The days of running to Blockbuster to pick up a movie for the night are gone and while maybe not as culturally significant, going to the store to grab the newest release of Call of Duty are all but over as well.
Streaming services have completely taken over the entertainment industry with most consumers now watching their favorite television shows and movies on subscription services such as Disney+ (DIS), Hulu, Amazon Prime Video (AMZN), and Netflix (NFLX).
Subscription Models in Video Games
Seeing the success this business model has had, Microsoft (MSFT) has gone all in on its Xbox Game Pass that gives you access to a large variety of games for a monthly subscription price of $15. The idea is similar to what Netflix and others did to television as customers were sick of paying a large amount to cable providers to watch a few shows loaded with advertisements in between. Or several dollars a pop to rent a single movie that had to be returned in a few days. A subscription model for video games would end the standard purchase of $60 for each new video game that can add up quickly for any moderate gamer. And so, here comes Netflix once again.
Netflix recently announced plans to add video games to its service at no extra cost and will be accessible through the app. That doesn’t mean Netflix won’t possibly make it an extra package in the future as more games are added or that it won’t use it to justify an overall price increase for a subscription.
Approach
There are many ways Netflix could decide to go with adding video games to its library. Netflix could design and/or publish its own games (similar to how Microsoft has purchased many game studios to design video games for its platforms), or could just act as a library for games available in a similar format to Google Stadia. It appears Netflix is deciding to go with the Microsoft model of creating their own games for its platform, which given Stadia’s "success" is probably the right move.
Now the full plans for how Netflix will approach adding video games to its service is not known, it's likely that the first iteration of games will be something similar to what Netflix did with Black Mirror: Bandersnatch. This focus on story driven games with player choice would be a more seamless transition from movies/shows to interactive stories that gives consumers an immersive experience. However, those looking to play Fortnite or Counter-Strike will be waiting a long time as it remains to be seen whether Netflix decides to ever add these types of multiplayer experiences.
What Will Be Offered?
Outside of types of games offered and how they will be implemented, Netflix has a large number of intellectual properties it can use to branch out into the video game industry. Netflix has made a large push to create its own unique original content that is only available to its platform such as Stranger Things or Ozark. It would seem like a logical conclusion that Netflix could continue this model into its video games and using an IP it has already built up such as Stranger Things to help transition customers into trying its video games. Again, the company has already done this exact thing with Black Mirror: Bandersnatch and looking back that might have been a test run by Netflix to see if this kind of interactive storytelling has a market in today’s competitive entertainment industry.
While the long term goal may be to produce its own content in-house, Netflix will likely outsource much of their game development to start as it simply hasn’t built up the infrastructure yet. It could be a situation in which Netflix produces their own games similar to Bandersnatch at first while other studios develop bigger games until the concept is proven and Netflix has the ability to make its own larger video games the same way it took years for Netflix to really start producing its own shows/movies.
Wrapping Up
There are many questions surrounding this announcement that Netflix will start offering video games on its platform. Will games have to be downloaded or will they be able to be simile streamed as cloud-based gaming becomes more popular? Will these games be essentially just movies/shows with minimal interaction from the player, or will they be full fledged games offering a much more immersive experience that games often provide? Lastly, will Netflix be producing these games themselves or outsourcing much of the game development until further down the road? Hopefully these questions will be answered soon as subscribers get to test out the new games offered and competitors take note to see whether this experiment is successful or gets thrown into the trash bin next to Google Stadia.
