The so-called ‘streaming wars’ may be close to entering another territory. After months of rumors, news and signings of former creatives who pointed to it, it is official. Netflix will soon introduce video games in its application.
The Los Gatos company has taken many steps during its history. It began by sending DVDs to its customers by post, then opened what would become the realm of movies and series on demand online. Then he began to make his own movies and series. And now they play video games.
But, What does the entry of Netflix respond to in an already highly competitive field? The answer might not lie in the video game industry itself, but within the home.
Some exhaustion? Netflix can’t stop growing
The news coincides with the announcement of its results for the second quarter of this 2021, which, like the previous ones, begin to show a certain slowdown in its growth.
It is true that all Netflix data must be seen by taking a look in the rearview mirror at the fabulous (for them) 2020, in which the confinement in most of the world by COVID prompted their discharges like never before.
During the last quarter, Netflix achieved $ 7.34 billion in revenue, but it did not meet expectations in terms of customers, since it was left with 1.54 million new additions, a figure below expectations and certainly very far. of the 16 million that promoted the same period last year due to the aforementioned confinement.
We believe the time is right to learn more about how our members value video games, but we are hopeful that it will become a critical part of our subscription offering.
Greg Peters, Chief Operating Officer, Netflix
It is not the first time Netflix sees some stagnation, with 209 million subscribers globally, which curiously coincides with a greater benefit as they have not been able to shoot many of their productions due to the health situation. In the second quarter of 2019, it already lost users in the United States and Canada, where it is more established and has more followers, something that also happened this quarter.
With the doubts, therefore, that this trend could spread to other regions where there are already settled other players of streaming, Netflix confirmed to investors its plan to present video games in its app, something that seemed evident after the signing a week ago of Mike Verdu, an industry veteran who has worked for companies such as Electronic Arts (EA) and Zynga.
Video games yes, but not to compete with consoles, but with Disney Plus
For now, what is known is that these video games will appear in the mobile version of your application, there will be no additional cost to your subscription, and that, effectively, they will be video games, not interactive audiovisual formats how have you tried with Bandersnatch since 2018, although an evolution of them.
Netflix formally told investors that it is in the “early stages of expansion in video games,” in the voice of its content director and co-CEO Ted Sarandos for a year.
“We see games as another new category of content for us, similar to our expansion to original films, animation, and unscripted television.”, Netflix also tells in its letter to shareholders, where they also assured that “initially, we will focus mainly on games for mobile devices”.
The movement seems evidently a way to self-exploit the rights of the brands that Netflix has created at this time as producing its own content, such as Stranger things, but also look for alternative routes to others that you have acquired, such as The witcher or Masters of the Universe. In short, take your first steps in what Disney has been doing for decades with its merchandising and its amusement parts.
But it is also that enabling these games can be a new wormhole to get what the platform needs most: retain its usersespecially the younger ones. Some independent reports show that while Netflix’s abandonment rate is among the lowest, this metric – the so-called churn rate- it was growing among American teenagers.
A bet that came from far away, but without making noise
The company itself describes its entry into games as an initial foray: “We believe that it is the right time to learn more about how our members value video games, but we are hopeful that it will become a fundamental part of our subscription offer. “said Greg Peters, the company’s chief operating officer, during the company’s earnings call.
Netflix had shown several signs of its interest in putting at least the tip of the foot in this sector. And not only with rumors, already had made first steps with contents like Stranger things for consoles and PC. The executives of the platform, starting with its CEO, Reed Hastings, have reflected for years on the fact that video games are an important source of competition for the same thing that Netflix competes in an ultimate goal: leisure time and money.
More concretely, The Information reported earlier this spring that the company was considering offering a video game cluster to its subscribers, similar to what Apple offers through its Apple Arcade service or Google with Stadia. Added to this was the hiring of Verdu, advanced by Bloomberg In the past week.
But there is another possible reading, and it is how in the end Netflix has ended up moving away from what seemed like one of its mantras: do only one thing well. For years, Netflix executives have been asked when they were going to enter the bid for live sports broadcasts – in this last call, without going any further – or if they would add advertising or extra payments for certain content within their platform . The answer has always been the same: Netflix believed – or believed – that focusing on serving TV and movies on demand and doing it with the best possible experience was at the core of its business.
An increasingly hybrid entertainment
What seems clear is that Netflix’s bet opens a new window and a possible new revenue stream that other platforms can also explore. Just as streaming platforms went from being content repositories to being generators, and as we have seen how films destined for cinema have passed directly through them, the boundaries of what can or cannot be done through them are becoming less and less defined. the same platform.
That Netflix ultimately wants to become a multi-format entertainment center it seems natural with its ultimate end: keep us hooked on the screen and make the thought of unsubscribing less and less reason.