We present a finite element based simulation and analysis method to describe the spatial extent of stimulation and the effects of electrode–tissue interactions in subretinal prostheses. In particular, we estimate the threshold stimulation current needed to depolarise and evoke action potentials in the ganglion cells to be stimulated at a particular distance from the electrode. This is achieved through the application of a threshold electric field to a spherical neuronal soma model of a retinal ganglion cell under consideration. Threshold stimulation currents and the lateral extent of the stimulation zone were computed for disc microelectrodes in subretinal stimulation mode. Recent evidence indicates a decrease in threshold charge with time following subretinal implantation. Consequently, to explain the variation in threshold stimulation currents, we propose a hypothesis based on an electrode–tissue gap. Threshold stimulation currents and impedances for different electrode–tissue gaps were computed. We validate the hypothesis with our simulation results that the changes in impedance observed with time in vivo can be mainly attributed to the varying distance of the ganglion cells from electrodes due to changes in electrode–tissue gap. Our simulation framework proposes a convenient and practical method applicable for studying different electrode geometries used for retinal stimulation.