Netflix will enter the mobile gaming market in 2022 with a free service, integrated into its video streaming platform. It is concentrating on exclusive games based on its original video titles, while adding third-party games will ensure early traction following launch. Netflix must specifically focus on acquiring game developers to add experience and competitive edge to its gaming division.
Netflix is following a traditional film-makers’ approach to gaming
Following in the footsteps of Disney and Warner Bros, Netflix is building exclusive games based on its movies’ intellectual property (IP). Netflix is building an in-house gaming division as well as licensing IP to game developers. It is known to be working with developers like Bonus XP and Ludic Games, which have built games based on Netflix’s IP, such as Stranger Things and Kate. In September 2021, it acquired game developer Night School Studio to add established mobile titles such as Oxenfree and Afterparty to its portfolio of exclusives.
Netflix gaming will resemble Apple Arcade
Apple Arcade is a subscription-based, ads- and microtransactions-free service that features downloadable, exclusive game titles for Apple devices. Similarly, Netflix’s games will be available to download to a device, and the service will be integrated into its video streaming platform, with no ads or additional charges. While this is a consumer-friendly approach, Netflix should note that Apple Arcade has been struggling to add new users over the past two years.
A free service including exclusive titles is not enough to succeed in the competitive mobile gaming industry. The quality of the games and Netflix’s ability to attract users will ultimately determine its success in the long run. Therefore, Netflix must consider including popular third-party titles like PUBG Mobile and Among Us to increase the appeal of the service and attract users post-launch. It could also use its associations with gaming giants such as Sony and Riot Games to collaborate on games for its new service.
Gaming popularity varies
The popularity of mobile gaming genres varies from one country to another. According to Facebook’s Genre and Great Games report, published in 2020, Japanese gamers particularly enjoy role-playing and augmented reality (AR) games, while those in the US and UK prefer casino and card games. Netflix should follow country-specific trends to ensure the success of its gaming service.
Netflix does not operate in China, a market that accounted for about 35% of global mobile gaming revenues in 2020. Therefore, the company must focus on other fast-growing markets like India, Brazil, Canada, Germany, France, Italy, and Spain. Presumably, aware of the opportunities in these countries, Netflix has begun testing the gaming service in select markets, including Italy and Spain.
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Experience in the market is needed
Netflix is a new entrant in the evolving and heavily contested mobile gaming industry. It lacks experience in gaming and must invest to overcome competitive risks and succeed in the industry. One of the quickest ways to succeed in any theme is to acquire a company that is already excelling.
Netflix should acquire game developers to strengthen its gaming division. It should purchase and develop video content that can be converted into attractive gaming content. Appropriate expansion of the games portfolio will help improve the gaming service’s appeal and ensure customer retention in the long run.