Streaming: Netflix wants to be your arcade, too
Netflix is looking in new directions to make a post-pandemic splash, said Sarah Needleman and Joe Flint in The Wall Street Journal. One potential avenue for the streaming giant is gaming. Last week the company hired former Facebook executive Mike Verdu, a veteran of Electronic Arts and Zynga who had been “responsible for bringing games and other content to Facebook’s Oculus-branded virtual-reality headsets.” Netflix’s video-gaming strategy is still a work in progress, but the company’s immediate focus is on designing mobile games rather than games that can be streamed through Netflix’s TV app, which would require “a game controller that can interact with all the major TV brands and connect to the internet.” But whether for TV or mobile games, Netflix does already have plenty of popular shows it can tap for storylines and characters.
With 208 million subscribers worldwide, Netflix is still “the king of streaming,” said Anna Nicolaou in the Financial Times, but it’s on the defensive. It added fewer than 4 million subscribers in the first quarter, after averaging nearly 10 million per quarter in 2020. And it has begun “operating like an incumbent, wringing more money from customers,” while rivals like Disney, HBO Max, and ViacomCBS are adopting strategies “resembling startups, prioritizing growth.” Still, for all the money those companies have poured into their services, “none has managed to persuade the masses that they no longer need Netflix,” said Tara Lachapelle in Bloomberg.com. “Early indications are that Disney+ may be losing steam” after all its “superfans” signed up. Apple’s streaming service, Apple TV+, is “light on content,” and Viacom’s Paramount+ is already “at risk of becoming a footnote in the streaming story.”
Arguably Netflix’s biggest threat is “subscription fatigue,” said Nick Statt in Protocol.com. That’s why gaming makes sense. “Fortnite, Roblox, and the scores of mobile juggernauts figured out that the best way to keep people coming back and spending money is to create engaging social spaces and layer digital economies on top.” Netflix has already proved itself to be a great home for creators, offering filmmakers “more freedom and resources with fewer strings attached compared with traditional studios.” Hopefully, Netflix knows what it is getting into, though, said Max Cherney in Barron’s.com. There are “technical challenges” around innovative game development, and well-entrenched competition. Sony now “has a cloudstreaming service that runs PlayStation games.” And Microsoft recently “doubled down on its strategy to make its Xbox catalog available on any device.” Google Stadia, launched in 2019 to compete with those two, has “struggled from the start.” Netflix should be careful not to bite off more than it can chew.