It may not come as a surprise that Netflix is looking to expand into the gaming world, given their ubiquitous presence on smart TVs and other devices across households worldwide. What’s more, their recent loss of subscribers due to the company’s crackdown on password sharing is another reason for them to add gaming to their services.
“It’s a strategic ‘value-add’ from Netflix,” says Arian Bassari, Gaming Analyst at Futuresource. “They’re leveraging an infrastructure they already have – streaming bandwidth and server space – to facilitate cloud gaming.”
In terms of Arian’s expectations on how this will be received by consumers, once the initial beta finishes – and if they roll out the full product?
“Netflix has some hurdles to overcome to become a major gaming provider. They’re simply not known for it, and the marketing for this move into gaming has so far, been low-key. Gamers are already well-established and loyal to their various brands, and Netflix’s competitors in this space – Sony, Microsoft, Nvidia et al. – are simply better positioned to succeed. Their various cloud gaming solutions have had the benefit of decades in the industry to cultivate a following.”
The second issue the Futuresource gaming team foresee is content. Microsoft and Sony both have – or are planning to have – their own cloud gaming solutions, which will likely leverage their exclusive content to draw in consumers. What would be the benefit of them partnering with a competing service to make their titles available on Netflix?
“It would seem that Netflix would either pay these companies for the privilege of including these titles in their offering; an expensive endeavour,” says Arian. “Or, Netflix simply lacks popular and established IPs in its library and relies on it’s own 1st party content..”
Of course, Netflix is actively buying and developing studios to generate flagship content, but this also represents a risk - even successful studios struggle with new IPs.
Netflix’s current strategy of rolling out mobile-only games as a beta is wise. They’re smaller in size and require less streaming bandwidth to play, allowing Netflix to perform stress tests on their service to gauge interest before a full roll-out. Since it’s also built into the price of their subscription, this won’t upset customers too much if performance issues arise.
Equally, while mobile gaming is already massive in its current format, Gaming Analyst Maxym Dmitriyev adds, “Given that microtransactions are a core function of mobile gaming, adding shallow experiences, compared to the engagement found in console games. It would be unpalatable for Netflix to pursue similar freemium mobile experience. Users already pay for subscriptions, it would be unwise to stifle demand through more in-game purchases.”
Maxym adds, “The games Netflix have already released are somewhat in the middle of the road; not quite mobile games, not quite console games – platformer, casual games. They are safe bets to test the waters, but to make a big splash, Netflix should push for more premium, high fidelity mobile games.”
According to Maxym, the real opportunity for Netflix lies within pushing the norms of a smartphone game beyond gacha mechanics. Something that can compete with the GamePass Cloud alternative, which is already brining triple A level games to phone screens.
“There is an appetite for portable, premium gaming. Hence the proliferation of handheld gaming devices and accessories in the space already. On the receiving end, the hardware of smartphones is more than capable of accommodating premium level graphics.
While there are opportunities for Netflix to leverage consumer appetite for gaming, both Max and Arian agree that a strong marketing campaign is necessary to convince customers that the entertainment giant includes more than simply films and TV.
Latest Content & Entertainment Insights