Netflix has elaborated on its planned expansion into the world of video games, following a Bloomberg report last week.
In its Q2 2021 earnings report, the streamer said it’s in “the early stages of further expanding into games, building on our earlier efforts around interactivity” like the interactive film Black Mirror: Bandersnatch and licensed titles based on its Stranger Things and Dark Crystal properties.
However, what differentiates Netflix’s upcoming venture into games is that these titles will be included in a user’s subscription at no additional cost. Further, Netflix says it will be “primarily focused on games for mobile devices” initially, although it didn’t clarify how these games might be delivered. While many games can be purchased and downloaded on iOS and Android, companies like Xbox have been leveraging cloud technology to stream high-quality titles to smartphones and tablets.
It’s not surprising that Netflix would want in on video games. Last year alone, the global games industry brought in nearly $178 billion USD (around $226 billion CAD) in revenue, according to analytics firm Newzoo. Mobile, specifically, accounted for over $80 billion USD (about $101 billion CAD) of this sum, per App Annie.
Netflix is following the likes of Amazon and Google as major tech companies that have gotten into game development, although those efforts have so far suffered major setbacks. But Netflix’s strategy appears to be to use games as a way to promote existing original video content in a broader multimedia strategy, which is completely different from what Amazon and Google have been doing.
We’ve already seen a major example of this working in the form of Netflix’s The Witcher series. Polish game maker CD Projekt’s existing Witcher series helped make author Andrzej Sapkowski’s fantasy novel property more well-known in the pop-culture sphere. This, in turn, helped Netflix’s The Witcher become, at the time, the streamer’s most-watched series. (It’s since been dethroned by Shonda Rhimes’ Bridgerton).
CD Projekt’s The Witcher 3 also saw a massive spike in players around the time that Netflix’s show debuted, even though the game had been around for four years at that point. Seeing this cross-promotional value, Netflix and CD Projekt officially partnered earlier this month on a ‘WitcherCon’ to celebrate both the games and the series.
Further, Netflix recently hired Mike Verdu, a former executive at Facebook’s Oculus and Electronic Arts, to head its gaming efforts. It’s also worth noting that Netflix CFO Spencer Neumann previously filled that same position at video game giant Electronic Arts.
Going back to Netflix’s Q2 earnings, the company reported 1.5 million new subscribers, marking a significant slowdown in growth from the pandemic-fueled year-over-year period. Specifically, the streamer notes that it had a net loss of 430,000 paid streaming customers in its key U.S./Canada region.
Given all of that, the company is likely looking to gaming as a major way to grow its subscriber base and stand out more in the saturated streaming service space. For now, Netflix hasn’t said when the first of its games will release, although Bloomberg‘s recent report pointed to a launch sometime “in the next year.”