Netflix holds the biggest share of the OTT industry and with the rising competition, they are looking to enter the gaming industry.
While Netflix’s rivals like Prime Video and HBO Max’s Warner Media focus on studio acquisitions and consolidation, the streaming giant is prioritizing investment in games over snapping up studio IP.
Even though this strategy is refreshing and way different from buying distressed movie studios. But it does pose one important question: will it work?
The California-based startup shared the details about its new strategy in its financial report for the second quarter to its shareholders.
The company cited the recent mergers between Warner Media and Discovery and the other acquisitions, in the last decade, between media properties, for example, Disney and Fox or Viacom and CBS.
The company then said while they don’t believe in this consolidation nor has it affected our growth much, if at all.
According to Netflix, they want to be more like social apps than other streaming services. They say that their main competitor in the industry is itself.
Put another way, unlike other studios, Netflix isn’t looking to buy other studios. Rather, they are focusing on continuing to make themselves better.
The company wrote in its letter for shareholders: “While we are continually evaluating opportunities, we don’t view any assets as ‘must-have’ and we haven’t yet found any large-scale ones to be sufficiently compelling to act upon.”
“In the race to entertain consumers around the world, we continue to compete for screen time with a broad set of firms like YouTube, Epic Games, and TikTok (to name just a few). But we are mostly competing with ourselves to improve our service as fast as we can.”
Initially, Netflix will focus on mobile gaming and its subscribers will get free access to games. To give us a little hint, the company points to interactive TV such as Black Mirror Bandersnatch as well as actual games like Stranger Things.
Initially, a report by Bloomberg indicated that it will be similar to Xbox Cloud or Stadia where the video is streamed to the player and the game runs on a remote server.
Netflix has shared about the upcoming gaming service:
“We’re also in the early stages of further expanding into games, building on our earlier efforts around interactivity (eg, Black Mirror Bandersnatch) and our Stranger Things games. We view gaming as another new content category for us, similar to our expansion into original films, animation, and unscripted TV.”
“Games will be included in members’ Netflix subscription at no additional cost similar to films and series. Initially, we’ll be primarily focused on games for mobile devices. We’re excited as ever about our movies and TV series offering and we expect a long runway of increasing investment and growth across all of our existing content categories, but since we are nearly a decade into our push into original programming, we think the time is right to learn more about how our members value games.”
While speaking about the company’s strategy moving forward, Greg Peters, Netflix COO, and chief product officer said that the company views gaming as “an extension of the core entertainment offering that we’ve been focused on for the last 20 years.”
Furthermore, they plan to develop games for mobile-first and later follow other formats.
Peters said, “Just as we’ve continuously expanded our offering by adding new genres, unscripted, film, local-language programming, animation, on and on, we think we have an opportunity to add games to that offering and deliver more entertainment value to our members.”
He added that the company plans to start small into the gaming space which would be a “multi-year effort.”