In 2021, Netflix subscribers were surprised to find a new offering available – a suite of mobile games, some of which were related to popular TV series like Stranger Things. Since then, they’ve gained popularity, and with over 210 million downloads, they’ve officially entered the gaming world.
In a constant bid for eyeballs and attention, the streaming service has taken its cue from other tech giants and ventured into mobile games. This is an industry with an annual growth rate of 15.1% and is estimated to reach a market size valued at $149 billion this year (2024).
Let’s take a look at how Netflix is expanding their operations to jump from your TV screens to your mobile screens.
From Video-on-Demand to Video Games
Before Netflix released mobile games, they built an audience around interactive series like Black Mirror: Bandersnatch. By putting the viewer in the driver’s seat, Netflix was able to build a case for a new arm in their empire, a gaming enterprise. In 2021, they took steps to begin building a dedicated team, starting with the onboarding of Mike Verdu. The former EA Games and Oculus Exec was brought on as the Vice President of Games.
It’s a new world for the streaming giant, with plans to integrate new content with games. Ubisoft is in the process of producing an Assassin’s Creed game to go along with a live-action series. Also in the pipeline, is the development of an AAA game PC game (i.e. an undisclosed gaming title produced by a large studio). With ambitions to ramp up their gaming sector, they’ve also brought Joseph Staten on board, widely known for contributing to the success of the game Halo.
The Netflix Gaming Strategy
Over the last few years, media subscription platforms have exploded. Consumers are spoiled for choice, and the market is increasingly saturated. Netflix, Amazon Prime Video, Apple TV+, and Disney+ are among the most popular streaming platforms, with Hulu, HBO, Paramount, and Peacock trailing behind. The proliferation of these sites translates into an all-out war for membership, viewership, and ratings.
While Netflix is comfortably leading this race, they know that constant innovation is the key to remaining at the top. Enter the gaming strategy.
In a digital economy, engagement is virtual gold. Netflix is capitalizing on this by finding new ways to engage subscribers, drive engagement, and increase their market share. Surprisingly, Netflix’s biggest competitor isn’t the several other popular streaming platforms, but rather gaming.
With a new strategic direction to lure gamers back to Netflix, they’re using the popularity of their unique series to entice gamers to play and download games. Not only will they be tying the games to the content, but in aiming to be taken seriously, they’ve bought the rights to several vintage PC games and plan to develop new games under their own IP.
Holes in the Boat
While this strategy, at first glance, seems to make sense, there are a few proverbial holes in the boat that may just lead to sunk costs. Gaming experts and enthusiasts are critical of their approach, highlighting the lack of consistency in their gaming titles.
The Netflix-associated titles are a natural fit and work excellently with the brand. Not only is there the added hype of going beyond watching a series, but now users can further immerse themselves in a particular world through games. And Netflix, which has something for everyone, could potentially bring its powerful algorithm to the gaming world, because there’s something for everyone: From a simulation of a popular reality dating show Too Hot to Handle, to a game of chess spinning off from The Queen’s Gambit.
What feels random is the inclusion of popular PC games like Townsmen, Terra Nil, and Into the Breach. They don’t have the same natural connection with the Netflix audience and don’t seem to have any brand ties. Gaming enthusiasts are also more likely to be critical of remakes of childhood games, especially when Netflix hasn’t yet developed a standalone interface. This has generated complaints about the user experience and indicates to some that the quantity of games has taken precedence over quality.
This negativity, however, is counteracted by the numbers; something Netflix is passionate about. With 326 million downloads, largely attributed to three Grand Theft Auto games, they are well on their way to establishing Netflix Games.
How Netflix Plans to Build Netflix Games
Netflix is using a mixed model to build out Netflix Games; from acquiring existing gaming titles and entire studios to creating original games to tie into the Netflix universe. To fulfill the latter, they’re also creating two entirely new studios.
This article mentioned earlier that their first foray into gaming was through interactive experiences. “Choose your own adventure” and interactive options were created for a number of titles, aimed across various age groups and genres, to test games through the TV with the remote as a controller.
They’ve also announced that they’re in the process of developing an AAA shooter game. Considered a saturated market, PC shooter games are a difficult arena to penetrate. Their competitors are leading publishers like Ubisoft and SEGA, who have struggled to gain traction with their own shooter franchises.
Overall, it seems Netflix has opted to build a solid team by hiring top talent and providing them with free creative reign to execute a vision to bring more eyes and dollars to the organization. Conspicuously absent is a solid strategy that would prevent mixed messaging and confusion between TV interactive games, mobile games, Netflix-affiliated titles, and the conversion of classic PC games into poorly executed mobile-first versions.
Without a clear strategy to guide acquisitions and development, many businesses fall into the trap of grabbing what’s available in accordance with their budget. In short, it can look opportunistic and haphazard. A good example of this is Netflix wanting to enter the concentrated shooter market, primarily because they had hired Chacko Sonny, an executive producer of Overwatch (a first-person shooter game).
Netflix Games vs Apple Arcade
Netflix isn’t the only non-gaming company in the world of subscription games. Apple Arcade has grown alongside Netflix Games, and the two enterprises share a number of similarities. But reports differ on how they measure up to each other.
Three years after they both entered the market, some experts think that Apple has pulled ahead, citing the gaming quality and expansive collection of titles. Apple has concentrated on investing in Arcade and have begun to reap the rewards, earning direct revenue from their subscription model.
Others feel Netflix Games could be a serious contender. They know the mobile gaming industry is growing and have made a strong case by offering ad-free games as part of their subscription model. This has been a key differentiating factor and contributes to a seamless, integrated entertainment experience.
By diversifying their gaming collection, some argue that the mix of original and licensed content opens up a wider audience and allows Netflix Games to cater for varying gaming preferences and genres.
Conclusion
Netflix’s entry into gaming marks a bold pivot from streaming to interactive entertainment, but its success is still uncertain. While Netflix has made strides by hiring industry veterans and acquiring studios, its game catalog lacks a coherent strategy.
The scattershot approach has resulted in a mix of well-suited titles and core games that feel out of place for the typical Netflix user, leading to a lack of clear identity in its gaming offerings. In contrast, Apple Arcade’s focused approach has established it as a more reliable, monetized platform.
To gain traction, Netflix needs to prioritize a strategic vision, refining its catalog and player experience to align with its core audience. Whether Netflix can evolve its gaming efforts into a sustainable arm of its business remains to be seen, but its future success hinges on integrating a cohesive strategy, driving engagement, and building a distinct brand within the gaming world.
