Unveiling Netflix's Gaming Strategy

Recently, Netflix made several subtle gaming announcements during a TechCrunch talk with its gaming VP, Mike Verdu. The key highlights included the opening of a new studio, the development of dozens of games, and the exploration of a cloud gaming service. Although the collapse of Stadia may have dampened confidence in cloud gaming, Netflix's proven track record in streaming services could work in its favor. Major players like Xbox, PlayStation, and Amazon are also investing in cloud gaming, shifting consumer expectations towards seamless device transfers during gameplay. Netflix has been instrumental in driving this shift in other industries. However, streaming video games, especially AAA titles, is more complex than streaming movies or TV shows. Verdu's comments suggest that streaming will not be the primary focus of Netflix's gaming operations, at least not initially. Instead, the company is focusing on providing a range of video games as part of its subscription service, in addition to its existing library of films and series. Netflix has been expanding its gaming library since last year, with 35 games currently available to subscribers, including 25 exclusive titles. The company has a diverse range of games, from arcade and action games to puzzle titles and RPGs, featuring popular franchises like Stranger Things and SpongeBob SquarePants. With 55 games in development, including 14 from internal studios, Netflix is poised to make a significant impact in the gaming industry. The company has the resources to maintain a healthy pipeline of titles and has announced the opening of a new studio in Southern California. Netflix has also partnered with Ubisoft to bring exclusive games to its subscribers, including an Assassin's Creed title and a sequel to Valiant Hearts. The company has attracted experienced talent, such as Chacko Sonny, formerly executive producer for Overwatch, to lead its gaming efforts. However, building a gaming business on premium mobile games is a challenging task, as the mobile audience is accustomed to free games. Netflix may have an advantage since its games are automatically available to subscribers, but the company still faces the hurdle of convincing users to download and play its games. With 223 million active subscribers, Netflix has a significant user base, but only 1.7 million users have downloaded games, representing less than 1% of its total user base. The biggest barrier to entry is that Netflix's games are not integrated into the app, requiring users to download them from the App Store or Google Play. A cloud gaming service could potentially solve this issue and provide a more console-like experience. As Netflix continues to expand its gaming operations, the company may eventually bring games to other platforms, but for now, the focus remains on mobile premium titles. The success of Netflix's gaming strategy will depend on its ability to develop engaging games, build a strong gaming community, and provide a seamless user experience. With the right people, pipeline, and proposition, Netflix may be able to disrupt the gaming industry, just as it has done in the TV and film industries.