With over 214 million subscribers, Netflix is the most popular streaming platform globally. The company, founded in 1997, is the leading giant in the movie streaming and production industry. It all began with the selling and renting out DVDs in the late ’90s, and then fast-forward to 2007, Netflix started offering videos to people on the internet.
Over the years, the company has gathered many awards and landed outstanding achievements. Netflix is currently the largest entertainment company by market capitalization. It ranks 124 on Fortune 500 companies and 284 on Forbes Global 2000. Besides, it has produced movies that will forever remain in people’s hearts. As of the time of writing, Red Notice, a Netflix original movie, is the most streamed in the world.
However, it seems all of these are not enough for the company. Perhaps, they are scared that they might lose relevance in the next few years, and another streaming platform will take their place. And on several occasions, Netflix has made it known to the public that they are in great competition with Fortnite and YouTube. Therefore, they deem it fit that it’s time to expand the entertainment industry by producing games.
Netflix In the Gaming Industry
Netflix is going into games production. Gaming is something they have been talking about since the beginning of this year, and the intention was made clear when they hired Mike Verdu, the former VP of Facebook Oculus, as their VP of games development in July. However, this is not their first big move. They have once worked with outside studios to create two Stranger Things game titles.
Now, they are stepping it up by having a game studio of their own and a team of game developers. Netflix acquired Night School Studio in September, and on November 2, they launched their games service for Android users. They have also hired Amir Vahimi, the former VP at Scopely and a game genius, as their VP of game studios. As of November 9, Netflix games became available globally for iOS devices. All of these happened in 2021.
The company is moving fast with its gaming ambition. At the moment, they are offering five free games to Android and iOS users. And they promised to add more as the company’s gaming section grows.
However, observing and analyzing the past events, Netflix is known for displacing big companies from top positions. They have done this several times in the movie industry. Can they do this in the gaming industry? Will they even make it in the industry?
Before I take on this question, let’s understand Netflix’s ambitions in the gaming industry.
Netflix Gaming Ambitions
From the first time Netflix hints to the public about its interest in gaming, there have been speculations. Everyone is cooking their story about the company’s intentions and how their subscribers will react to the new development. Why is Netflix investing in gaming?
Purely for growth
No company will see the chance for growth and won’t take it; Not even a company like Netflix with colossal capital and market value to diversify and test new business ideas. Gaming is the new growing entertainment industry. The industry saw a boom during the pandemic. And ever since then, the number of gamers in the world has been rapidly increasing.
The same year saw the release of two unique consoles (PS5 and Xbox series X and S) that enticed people to games. Some are meeting up to play physically, while other hardcore gamers are playing on the clouds. Meanwhile, millions of game lovers are glued to video games streaming platforms to watch their favorite gamers play and compete.
All of these prove a vast business opportunity in the gaming industry. Many other companies like Amazon and Facebook are also investing to gain a good share of the gaming profit. However, Netflix has made it known that they are strictly into it for growth and retaining their subscribers.
A Netflix audit has revealed that the company is experiencing slow growth, and they might start losing their subscribers if they don’t come up with another enticing package. Therefore, they have made their five games accessible on the platform and promised that the subscription rate would remain the same. All they want is to keep and gain more subscribers.
Retain top position in the entertainment world and compete with big streaming platforms
Netflix is going into this foray because they want to keep leading the entertainment world, and that may change if another company has game lovers. In a Netflix quarterly report released far back in 2019, the company mentioned that “Fortnite” is a more significant threat to its business than the Warner Bros HBO. It is so because the game is becoming a virtual getaway for teenagers and young people across the globe.
Likewise, YouTube is a big Netflix competitor. In October 2018, the company noticed a spike in the number of viewers when YouTube went down globally. Besides, the platform is one of the major streaming platforms for gamers. Not just YouTube or Fortnite – Roblox, with its 70 million players, could also be a threat in the future.
The world has changed, and presently, people are spending more time on their mobile phones than on TV. Therefore, any business or entertainment platform that wants to win in this generation must be built around mobile users. Although Netflix has mobile apps for Android and IOs users, they must give their subscribers a reason to use and hang out on the app. Games will make this happen.
Build games around their movies to get more subscribers
Like they have done with Stranger Things, Netflix probably wants to build more games based on their movies. By doing this, they will convert their previous subscribers to gamers. Imagine a game of Money Heist or Squid Game; you would agree that millions of people worldwide will play the game because they enjoyed the movies.
Does Netflix Have a Chance Against Highly Monetized Games?
Netflix is still in its early stages of game production. And unlike the movie, the game industry is quite different and complicated and might not work out so quickly. Amazon could testify to the difficulty in game production. Although the online marketplace is a leading tech giant, it took several failures to come up with its first video game – New World.
Presently, Netflix has five games on their app, including Stranger Things: 1984, Stranger Things 3: The Game, Shooting Hoop, Card Blast, and Teeter Up. And they are free to play for all subscribers. This is just the beginning for the streaming platform; things might change later in the future because the idea of providing free games doesn’t look realistic to some extent.
As they have no plan to monetize their games, Netflix probably wants to pay a one-time compensation to developers with fantastic video games ideas (just guessing). This could sometimes be a good deal for developers, as the game may not get enough attractions as expected.
However, it could be otherwise if the game turns out to be a big hit. Developers would prefer making a deal with another studio that will pay them as the game grows and gains more players and recognition. Therefore, they may lose good content to their competitors, continually harming the number of subscribers.
Meanwhile, from the other way round, this non-monetization model could also be why they will win in the industry. If they could come up with great deals for game developers, this model would help them attract good content. Some developers also like it when their content is not monetized because having a game with quality content, no ads, and no title purchase will attract many game players.
Moreover, Netflix has a better chance of winning if they could make games for their movies. As mentioned earlier, gamers will readily engage and talk about a Money Heist video game or Squid Game. However, it’s up to Netflix to create quality content from the movies to keep the spark going.
Also, Netflix has millions of existing subscribers as an added advantage. They have already gained people’s trust as far as entertainment is concerned. Therefore, they could be dragging the position with Fortnite and other highly monetized games with two or three-game hits.
Before they stand a chance, Netflix must give in all they have to survive the first few years in this new business. The first few years are the most difficult. They could quickly build on when the foundation is strong. After perseverance, the company needs good content.
It won’t be simple to convince people to stop playing Fortnite and Call of Duty. Players must see and confirm that the games are worth their time than the highly monetized ones. Free games may attract new subscribers, but if Netflix wants to keep their existing customers and compete in the game business, they need good content and intelligent developers.