Netflix, the company, kicked off when its founders decided to ship DVD blockbuster movies to customers. Since then, Netflix has evolved into a streaming service that lets you watch your favorite movies and shows over the Internet. Now the founders are improving their game and are starting to produce their own content.
It seems like they are ready to break new ground with a foray into video games. Indeed, Netflix made its intentions clear in a recent letter to shareholders, explaining that it is still in the early stages of expansion into games. They added that part of their long-term strategy was to learn more about their subscribers and the value of games.
If all goes well, you can expect interactive video games based on your favorite television shows. The company has already experimented with special interactive shows such as Black Mirror, Bandersnatch and You are the Wild, where viewers are empowered to make decisions that shape how the story plays out. But mature games are still in uncharted territory.
That’s what gaming is all about. This fascination is not really new here either.
The short answer is that Netflix is trying to maintain its lead in a highly competitive streaming business. The longer one is that the market has reached a tipping point. The shorter answer is also the longer one.
Indeed, while Netflix has made big gains in 2020, the total number of new subscribers it has gained this year has slowed significantly. As one article noted, it’s a far cry from the 10 million new subscribers Netflix added in the same period last year (Q2). It is a saturated industry with limited scope for expansion.
Many streaming services compete for intellectual participation, and they all license and produce a staggering amount of content.
The spectacular performance points to a dangerous trend. Subscriber growth has not been robust enough. It may be that last year was an aberration, but to follow it up with another spectacular performance is impossible. The competition is coming to Netflix.
They will not charge their subscribers for new revenue drivers such as video games. As they say, games will be included in members’ Netflix subscriptions at no extra cost, much like movies and series. At first, they want to start with mobile games, but the more they do it, the more things will become something more substantial.
New revenue drivers, especially video games, could help. It could be part of their entertainment catalog that drives subscriptions.
Netflix has admitted in the past that it does not compete with HBO, Disney, or YouTube, but rather addictive video games like Fortnite and PUBG. Netflix chief executive Reed Hastings went a step further, declaring sleep was his biggest enemy. “You know, consider it when you watch a series on Netflix and become addicted to it, you stay awake all night. It’s a very large time pool. As is the competition with sleep on the edge.
These people appreciate your attention and will do all in their power to keep you here and now.
Apart from that, the production of video games is not exactly a piece of cake. When it comes to developing addictive mobile games, you have to be willing to experiment with many ideas. The likes of PUBG and Fortnite have achieved considerable success on that front, but that won’t happen overnight. If you’re thinking of a standalone AAA title like GTA or Call of Duty, it’s likely to appear on Netflix.
Even the most popular games you see, you will find that there are hundreds of other games that have not been launched.
It is much more expensive to develop a game of any kind, and your investment goes down the drain if people don’t take it seriously. In fact, we would go so far as to say that this new gamble is actually much cheaper than the gamble Netflix took with the original series.
Still, one could argue that if Netflix had stopped gambling, it would never have succeeded in the first place. If Netflix has scope to experiment with games, it won’t be a cheap proposition. Netflix’s first foray into gaming is, you know, something.