers to focus on more curated quality games.

This means not only looking into interesting new characters or gameplay but also a greater understanding of their target player base. How long do they spend with one game and what keeps them coming back, is it the combat, the guns, or the waifus? These will be paramount to any live service going forward even more so than they were before.

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