To me if there is one industry that is a close second behind grabbing the user's attention span and engagement has to be the gaming industry. Netflix's CEO Reed Hastings mentioned that Netflix competes with the video game Fortnite more than it does with HBO!
Netflix always ready to adapt and go beyond borders has moved into the Gaming space through a licensing deal with studio BonusXP for ‘Stranger Things 3: The Game. The company will offer video games on its service within the next year and what's cool is the fact that Netflix doesn't plan on charging extra for access to the games.
It has also bought to key executives from top companies to oversee the roadmap, strategy, and development of this segment. None other than, Mike Verdu, a veteran of the gaming companies like Electronic Arts, Kabam, and Zynga, will supposedly be the vice president of game development.
Netflix is a dominant force in the streaming industry but due to not a lot of new releases on the platform owing to the covid crisis, its growth has slowed down. Its competitors such as Dinsney+Hotstar & Apple have also beefed up on new content while new entrants such as HBO Max are also grabbing headlines with major releases on their platforms.
What's next for Netflix?
Global demand for video games is on the rise is projected to be a $250B market by 2025. Netflix joining the party and moving into this space would be the next logical step for it to adapt to new revenue streams apart from its subscription business. It is another way to lure new customers and also offer something none of its direct competitors currently provides.
Netflix's gaming division is a work in progress and as per reports is foraying into the mobile gaming segment. It is an uphill battle with the video gaming space having cutthroat competition in this already crowded space.
What could be the possible outcome?
Mobile streaming is a tricky business but it is a less cash-consuming business as compared to gaming on PCs or consoles. They are less complex to develop as well as the mobile platform is easier to stream over the internet as compared to other gaming devices.
This could also in turn lower their churn rate. The logic behind the same would be that you can finish a TV show or a movie relatively soon as compared to that mobile gaming where the engagement would last for a longer time.
In April, Chief Operating Officer Greg Peters said games are “going to be an important part” of the Netflix experience going forward. “We’re trying to figure out what are all these different ways that we can increase those points of connection, we can deepen that fandom,” he said on an earnings conference call.
Remember the Netflix series that were adaptations of the popular video games: Castlevania, Dragon’s Dogma, Minecraft: Story Mode, and The Witcher?
Netflix's video game push would definitely deepen engagement, increase the platform's product service quotient and demonstrate strategic pricing power.
Let us know your thoughts on this recent Netflix content strategy?