Netflix is facing a formidable challenge as it expands into video games to keep the attention of customers in the increasingly competitive world of streaming television. The streaming television leader offered details of its plans to move into games in its latest update confirming cooling growth even as the Silicon Valley giant spins off hit shows. Analysts said the Netflix move is not aimed at disrupting the expanding gaming market but keeping its own viewers interested by offering new kinds of content.
Why Netflix is going into games
CEO Reed Hastings said the games business will be a good complement to the popular Netflix TV shows and films available for streaming. He said he thinks he can add to the experience of playing games by adding to the narrative and the game world rather than substitute for what players already know. The games will run on a Netflix-run platform that lets viewers play, pause, watch a clip or pick up where they left off watching a program or movie. Netflix plans to be a bit more selective in choosing games from developers and games will be available on both PCs and games consoles. In a document detailing the move, Netflix said it is not planning to invest in making games and will allow game creators to retain more rights.
How Netflix is going to compete in the game market
The company will feature a "popular game" button that people who subscribe to the service can press to play a series of minigames featuring characters from the hit TV series "Stranger Things." If that doesn't entice you, you can also get your daily dose of online gaming by playing Marvel vs. Capcom. Netflix will charge a monthly fee for the game service. The service comes with what Netflix is calling its "Netflix Game Mode" that helps maintain a smooth experience for its users. It delivers the game's sound and visual quality as it is being played, Netflix said, removing one of the biggest hurdles for streaming TV customers. What does that mean for the gaming market? "Not yet known," Netflix spokesman Jonathan Friedland said.
What Netflix has planned for the future
Netflix has one of the biggest libraries of original TV shows and movies on its platform. In its latest update, the streaming video service said it will expand its original programming, including the popular reboot of the original Archie comics, to its gaming portfolio. The company said it will develop original games that will be available on its service in 2018. The focus will be on challenging the market by creating games based on top Hollywood films and TV shows. "Video games have a rich heritage and tremendous popularity globally. They are one of the most popular forms of entertainment around the world," Netflix said in its earnings report. Netflix also said its customer base of global customers increased to over 106 million as it also operates in over 50 countries.
A new video game series
Netflix plans to create an original series centered on the most famous video game of all time: Mario. An unnamed company has teamed up with the company and is developing a series based on the popular video game that sold more than 130 million copies, making it the most successful video game franchise of all time. Games investors and analysts were looking for details on new content from Netflix and got them. The gaming plans are part of a growth strategy as Netflix said it will unveil 700 new shows this year alone. It plans to spend more than $6 billion on content next year. The company's announcement of the Netflix for games plan was a pleasant surprise, even as the stock is down more than 20% this year and the company loses subscribers.
Netflix has been surrounded by the "Netflixification" of the TV industry, but it remains the only one of the so-called "Big 4" US cable companies that is not making a play for video game streaming. As a result, it has a unique position to offer video game viewing as well as home entertainment on a TV that may be nearing its end of life. But Netflix will need to figure out how to get into the video game market in a way that doesn't upset the status quo for people who want to play a variety of games for a living, not to just play around. Without the gamer's help, it will be hard to catch up to the user base Disney, Microsoft, Sony, and other large game studios are assembling to form a critical mass of players. Ultimately, it may be best for Netflix to not try to play video games at all.