Netflix is one of the most popular streaming services in the world, and it’s trying to keep up with Amazon and Hulu by investing in original content. The company has already secured a number of high-profile deals for its upcoming slate, but it may be losing ground to its competitors.
Netflix’s Videogame Gambit Is Taking Shape as Streaming Competition Grows. The wsj degrees that pay you back is a new way for people to earn money from their college education.
Reed Hastings, co-founder of Netflix Inc. NFLX -0.91 percent, has often said that videogames are the streaming company’s greatest competition for consumers.
He now wants Netflix to develop its own videogames, and the firm has hired an industry veteran to lead the charge.
The decision reflects Netflix’s aim to attract new consumers and retain them on its platform for longer periods of time, and it comes as the streaming industry faces its first major difficulties. New entrants such as Walt Disney Co. DIS 0.50 percent’s Disney+ and WarnerMedia’s HBO Max are making gains, while deep-pocketed competitors such as Apple Inc. AAPL -0.45 percent and Amazon.com Inc. AMZN -1.37 percent are also putting money into content.
With more than 200 million members worldwide, Netflix is the most popular streaming service, but its growth has slowed this year as pandemic-related shutdowns come to an end. Investors have been waiting to see whether Netflix would diversify its income streams beyond subscribers in order to fund its growing content expenditure.
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Videogames may be a viable option. According to Newzoo BV, global consumer expenditure on gaming software is expected to hit $175.8 billion this year and surpass $200 billion by 2023. Mobile games, on which Netflix is anticipated to concentrate, are projected to account for approximately half of this year’s revenue.
Analysts warn that success is far from certain, since bigger incumbents have failed in mobile gaming in the past, and it may be difficult to discover material that lends itself to creating a videogame.
According to individuals acquainted with Netflix’s thinking, the company’s videogaming strategy is still in the works. According to these sources, the initial emphasis will be on developing mobile games, which will not contain advertising, as is the case with Netflix’s entertainment division.
According to one of the sources, Netflix is going to make the videogames accessible for free via its app. Users will be able to download such games as well, according to the firm.
According to Benchmark analyst Mike Hickey, “they’ll definitely reduce their turnover.” “You can binge-watch a TV show in a day, but you can play a game for months or even years.”
Mike Verdu, who was last seen in 2015, has been recruited as Netflix’s vice president of game development.
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This Monday, the firm announced the appointment of Mike Verdu, a former executive at Facebook Inc. FB -0.91 percent, as vice president of game development. Mr. Verdu joined Facebook in May 2019 and was in charge of delivering games and other content to Facebook’s Oculus virtual reality devices.
Mr. Verdu, who previously worked at Electronic Arts Inc., was hired initially by Bloomberg. Zynga Inc. ZNGA -2.37 percent and Electronic Arts Inc. EA -0.32 percent
Mr. Verdu will work at Netflix alongside other executives with game-industry expertise, such as board member Ann Mather, who spent more than 15 years as a director for Glu Mobile, the developer of “Kim Kardashian: Hollywood,” which was recently purchased by Electronic Arts.
Jessica Neal was the chief people officer of mobile game firm Scopely Inc. before being appointed Netflix’s talent head in 2017. Spencer Neumann, Netflix’s finance head, was recruited from Activision Blizzard Inc., ATVI -1.78 percent, one of the world’s biggest gaming firms, in 2019. Netflix is being sued by Activision Blizzard over the situation. On Thursday, Netflix refused to comment on the complaint.
Netflix has been expressing an increased interest in the gaming sector. Shonda Rhimes, the producer of “Bridgerton,” has just signed a contract with the business that includes wording about the development of videogames based on material.
Shonda Rhimes and Netflix just announced a partnership that would take their connection beyond television and into cinema, gaming, and other industries.
Photo credit: Shutterstock/nina prommer
In April, Netflix Chief Operating Officer Greg Peters said that games would continue to be an essential element of the Netflix experience. On an earnings conference call, he stated, “We’re trying to find out what are all these various ways that we can enhance those points of connection, we can deepen that fandom.”
Netflix has had some success in mobile gaming thanks to a license agreement with BonusXP Inc. in Texas. “Stranger Things 3: The Game,” a $4.99 game based on a famous Netflix series, has racked up nearly $315,000 in consumer spending in Apple and Google app stores since its August 2019 debut, according to Sensor Tower Inc.
That game, on the other hand, isn’t available to watch online or via Netflix’s mobile app. It’s solely available for download. Netflix would require Apple’s permission to broadcast numerous games from inside its mobile app on iPhones and iPads, since it has already rejected attempts by Microsoft Corp. MSFT -0.52 percent and Facebook to go down the same route.
Developing mobile games is usually less expensive and time-consuming than developing console or PC games. They’re also slower-paced, making them simpler to broadcast over the internet with no lag. They’re intended to be played on the move, rather than on a TV screen, as their name suggests, but that seems to be changing. Microsoft recently announced that it is working with television makers to integrate its Xbox Game Pass service into sets, allowing customers to stream games without having to own a console.
Even major industry giants like Electronic Arts, Take-Two Interactive Software Inc. TTWO -2.12 percent, and Ubisoft Entertainment SA have struggled to distinguish out in this competitive environment.
Other big film and television studios have attempted to get into the gaming industry, but their attempts have failed. Disney shuttered its gaming studios a few years ago, while Viacom shuttered its studios more than a decade ago.
‘Would you want to play the game ‘Bridgerton?’
— Michael Pachter, Wedbush Securities analyst
Microsoft, Google, Facebook, and Amazon, among others, have lately developed systems that allow videogames to be streamed over the internet.
According to Sensor Tower, the top 100 grossing mobile games in the United States last year accounted for more than half of all player expenditure on such games, or approximately 64%. The fact that ten of them were based on TV programs or movies indicates that the genre is popular. Netflix may create games based on its own assets, but some experts believe the company has few that would lend itself to interactive experiences.
Wedbush Securities analyst Michael Pachter, a frequent Netflix critic, said, “Do you want to play ‘Bridgerton’ the game?” “They’re going to be a colossal failure.”
Mr. Pachter’s pessimistic attitude reflects the challenges he anticipates Netflix to encounter in persuading consumers to play games via its TV app, where the majority of customers go to watch movies and programs. Consumers would need a gaming controller that can connect to the internet and interact with all major TV brands, he added.
Netflix’s foray into gaming may, however, have some advantages. Mr. Hickey believes that striking agreements with third parties for games, similar to what Netflix did with “Stranger Things,” would relieve financial pressure on Netflix to rapidly expand its library with original material. “Headcount is the most expensive part of game development,” he added.
Sarah E. Needleman and Joe Flint may be reached at [email protected] and [email protected], respectively.
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Netflix’s Videogame Gambit is taking shape as streaming competition grows. Netflix has released a game that will allow users to play the show on their phones, tablets, and TVs. Reference: gaming articles.
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