(This post is also shared on my LinkedIn… connect with me on there if you, uh, also pretend to wear a suit or whatever)
Netflix + Gaming
Earlier this week Netflix officially announced it was venturing into the gaming-sphere with the hire of Mike Verdu, a former EA and Oculus exec. I don’t know about you, but I think the general consensus was always when, not if, this would happen.
Netflix had blistering growth in 2020 with pandemic tailwinds and is close to reaching the scale, if it hasn’t already, to truly justify its massive investments in original content.
Netflix getting into gaming helps them:
Extend the life of existing IP.
Create new IP with new ways of developing/interacting characters/storylines.
Monetize user base (micro-purchases a la Fortnite).
Increase total use of the platform.
This article linked at the bottom by Matthew Ball aka “King of the Metaverse” from 2018 laid out much of the roadmap for Netflix’s future decision making. Below is a passage from it that explains the underlying reasoning for a push into gaming:
“We compete with all the activities that consumers have at their disposal in their leisure time. This includes watching content on other streaming services, linear TV, DVD or TVOD but also reading a book, surfing YouTube, playing video games, socializing on Facebook, going out to dinner with friends or enjoying a glass of wine with their partner, just to name a few. We earn a tiny fraction of consumers’ time and money, and have lots of opportunity to win more share of leisure time, if we can keep improving.”
Netflix is competing with ANY form of video consumption:
YouTube
Twitch
Video Games
TikTok / Reels
As the “Metaverse” expands, participation becomes more social. The need to share, or for a provider to have sharing capabilities, is paramount today. Netflix profiles typically exist in silos. But video games are inherently social, “active” activities instead of “passive”. The latter being what Netflix engagement has traditionally been. This provides an outlet for Netflix to further extend the ecosystem of their platform.
Just like the internet itself shifting from web2 -> web3, Netflix shifts into the next era of video with active consumption. It would be my guess that this helps position the company to withstand changing consumer habits over the next 5-10 years.
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Two thoughts that I have that could impact Netflix’s success are:
How will they make the activity social?
What product extensions can/will they introduce to make this worthwhile? Will it be VR, party games like Jackbox.tv, “Bandersnatch”-like content, or a more traditional approach to gaming?
How will hardware, or lack of it, affect Netflix?
Lack of hardware means they can’t control what device users access Netflix on. If I access through a smart TV and not a gaming console, what will/will not be available to me?
I’m probably one of the few kids my age who doesn’t have an Xbox or PS5. But it isn’t hard to see the impact and economic opportunity that gaming presents. Not to mention the future potential with the amount of kids today who have consoles and game regularly.
Read Matthew Ball’s full article HERE. It’s worth it.