With over 200 million paying subscribers worldwide, Netflix is an absolute juggernaut. The streaming entertainment giant has managed to go from being a startup that paid for the right to broadcast other people’s content to being a major Hollywood player, investing tens of millions of dollars in its own productions. So what’s next for Netflix? The answer to this question, at least in part, seems to be video games.
According to a recent article in The Information, Netflix is looking for a video game manager to help them develop their initiative in this area. While the company has recognized its interest in interactive entertainment, it has yet to decide what that would mean in practice. Licensing for existing game publishers? Develop your own games? And how will you be able to play these games? While we don’t know much about Netflix’s plans yet, one thing is clear for now: If Netflix gets involved in video games, the company is almost certain to fail.
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“I think they will try, and I think they will fail,” Michael Pachter, managing director of investment fund Wedbush, told Insider. “It’s difficult to play games.”
Indeed, the video game industry is a very risky business, and even well-established studios, with top talent and years of experience, regularly go bankrupt. “We have the failures of THQ, Midway, Acclaim, 3DO, BAM, Eidos, Atari, Infogrames, Interplay, and probably a few others to illustrate how difficult it is,” said Michael Pachter. “I don’t see how Netflix could think they can develop and sell games.”
Joost van Dreunen, author of “One Up: Creativity, Competition, and the Global Business of Video Games” echoed Michael Pachter’s skepticism. “Big tech companies suck when it comes to games,” he told Insider. He cited Google’s Stadia, Amazon’s Luna, and Facebook’s scattered gaming efforts over the past decade as examples of the systematic failures of large tech companies when it comes to video games.
No tech giant is a major player in the market
Google, Amazon, and Facebook have invested hundreds of millions of dollars in games over the past decade, but neither is a major player in the video game market. “They see distribution ahead of content,” said Joost van Dreunen, “and the opposite is happening.” Instead of making video games and building popular brands, they’ve largely focused on the mechanics of how you buy and access these games: Google’s Stadia platform, a video game streaming service similar to Netflix. , is a perfect example.
Less than two years after Google announced a major game development initiative led by “Assassin’s Creed” creator Jade Raymond, and less than a year after purchasing a video game studio, the company ended these efforts last February.
What is Google focusing on for its Stadia service, rather than making games for it? An “increased focus on using our technology platform for industry partners,” said Phil Harrison, vice president of Google Stadia, in a blog post – a pretty big step backwards from Stadia’s shattering announcement in 2019, which promised a new digital service that would compete with brands like Nintendo, Sony’s PlayStation, and Microsoft’s Xbox.
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For Netflix, which has the advantage of owning a popular franchise like “Stranger Things” that could lend itself to video game adaptations, another problem exists. “Building games from owned intellectual property is also super difficult,” said Michael Pachter. “Disney has failed at least three times in trying to do this, and its brand is much stronger than Netflix’s.”
Over the past few years, Disney’s biggest properties – from Marvel characters to the “Star Wars” franchise – have found success in the gaming arena thanks to Disney ceding creative control largely to the major video game publishers. .
Examples include the game “Marvel’s Spider-Man” from 2018 and “Star Wars Jedi: Fallen Order” from 2019. The former, a PlayStation 4-exclusive game made by Insomniac Games, has sold over 20 million copies. The second, a cross-platform “Star Wars” game with original characters and story, has sold over 10 million copies. At a unit price of around $ 60 (approximately € 50), each game generated over $ 1 billion (approximately € 820 million) in sales.
Netflix could follow a similar pattern and potentially find success.
The company could also create a successful game streaming service that would take advantage of its existing streaming service. It could spend years, and spend hundreds of millions of dollars, to make its brands into major gaming franchises.
Or, it could win by investing billions of dollars in a big game publisher like EA or Ubisoft, much like Amazon recently bought MGM Studios, but for games. This would require a major and long-term institutional commitment from Netflix, in addition to significant financial investments.
“You have to have a stomach,” said Joost van Dreunen. For example, if you look at Google and Amazon, they just don’t have the internal numbers or the understanding of the industry to say, “Yeah, you know what we should be doing? Spend $ 10 billion to really break through.”
For its part, Netflix has yet to detail its gaming plans – but the company acknowledges the reported interest in a larger investment in video games going forward.
“Our members appreciate the variety and quality of our content,” the company said in a statement. “Members also like to engage more directly with the stories they love – through interactive shows like ‘Bandersnatch’ and ‘You vs Wild’, or games based on ‘Stranger Things’, ‘La Casa de Papel’. and ‘To all the boys.’ So we’re excited to do more with interactive entertainment. “
Original version: Ben Gilbert / Insider
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