Stranger Things Have Happened: Netflix dives into gaming

November 15, 2021

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3 min read

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What's going on here?

On Tuesday 2 November, Netflix launched Netflix Games on its Android mobile platform, with five offerings, but the promise of more to come.

What does this mean?

Video streaming giant Netflix has sought to expand beyond its core offering of movies and TV series on demand to the world of subscription gaming. It began the release with five games available through the Android version of its app. These games will appear on iOS in the coming months. Two of the games released are based on its hit TV series Stranger Things (“Stranger Things: 1984” and “Stranger Things 3: The Game”). This follows a long line of TV and movie studios cashing in on the popularity of their offerings by selling video game rights (think “The Simpsons Hit and Run” or any of a multitude of Harry Potter and Lord of the Rings games). The games will be included in Netflix memberships and free from the adverts and in-app purchases which often plague games which are not paid for individually.

What's the big picture effect?

The nascent subscription gaming market is thought to be one of enormous potential, with more and more services moving to a subscription model – think music, movies and audiobooks (all services Amazon offers under this model). The opportunity then exists to evolve subscription gaming into video game streaming. Streaming has overwhelmed several other industries and threatens to do the same to gaming. However, this has lagged somewhat in the gaming industry, due to a couple of factors.

One is the inherent size of the files needed to store a complex, graphically advanced game on a device: these files must be kept for long periods, especially if the game involves a long storyline. In terms of streaming, the high-level graphics and multiplayer formats common in modern gaming require guaranteed fast internet.

That being said, Microsoft began its own foray into the market in 2020, with its Xbox Game Pass. Microsoft met significant resistance from Apple, which insisted that around 100 games included in the service should instead be listed on the App Store. This forms part of a general distaste from Apple towards “stores within stores”, in other words, any games played on its platforms which it does not have control over (and gain revenue from). Similarly, Epic Games has been involved in a long running lawsuit in which it challenged Apple’s high-percentage cut from purchases and the inability to use Epic’s own store for in-app purchases.

Netflix claims not to be worried about these problems, saying the release solely on Android was merely because the project was “still in its early stages”. Despite the small initial release, the head of game development, Mike Verdu, formerly of EA and Facebook, is ambitious and bullish about the project. He said, “we want to begin to build a library of games that offers something for everyone”, suggesting the potential scope of the company’s gaming sector in the future and the investment Netflix is willing to make. This investment includes the acquisition of developer Night School Studio, earlier this year. Netflix has never been shy of taking big risks and making big investments. We reported on its purchase of the rights to Roald Dahl’s works (check that report out here) and so far the risks have generally paid off.

As of now, the games will not be streamed on the cloud, rather they will be downloaded onto your device, be that a smartphone or tablet. This is a different approach than that of Microsoft and other competitors, namely Nvidia GeForce and Amazon Luna, which stream their offering from server farms.

With intense competition from Microsoft, Nvidia and Amazon, can Netflix grab the top spot in subscription gaming, as it has in the video equivalent?

Report written by Joshua White

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