What Netflix Should Consider Before Diving into Gaming

Netflix

Netflix

When we talk about video-on-demand streaming services, it’s undeniable that Netflix has the ultimate supremacy due to the factors such as content library size, coverage area, compatibility, and more.

Hard to believe that the service founded by Reed Hastings and Marc Randolph in 1997 started as a DVD rental service, but now it has completely revolutionized the way people watch television.

With an annual review of $25 billion, 215 million subscribers worldwide, and availability in 191 countries, truly Netflix has become the ultimate champion of the streaming service industry.

If we talk about digital content, the Netflix content library currently holds a huge collection of 4593 movies and 1157 TV shows that are both in-house productions and licensed content from various production houses and companies.

Unfortunately, its content library is classified and categorized depending on the user’s geographical location. Someone sitting in Australia won’t have access to the same Netflix TV shows or movies available to American users.

But don’t worry about it. With just a few clicks of VPN software, you can easily get past these frustrating geographical restrictions. Interested to know how? Check HowToWatchInAustralia for more in-depth information.

With the streaming service industry conquered, it was just a matter of time before Netflix set its eyes on some other market. With a growth rate of 9% and a revenue of $159.3 billion in 2020, Netflix finally has decided to step into the gaming industry.

Tech giants such as Apple and Microsoft investing in the gaming industry is nothing new. Still, if this strategy is successful, then the power scales could easily shift from the gaming studios to the digital streaming service providers.

According to the report by The Verge, Netflix has also decided to step into the race of gaming subscription supremacy. Netflix is already looking to hire an executive to oversee the gaming efforts completely.

But if you think about it for a second, it all makes sense why the streaming giant is so focused on entering this domain. Due to increased competition, the streaming service market shares have recently crumbled down from 29% to 20%.

Right now, differentiation is the key. Netflix believes that giving something unique or different to the users can stand out from the competition.

Whether the streaming giant will be successful or not remains to be seen, but there are a few things Netflix should consider before jumping into the gaming industry.

Understanding Games

An average Netflix user spends about 3.2 hours each day on the streaming service. However, the most popular games can easily engage the gamers for a couple of hours each day. According to a report, 70% of Fortnite players spend at least six hours playing each week.

Creating an engaging game is very different from creating an engaging TV show or movie. You can take the example of Cyberpunk 2077. It had amazing soundtracks, great graphics, and even Keanu Reeves, but still, many fans to this date think of it as one of the biggest failures of all time.

Not an Easy Task

Streaming shows or movies on TVs, smartphones, laptops, and PCs are easier than streaming heavy graphic games.

Netflix would have to rely heavily on data centers or external servers for hosting game streams. Netflix mustn’t underestimate the importance of streaming quality when providing gaming experiences.

Core Advantages

Netflix will have some serious competition when it finally enters the gaming industry. It indeed has about 215 million subscribers, but it doesn’t seem like an advantage when you compare this number to 1 billion iPhone users.

One of the most successful game subscription services is the Xbox Game, with 23 million subscribers worldwide. Xbox gathered this many subscribers due to its partnership with games like “Halo” and “Forza.”

This is something that Netflix is completely lacking at the moment.

Development Cost

Developing an A game can cost anywhere between $50-$100 million, and if you factor in the cost of marketing, the cost will double. Netflix will also have to deliver more than one game.

Netflix will have to invest billions of dollars to create their in-house development team and acquire full-fledged game publishers to compete with PlayStation.

Targeting the Right Audience

Netflix needs to define which type of audience it will be targeting. There are hardcore gamers and average gamers that play now and then.

Hardcore gamers are fully committed to the games and most likely already subscribed to powerhouses such as PlayStation and Xbox. It will be difficult for Netflix to compete or bring these subscribers to its side.

But if Netflix targets average gamers more likely to play free-to-play games, bringing them to this side shouldn’t be that difficult.

Conclusion

Netflix’s idea of incorporating a gaming model is undoubtedly amazing and thrilling at the same time. However, instead of jumping on the bandwagon, Netflix needs to consider a few things before incorporating gaming into its current streaming platform.

In the current era of the metaverse, a subscription gaming model seems a bit dubious. But I guess we will have to wait and see how this venture turns out in the future.

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