Netflix has been synonymous with creating great content for us in the best possible formats. It was only a matter of time that the best in content creation meets the most talked about hobby and passion of people in the recent era – gaming and thus Netflix’s efforts to foray into the gaming industry is born!
Setting The Context
The first video game was created by nuclear physicist William Higinbotham in 1958. However, the focus at that point was to just garner attention. But what Mr. Higinbotham had not comprehended was the ripple effect the game would have after six decades especially during the pandemic. It would not be wrong to assume that gaming has a rich history that deserves more credit than given in the last 12 months due to the pandemic.
However, COVID-19 has bolstered the growth of the gaming industry like never before. Since the coronavirus outbreak began, consumers around the world have changed their habits accordingly in line with measures imposed in a bid to control the spread of the disease, and this has had a direct impact on media consumption on a global level. The percentage of gamers aged 55-64 grew by 32% in two years. Multiplayer games proved especially popular during COVID-19, because they made players feel less isolated and more optimistic overall. There have been numerous studies conducted to understand the usage patterns and the pandemic period from 2020 shows a sharp rise in gamers especially females. According to this article, 43% of the mobile gaming audience in India was women and across diverse age groups. From gamers to streamers to game developers and entrepreneurs, women are increasingly straddling different roles in the gaming industry.
From casual games to the recent rise of the wildly popular hyper-casual genre of games that are quick to download, easy to play, and lend themselves to being played in short sessions throughout the day, games are played by almost every demographic stratum of society. Today, the average age of a mobile gamer is 36.3 (compared with 27.7 in 2014), the gender split is 51% female, 49% male, and one-third of all gamers are between the ages of 36-50 — a far cry from the traditional stereotype of a “gamer.” With these demographic, geographic, and consumption sea-changes in the mobile ecosystem and entertainment landscape, it’s no surprise that the game space is getting increased attention and investment, not just from within the industry, but more recently from traditional financial markets and even governments. So, what all of this concludes is mobile gaming is on the rise and this growth trajectory wouldn’t see a decline anytime soon.
It’s no surprise that Netflix has decided to enter the gaming industry, though under a lot of speculation, but a deeper understanding into the subject will help us realize that Netflix is placing their bets quite high in a space that is growing at a rapid rate and is estimated to grow even further in the near future. To explain in a simplified version, Netflix is a subscription-based streaming service that allows members to watch TV shows and movies without commercials on an internet-connected device. As of January 2021 there were 4.66 billion active internet users worldwide – 59.5 percent of the global population. Of this total, 92.6 percent (4.32 billion) accessed the internet via mobile devices. So the internet is widely available for everyone to consume content on. Content consumption has gone over the top especially due to the pandemic. The blend of content creation with gaming is something that Netflix is investing in.
Netflix’s subscription has reached a saturation point and though they are innovating and trying to get different genres of content for quite a while now, the tried-and-trusted strategy is wearing out. As a brand they are keen on exploring a new genre, something, as proven above, is going to give them a wider audience base and reach. Having said this, it’s important to understand strategically how is Netflix approaching this mammoth industry. Is Netflix planning to develop games, sell gaming hardware, create gaming teams and also enter e-sports. These are some FAQ’s that will pop into our mind when we ponder on what is Netflix exactly planning. For starters to bust some over the top thoughts, no games are being created and designed by Netflix for starters. A common thought ruling everyone’s perspective is because Netflix has been dominant in the space of streaming content and content creation, it could end up becoming the Czar of the gaming Industry. But this perspective is faulty in ways more than one. If we look around at other brands who have made efforts to make a mark in the gaming industry apart from creating content Disney+, Sony among others have tried to do this for decades but have still not been successful a hundred percent.
The reality is that the investment is significant and the returns aren’t similar to the investment so the proposition is far from valuable. Hence Netflix has ventured into the gaming mission with steps like:
- Bundling games into Netflix’s main app for free. This move is primarily meant for mobile devices but there could be plans to eventually migrate to Televisions
- We should not be surprised to see some of Netflix’s own creation could have game-ified versions on the one hand and on the other they may license existing games and brands from other developers
Netflix’s ambition is to help the growth of the gaming industry by supporting game developers and gaming enthusiasts by providing them another platform for streaming. Indirectly they are using their infrastructure to optimize scale to cheaply and efficiently stream creative and interactive content to more than 200 million subscribers worldwide. Something interesting to watch out for would be the attempt to create branching narratives of its own shows on the streaming platform and mobile devices. Black Mirror: Bandersnatch is often mentioned as the progenitor of this field for Netflix — although kids-focused titles, including an adaptation of Telltale’s Minecraft: Story Mode, were earlier pioneers for this kind of interactive experience on the platform.
The disappointment that could loom over people at large is to end up seeing Netflix playing it safe with just mobile gaming aspects. The hardcore gamers would expect titles like AAA to be streamed among others but what Netflix is actually placing pursuing is much more realistic and plays more effectively to its true strengths. More than just another wealthy corporation entering the market to outspend rivals for dominance of an existing market sector, it’s far more exciting to see company enter games with the intention of bringing its significant resources to bear on trying something new — and potentially creating a whole new area of the market in the process
What To Expect in the Long Haul?
Netflix needs to start small and learn to swim in uncharted territory before it tries to do laps. There shouldn’t be any ambitions to chase Xbox Game Pass or become PlayStation Now. Netflix can rely on its biggest strength, which is audience reach and visibility. There is no doubt that the games are going to be an important form of entertainment and an important sort of modality to deepen that fan experience.
Some of the key points Netflix should bear in mind while developing the gaming branch are:
- Games should be easily accessible.
- If games are an extension of shows, then the relatability from the audience will be higher.
- Ideally for the start the games should not be monetized.
Games should complement the entertainment provided by Netflix to billions every year from its wide breadth of content offerings. Games should uniquely serve this content. The idea should be to allow consumers to engage with the product on an interactive level. The games could provide more story beats and help bridge seasons of content, reinforce characters, or underline memorable moments in the show while also providing something new.
Games should also be included right on a show’s page. There should be a way to directly play the game without any downloads and jump right in at the click of a button. This would require game streaming, but if the content has a small footprint the data consumption would be negligible. What Netflix should not do is follow Google or Amazon in gaming. The company shouldn’t open a bunch of game studios, funnel in hundreds of millions on new ambitious projects, or overcomplicate things. Both the respective brands are having a tough time surviving in the space because they planned too many things to be executed in a short span. Netflix should start small, observe the response and then plan.
Netflix should aim to create value by branching out into a new genre. To explore new space for the sake of it because everyone is interested is a sign of herd mentality. Hence only time will say if the decision to branch out and create a new space in the gaming industry will work in favor of Netflix or not. Till then Keep Netflixing!