Netflix has been watching as the biggest technology companies position themselves as the “Netflix of gaming.” In the process, they started agonizing about whether to join them. Companies like Sony, Amazon, Google, and Microsoft have all launched their video game streaming services.
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According to Netflix’s chief executive, Reed Hastings, the company has deliberated about video games for several years.
Hastings, who usually says that he prefers making as few decisions as possible, has finally decided to let Netflix get into the gaming business. To get started, the company sought the services of a former Electronic Arts executive to be in charge of its interactive team. In its recent announcement, Netflix revealed that it would soon include games in its mobile apps as part of current customer subscriptions.
However, Netflix is planning to use a different strategy. The obvious move would have been to take advantage of its streaming technology to compete with Microsoft’s xCloud and Google’s Stadia. Instead, Netflix’s strategy is similar to earlier efforts by Hollywood studios like Warner Bros and Walt Disney. The company plans to develop games based on franchises like Spider-Man, Batman, and Lord of the Rings.
The company is motivated by the fact that its fans are willing to go deeper and get involved in the amazing worlds and storylines. However, several analysts and investors are still questioning whether the company has made the right move. Instead, investors are more interested in the challenges its core business is experiencing. For example, sign-ups in North America have stopped in the last six months.
Moreover, around 430000 people canceled their Netflix subscriptions in Canada and the US. In the same period, HBO Max added around 2.4 million subscribers. Other investors believe that Netflix has reached its saturation point in its biggest markets.
Many companies are trying to lure away subscribers from Netflix. As a result, Netflix believes introducing games would help retain its 209 million subscribers. However, other analysts argue that games could act as a bright new object intended to distract investors from what is perceived to be its slowing growth.
Some industry commentators argue that Netflix should take some lessons from Disney, which failed three times while attempting to start a games division. They also claim that not many of Netflix’s properties could make a great game.
But, others are optimistic about the move. They claim that Netflix plans to focus on mobile gaming, which has lower stakes. The experts claim that Netflix could profit from developing its own games and licensing them to others. The company will also use the subscriptions model; hence won’t have to worry about ads and in-game purchases.
The entertainment industry is converging. It does not matter if you are in music, sports, games, video, or social media. You will ultimately be competing for the same entertainment money and time.