What is Netflix’s game plan? | This Week In Business

On Wednesday, Netflix included some subtle gaming announcements in an on-stage TechCrunch interview with its VP of gaming, Mike Verdu. The headlines were that it was opening another new studio, developing dozens of games, and “seriously exploring cloud gaming offerings.”

Let’s address this mention of cloud gaming from the outset: Stadia’s still-very-recent collapse probably won’t boost confidence in the space, but Netflix’s track record of running a high-quality streaming service for more than a decade bodes well. company.

Xbox, PlayStation and Amazon are slowly expanding their cloud gaming services as consumer expectations shift towards the ability to transfer between devices while browsing through an entertainment product. Netflix has been instrumental in accelerating this shift in other industries.

Obviously, streaming video games — especially titles at the AAA end of the scale — is more complicated than letting people watch movies or binge-watch TV series. And while there are no details on Netflix’s cloud gaming plans at this stage, Verdu’s comments suggest that streaming won’t become the primary focus of the company’s gaming operations, as it has for TV and film.

QUOTE | “It’s an added value. We’re not asking you to subscribe as a console replacement. It’s a completely different business model. We hope that over time it becomes this very natural way to play games wherever you are.” – Verdu immediately downplayed the idea that Netflix was building a Stadia killer (if Stadia wasn’t already killed).

Instead, let’s step back from the cloud and focus on what Netflix actually does: it provides a number of video games as part of its subscription, which is another offering to the library of movies and series that the company has already built.

It’s been a year since the company first added a handful of mobile games to its subscription package, and its library is starting to look somewhat respectable.

STATE | 35 – Number of games available to subscribers, 25 of which are exclusive to Netflix, according to the company.

There’s a wide range with a mix of arcade and action games, puzzle titles, RPGs and a handful of familiar names like Stranger Things, Spongebob Squarepants, Asphalt, Into The Breach and Oxenfree. And this week, Verdu gave us a glimpse of what’s to come.

STATE | 55 – The number of titles Netflix has “in flight” (which seems to mean “either in development or very close”), including 14 from its in-house studios.

That’s nothing to be sniffed at, although Netflix isn’t the only company that offers a large number of titles in development without knowing when they’ll arrive (looking at you, Embracer Group, with your 200+ ongoing development projects).

To Netflix’s credit, it has the resources to maintain a healthy number of titles. Verdu announced the opening of a new studio in Southern California; The company’s fifth in-house developer, following the opening of a studio in Finland last month, plus the acquisitions of Night School Studio, Next Games and Boss Fight Entertainment.

Netflix’s brand power also fuels partnerships, such as its deal with Ubisoft to bring three games exclusively to subscribers, including Assassin’s Creed and the sequel to the acclaimed 2014 title Valiant Hearts.

Netflix also seems to have little trouble bringing in experienced people to lead its own efforts; the new California studio will be led by Chacko Sonny, a former executive producer for Overwatch, and Verdu himself is a former EA and Oculus executive with plenty of mobile gaming experience.

QUOTE | “You don’t get people like that coming into your organization to build the next big thing in gaming unless we feel like we’re really in it for the long haul and for the right reasons.” – Verdu pointing to Sonny’s hiring as a sign of how serious Netflix is ​​about video games.

None of this, however, diminishes the challenge Netflix faces: building a gaming business on premium-style mobile games is a tall order.

The mobile audience is used to free games. That’s why the business model dominates the industry, and why even companies like Rovio — one of the companies that proved people would buy mobile games outright — were forced to go free-to-play. Of course there are exceptions, and whether you can sustain a business on premium mobile games depends on what your success metrics are, but overall it’s incredibly difficult for mobile developers to convince people to pay even a few quid up front. on their game.

Netflix may have the advantage of automatically making these games available to subscribers, giving access to acclaimed indie hits “for free” — but Netflix isn’t the first to try. Both Apple and Google have tried to bundle premium games into their respective subscription services, Apple Arcade and Google Play Pass. But four years on, it’s hard to tell if they were successful.

Many factors explain this low number of players. The company is only a year into its gaming business, and given the lack of marketing about its offering, it’s no surprise that awareness will be low.

Mileage also varies depending on how well the games section is displayed in the Netflix app; while my phone happily lists “Games” as one of the five essentials at the bottom of the app’s home screen, my tablet seems blissfully unaware of games until I search for them.

Content is another factor. While the 25 games may be exclusive, it would be hard to argue that Netflix has its own must-have title. But with 55 games in the works, it’s likely that at least one of them will turn around.

Perhaps the biggest hurdle is that Netflix games aren’t actually in the app. Instead, the games section lists links that take you to the App Store or Google Play, where subscribers can download the title for free. It might not seem like it, but it’s another friction to get players into Netflix’s game library. Perhaps this is something that a cloud gaming service could solve, as well as opening up the Netflix app to a more console experience (besides console games already exist on smart devices like Call of Duty Mobile, Apex Legends Mobile and Genshin Impact – and guess what? Already are also free).

All of these things can be overcome as Netflix continues to ramp up its gaming operations. And while it’s currently focused on premium mobile titles, Verdu hasn’t ruled out the company bringing games to other platforms. However, as with the cloud gaming service, there is nothing to announce at this stage.

The thing is, Netflix’s gaming strategy is still in its early stages. We’ll likely get a better understanding of what the company believes it can contribute to the gaming industry when these five studios start producing their first titles.

If this were any other start-up, it would be easier to only half-track it or dismiss it completely until it actually finds success. But this is Netflix. Its subscription model and streaming service changed TV and film and had a broader impact on entertainment. There’s a reason people spent years speculating about which company would become the “Netflix of gaming” — it’s shorthand for how disruptive that company was. With the right people, the right pipeline, and the right design, Netflix might be able to disrupt games, too.

The rest of the week in the overview

QUOTE | “You’ve seen internal casting calls from the audio team to volunteer for VO talent, which has historically been offered as a benefit to RT staff and not a requirement.” – Rooster Teeth General Manager Jordan Levin in an email sent to all employees following a report about a culture of harassment and crunching at the company from former CEO and Chief Content Officer Kdin Jenzen.

Jenzen stated that she was not paid for the voiceover work she did for the company’s animated shows. Rooster Teeth suggested that this highly specialized skill should be performed as a favor to society, not as a professional, paid job. Levin, who joined in 2019, says he was “not aware of any attempts to negotiate compensation for this work.”

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