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Netflix video game Gambit is taking shape as the streaming competition intensifies

Netflix Co., Ltd.

Co-founder Reed Hastings often says that he sees video games as his biggest competitor to streaming company customers.

Currently, he wants Netflix to create his own video game, and the company leverages industry veterans to oversee its strategy.

This move underscores Netflix’s desire to attract new customers and keep users on the platform for extended periods of time. This happens when the company faces the first serious challenge to its streaming business.New entrants including Walt Disney Co., Ltd.

DIS 0.23%

Disney + and WarnerMedia’s HBO Max have advanced, and there are also deep-pocket rivals such as Apple. Co., Ltd.

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And Amazon.com Co., Ltd.

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We are also actively investing in content.

Netflix is ​​still the leading streaming service with more than 200 million subscribers worldwide, but its growth has slowed this year as the pandemic-related shutdown has ended. Investors are watching carefully whether Netflix will diversify its revenue streams beyond subscriptions to support its growing content budget.

Video games can be a lucrative solution. Global personal consumption of gaming software is projected to reach $ 175.8 billion this year and exceed $ 200 billion by 2023, according to Newzoo BV. The types of mobile games that Netflix is ​​expected to pay attention to are on track to account for about half the length of the year.

According to analysts, success is not guaranteed because large incumbents can struggle with mobile games and find the right content to become a video game. ..

According to people familiar with Netflix thinking, Netflix’s video game strategy is still an ongoing task. According to these people, the immediate focus is on creating mobile games, not advertising as in the Netflix entertainment business.

Netflix plans to allow video games to be played in the app at no additional charge, one said. The company does not comment on whether users can download these games.

“They will probably reduce churn,” said benchmark analyst Mike Hickey. “You can burn out your TV series in a day, but you can always be in the game for months or years.”

Netflix has hired Mike Verdu, seen in 2015, as Vice President of Game Development.

Photo:
Glen König / Los Angeles Times / Getty Images

The company said it has adopted Facebook this week Co., Ltd.

FB -0.90%

Executive Mike Verdu as Vice President of Game Development. Verdu joined Facebook in May 2019 and was responsible for delivering games and other content to the company’s Oculus-branded virtual reality headset.

Bloomberg first reported the hiring of Verdu, who also worked at Electronic Arts. Co., Ltd.

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And Zynga Co., Ltd.

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At Netflix, Verdu collaborates with other executives with experience in the gaming industry, including director Ann Mather, who has spent more than 15 years as a director of Glu Mobile, a maker of Kim Kardashian: Hollywood, which was recently acquired by Electronic. To do. art.

Prior to being appointed Chief of Netflix Talent in 2017, Jessica Neil was Chief Human Resources Officer at Scopeley, a mobile gaming company. Netflix Chief Financial Officer Spencer Neumann, who joined the company in 2019, was poached by Activision Blizzard. Co., Ltd.

ATVI -1.78%

One of the largest video game companies in the world. Activision Blizzard is suing Netflix on this matter. Netflix declined to comment on Thursday’s proceedings.

Netflix is ​​increasingly showing interest in the video game industry. The company recently worked on creative talent, including Bridgerton producer Shonda Rhimes, to cover languages ​​for creating content-based video games.

Netflix recently signed a deal with Shonda Rhimes to expand its ties beyond television to film, games and other areas.

Photo:
Nina Promer / Shutterstock

In April, Chief Operating Officer Greg Peters said the game would be a “significant part” of the upcoming Netflix experience. “We are trying to understand all these different ways we can increase these connection points. We can deepen that fandom,” he said in a conference call.

Netflix has had modest success in mobile games through a license agreement with Texas studio BonusXP Inc. Its $ 4.99 title, Stranger Things 3: The Game, is based on the popular Netflix properties and is based on Apple and Google’s app store Sensor Tower Inc since its launch in August 2019. The data shows.

However, the game is not streamed online or stored on Netflix’s mobile app. Only downloadable. Netflix needs approval from Apple, an App Store operator who previously refused to work with Microsoft, to stream multiple games from within the mobile app on the iPhone or iPad. Co., Ltd.

(MSFT) -0.73%

And Facebook follow the same path.

Mobile games are usually cheaper to develop and more complex to develop than console and computer games. It also tends to slow down, making it easier to stream over the internet without delay. As their names suggest, they are designed to play on the go, not on the TV screen, but it looks ready to change. Microsoft recently announced that it’s working with TV makers to bundle the Xbox Game Pass service into a set that allows users to stream games without a console.

However, the market is fierce, even for large industry players such as Electronic Arts and Take-Two Interactive Software. Co., Ltd.

TTWO -2.26%

And Ubisoft Entertainment SA are all struggling to stand out.

Other major movie and TV show makers have tried to break into the development of video games, but their efforts haven’t lasted long. Disney abandoned the game studio a few years ago, as Viacom did more than a decade ago.

“”
“Do you want to play the’Bridgerton’game?”


— Wedbush Securities Analyst Michael Pachter

More recently, major tech companies such as Microsoft, Google, Facebook and Amazon have launched services to support streaming video games over the Internet.

According to Sensor Tower, the top 100 best-selling mobile games in the United States last year accounted for more than half, or about 64%, of all players spending on such titles. 10 is based on TV shows and movies, indicating that this genre is popular. Netflix can take more advantage of its own properties to develop games, but some analysts say that little is useful for an interactive experience.

“Would you like to play the’Bridgerton’game?” Said Michael Pachter, a long-time Netflix critic and analyst at Wedbush Securities. “They will fail miserably.”

Pactor also speaks of his bearish attitude to the difficulties Netflix expects to face when convincing people to play games through TV apps that most users go to see a selection of movies and shows. Said. He said consumers would need a game controller that could interact with all major TV brands and connect to the Internet.

Still, there are potential benefits to Netflix’s deep dive into video games. Similar to Stranger Things’ plans, Hicky said the impressive deal of games with third parties will reduce the financial pressure to quickly put together a library on Netflix with original content. “The biggest cost of game development is people,” he said.

Write to Sarah E. Needleman ([email protected] Zoom.com) and Joe Flint ([email protected] Zoom.com)

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Netflix video game Gambit is taking shape as the streaming competition intensifies

Source link Netflix video game Gambit is taking shape as the streaming competition intensifies

Netflix video game Gambit is taking shape as the streaming competition intensifies

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