Los Gatos, California-based Media Streaming Giant, Netflix, confirmed that they have hired Mike Verdu, former game development leader at Oculus and EA, as their new head of Game Development. Though before confirmation there was a lot of speculation it still managed to surprise many people.
The video streaming platform entering the gaming industry would be great for people looking for ways to watch Netflix US in the UK. However, other media streaming companies like Amazon Prime, AppleTV, Disney, etc. do have their gaming system already set up.
Why Is Netflix Jumping Into The Gaming Industry?
As it turns out, Netflix is facing huge competition from Disney and Amazon Prime. They are getting a major backlash from its subscribers as the users find it quite expensive in comparison to Amazon Prime Video and Disney, especially when the content is pretty comparable.
Although, way back in 2011 Netflix was well aware of the competition it was going to face and that is when they started to produce their original content to be featured on the platform as “Netflix Originals”. And it has worked well so far.
On one hand, this popular streaming platform is losing subscribers, and on the other, the cost of production for series like Money Heist is way too much to sustain. It is speculated that this wave of losing subscribers has precipitated their shift into the sporting arena.
Possible Implications Of Netflix Entering Gaming Industry
The company currently has a user base of 204 Million users spread over 190 Countries in the World. But, since they have been devoted to giving access to high-quality content in the form of Movies and Shows it does not have a user base for games.
Other streaming companies like Amazon Video, Google, Disney, Apple, etc. have also tried their luck in the gaming industry before and have mostly been successful.
According to Bloomberg, the streaming giant is planning to start slow and with a low investment strategy to minimize the risk factor. They have planned not to charge any extra fee for the games. For now, Netflix is not aiming at revenue, but to build a user base and retain their users as much as they can. If this works for them, they will not only retain their subscribers but will also attract more in the coming times.
Is This An Ideal State For Partnerships?
It was mentioned that Mike Verdu, who was hired as the Game Development Leader has changed 4 Jobs in the last 10 years before his new role. And some experts reacted pessimistically, “Netflix does not have infrastructure and expertise in Gaming Business, and building infrastructure won’t be that easy for them.”
Considering these factors, Netflix appears to be vulnerable to failure. But, this also implies some business opportunities. Companies that are in the Gaming Industry can partner with them to provide them with the strategic and infrastructural support they need.
This could be a win-win situation for both companies. The streaming giant will get developmental support and the companies will be able to float their games on 204 Million screens overnight.
There are rumours that Netflix is partnering with Sony. If they do so, it will be an amazing deal for Netflix, as the quality and gaming experience that Sony provides is unbeatable to date.
Conclusion
On one side Netflix is losing users and on the other, it is pouring huge amounts of money into the production of admirable quality series like Money Heist. This is one of the possible reasons for them to jump into the Gaming Industry.
This is an ideal state for any gaming company to partner with Netflix. The reason being, if this works out Netflix will be able to not only retain or attract users but at a larger scale, over a period of time, they can even come out with their full-fledged gaming system.
As the user base is more than 200 Million this certainly seems to be a possibility.
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