Further distancing itself from the idea of ever introducing an ad-supported tier, Netflix is venturing into videogaming as a supplementary revenue stream to the successful SVoD business.
On paper at least, any move into gaming suits Netflix down to the ground, while bowing to advertisers would be a predictable move from the streaming heavyweight that would arguably detract value from its image as a premium subscription brand.
Executing a successful video game strategy is another matter entirely, which is why Netflix is seeking an executive hire to lead this expansion effort. Netflix is known for its approach of only hiring the very top crop of talent and paying handsomely too. Sources tell The Information that Netflix has approached a number of veteran game industry executives, suggesting Netflix is looking to poach a prominent name from the developer community.
This isn’t entirely uncharted territory for Netflix, however. It has dabbled in gaming with the release of Stranger Things 3 on Steam in 2019, for which it worked with games developer BonusXP, although this was a relatively low budget gaming production – more of a marketing stunt than anything serious. That raises questions about whether Netflix’s charge into videogames will continue to see it working with outside developers, or rather bring the whole operation in-house, is unclear. We suspect it will start with the former, before shifting to the latter depending on the level of success or failure.
Netflix has also built interactive features into titles such as the masterful Black Mirror: Bandersnatch that was met with mixed reviews, as well as interactive kid’s content. Developing videogames as extensions of existing titles is the easy and more obvious option for Netflix, although any serious foray into gaming will require developing standalone titles that create whole universes and deep levels of storytelling that Netflix prides its original productions on.
One option the company has discussed is offering a bundle of games similar to Apple’s online subscription offering, Apple Arcade, according to sources. Apple Arcade currently houses 180 games and costs just $4.99 a month, but can only be played on iPhone, iPad, iPod touch, Mac, and Apple TV.
While not totally new knowledge, the latest videogame rumors suggest that Netflix is preparing to make a seriously big bet on gaming in the coming years, and clues have been hiding in plain sight. Greg Peters, who holds both COO and CPO roles at Netflix, recently described the gamification of Netflix’s linear storytelling as “super interesting” and stated that Netflix would “continue working in that space for sure”.
Speaking during the company’s Q1 2021 earning’s call, Peters said, “It’s part of our licensing and merchandising effort, and we’re happy with what we’ve seen so far. And there is no doubt that games are going to be an important form of entertainment and an important sort of modality to deepen that fan experience. So we’re going to keep going, and we will continue to learn and figure it out as we go.”
Netflix’s refusal to introduce advertising has been judged by many as a missed opportunity to broaden the business model as more streaming competition arrives to take a slice of the SVoD pie. Gaming offers a new direction for Netflix, not that it needs one right now, but preparing for the future years ahead and setting trends is what Netflix is all about, while at the same time we would hardly consider Netflix a risktaker. Time to take that leap of faith.