Netflix wants to try its luck in video games to keep the attention of its subscribers, without guarantee that its strategy of seduction, which would involve the variation in virtual games of particularly popular films or series, attracts en masse new followers.
The platform, which has built its success on the on-demand distribution of films, series, documentaries and, more recently, reality TV shows, presented its ambitions on Tuesday evening, explaining that it wanted to offer a new category of content.
It is especially for Netflix, according to several analysts, to retain its subscribers at a time when the competition on its core business is becoming more and more pressing.
For entertainment and tech companies that already offer video, adding games to it seems “a natural extension of what they’re already doing,” notes Ross Benes, analyst for eMarketer.
“Adding games allows them to suck up users’ time even more and to anchor this activity even more in the daily lives of their customers,” he said.
This new offer could encourage some of them to remain subscribers but, according to him, it is unlikely to cause the number of new customers to soar.
The technology investor Gene Munster wants to be a little more encouraging.
“It’s a good tactic to keep and even attract new paying subscribers at the margin,” he wrote on Twitter, recalling that around 2 billion people play video games each month.
Netflix has already experimented with virtual games by airing in 2018 a fully interactive episode of the anticipation series “Black Mirror” and by launching a free-to-play mobile game based on the popular series “Stranger Things”.
The platform now wants to move forward gradually, starting with games designed for smartphones and tablets at no additional cost to existing customers.
“We’re going to be trying out a bunch of different games through a variety of different mechanics to see what really works for our members,” COO Greg Peters said on a conference call Tuesday.
The group wants to build on the success of certain shows to offer their fans new interactive worlds and is also negotiating with video game publishers to possibly acquire licenses.
Netflix’s ambitions should have “no” impact on the video game world, however, says Michael Pachter, analyst for Wedbush Securities.
“Management recognizes that the flow of new videos (on its platform) is slower, even as costs keep increasing,” he notes in a note.
The foray into video games “represents a ‘hot new thing’ to distract investors” as Netflix’s growth begins to slow, Pachter says.
“They will attract few, if any, real players, and do not really have intellectual property rights on content allowing them to create very good games,” said the analyst.
While other entertainment giants have already tried their luck, few games based on films or series have had any real success.
“The marriage of Hollywood productions and games based on these contents has had a turbulent history,” remarks Joe McCormack, analyst for Third Bridge. Both Disney and NBCUniversal have closed their divisions dedicated to video games.
“In order to be a game-changer, Netflix will have to overcome the cultural differences between Hollywood studios and video game studios,” said McCormack.
Another challenge is the particularly fierce competition in the video game sector, as Netflix does not necessarily have the technical capacities necessary to broadcast sophisticated games.
To achieve the same quality of streaming games as on a console, you need a broadband connection as well as controllers.
Netflix faces much more experienced players in this niche like Amazon, Google, Microsoft and Sony, which offer their own streaming game services.
Netflix executives want to rely on the group’s ability to tell stories and produce new content.
“Our job is to create incredible universes and characters, and we know that viewers want to go further,” said Greg Peters.