With video games into its fray, Netflix may pierce through competition

Netflix is already at the top of the line when we talk of streaming entertainment services across the globe. It enjoys a massive community of more than 200 million users, although it may seem a big number, Netflix has been underperforming by its own standards, in terms of new subscribers added to the platform during the last couple of years.

Netflix has added 4 million subscribers in the first quarter of 2021, and the forecasts for the next quarter look dismal as well. It is a telling sign of saturation hitting its current portfolio and the apt time to diversify into an entertainment domain equally good, if not better.

The future plan

To ensure the current subscribers and the new ones stay putt on the platform for as long as possible – as media streaming seems to have reached a permeation point – Netflix has its future plans made crystal clear. It intends to bring gaming to the mainstream media because according to the founder, Reed Hastings, video games stands at the biggest competitor to entertainment streaming application.

The global spending on video games is projected to hit $175.8 billion by the year end and a mind-numbing $200 billion by 2023. A perfect case for Netflix to foray into this persistently growing lucrative domain, embedding it right inside its current platform, which has a cult following of sorts. OTT giant has hired former EA, Oculus and Zynga executive Mike Verdu as the vice president of game development, to give their future plans the needed boost.

The inbound gaming section will be part of its subscription service with a separate listed genre, just like the existing streaming options for its shows, movies and documentaries. If the legitimate report by Bloomberg is considered a reference point, then the service is all set to arrive sometime next year, and the telltale signs are already visible.

Not new to gaming

Netflix is no stranger to the gaming industry or to keep it modest, let's say, to the concept of video games. It has released gaming titles like Stranger Things 3: The Game and The Dark Crystal: Age of Resistance Tactics, both based on the popular shows courtesy of game studio BonusXP from Texas.

Even before these two popular games, the first documented Netflix games were the Marco Polo, Narcos and Orange is the New Black. To keep things mellow, the streaming platform is currently working on the next-gen AAA console game as another example of cross over game development.

In a recent development Netflix struck a deal with Bridgerton producer Shonda Rhimes to expand the relationship even further. This is going to go beyond into the realm of gaming by the look of things. In April COO Greg Peters said that games are going to be an important part of the platform's experience going forward. This joins the two pieces of the puzzle, and strongly points toward existing shows and movies being given a video game avatar to further increase the fandom on both spectrums.

Expected game genres and competitors

While on the surface this whole thing might look like a next-gen gaming platform or even something close to cloud-based services like Google Stadia or Amazon Luna in the making – don't count the chickens just yet. Netflix will play it down and offer titles that are adaptation of the new or old series on the platform. In-house game development is a near impossibly, even the likes of Google have given in on it because it simply isn't feasible. Sourcing third-party studios to create games is the way to go here.

Netflix could look at something on the lines of Apple Arcade and create more lo-fi titles that are not very graphics-intensive but additive as hell. Having ambitions like creating open world games or ultra-realistic gaming titles like the ones from Rockstar Games, Electronic Arts or Ubisoft is highly unlikely.

Netflix will not be creating AAA titles (at least for starters) competing with the cloud-gaming giants like Stadia or Xbox Game Pass, core gaming consoles like PS5 or even handheld gaming consoles like the Nintendo Switch. It will further try and create an ecosystem of gaming titles that in a way resonates with the platform's other offerings.

Netflix will have games that have more arcade feel to them with the aim to keep the users engaged and prevent them from hopping over to other gaming platforms to quench their gaming thirst. Possibility of highly interactive games coming initially to the platform is likely since Netflix has experimented with interactive content before as well, and it has done fairly well.

Till date Netflix has targeted 14 interactive specials on the platform, the Black Mirror: Bandersnatch released in 2018 being the most successful. This is closely followed by the comic Unbreakable Kimmy Schmidt: Kimmy vs the Reverend's interactive special released in May, 2020.

Wrap up

Netflix will have to take a very cautious approach since gaming is a much broader domain and pitfalls are in plenty. Getting a good team of game developers and employing the right strategic moves at the apt time is of utmost importance here. Gaming is one form of entertainment that is the next gold rush and having all the plans – A, B and C, will give Netflix the strategic advantage when others follow suit.

Given the nature, this platform has operated in the past decade or so, expect a very radically different offering to what others might be presenting the users with. That's how Netflix has created a niche for itself and with the foray into gaming, we expect something similar. The blueprint for is going to have a mention of roping in the best talent in the gaming industry to drive home the advantage in a very competitive space.