“You’re going to need a game controller that talks to every TV, every Fire TV stick, Roku Stick, Chromecast, that technological challenge is nearly impossible.” he said. Then there is the issue of controllers, something that Patcher says will be an issue regardless of how it jumps into gaming. Even if Netflix did jump into cloud gaming, it would need to ensure the hardware you’re using to stream is compatible with the company’s gaming service. (Photo by Peter Summers/Getty Images)Īnd while cloud gaming is the Holy Grail of gaming, it also needs to allow gamers play with people using other systems via something called crossplay. Microsoft opened their first flagship store in Europe this morning, August 11. LONDON, ENGLAND - JULY 11: An Xbox xCloud device on display at the Microsoft store opening on Jin London, England. Google’s Stadia hasn’t caught on as the company hoped it would, and Amazon’s Luna is still in beta. So far, Microsoft ( MSFT) has seen the most success with its cloud gaming platform, but it’s not available everywhere in the world. That’s a serious ask even for a company that lives online. But cloud gaming could also pose challenges.Īccording to IDC's Ward, Netflix would need to ensure it offered connection speeds with latencies of below 150 milliseconds. Netflix does have other avenues for approaching gaming beyond pure mobile, including cloud gaming - which allows gamers to stream high-quality console games on their laptops, smartphones, tablets, and TVs. “You're starting to see more and more focus on fewer titles by a lot of the big publishers, because just to stand up a new successful game of any size is just increasingly difficult.” Netflix’s other gaming options “You can see that if you look across the gaming landscape, just how much consolidation you're seeing,” Truist Securities’ Matthew Thornton told Yahoo Finance. The scarcity of available video game developers makes the business even more difficult. This is a really, really hard business,” Pachter added. None of them has created a mobile game that’s been successful until Activision created ‘Call of Duty’ just a year and a half ago.
“Take a look at Activision ( ATVI), EA ( EA), Take-Two ( TTWO), Ubisoft, and Nintendo ( NTDOY) and tell me what their mobile prowess is. “I’ve covered eight public gaming companies that have gone bankrupt in the last 20 years, and Netflix shrugs it off and says ‘We’re going to go into mobile’,” Wedbush Securities Managing Director Michael Pachter told Yahoo Finance Live. Netflix will likely lean into games for established franchises like 'Stranger Things.' (Photo by Jordan Strauss/Invision/AP) The company already has two titles with its “Stranger Things” games, but those weren’t available through Netflix, and instead launched on the PlayStation, Xbox, and Switch, as well as mobile devices. Netflix’s foray into gaming will focus on mobile games. “The execution of that concept is much harder than it sounds because games are not. “The concept, or the tagline ‘Netflix of games’ is infinitely simple, infinitely understandable and is a great concept,” IDC research director Lewis Ward told Yahoo Finance. Google, meanwhile, spun its own wheels with its game studio Stadia Games and Entertainment, before shuttering it less than two years after launching the venture.Įven Apple ( AAPL) has struggled to make its Apple Arcade service a certified hit out of the gate, with the company cancelling games, and changing directions to include classics like “Monument Valley” to entice fans. Amazon’s initiative suffered a massive setback when its title “Crucible” was released in 2020 and then pulled back before being axed completely. That confirmation follows news that Netflix hired EA ( EA) and Oculus ( FB) veteran Mike Verdu as its new president of game development - a move that could, in theory, help the streaming giant find new revenue streams as subscriber growth slows.īut the $300 billion gaming industry poses huge challenges, even for well-funded tech giants. The streaming giant also confirmed that it’s diving deeper into one of the hottest entertainment markets around: video games.
Just Tuesday, Netflix reported a third-quarter new subscriber forecast that fell 2.3 million below Wall Street’s expectations. Netflix ( NFLX) may need to reinvent itself as people become unglued to their couches and streaming competition from the likes of Disney ( DIS) and Amazon ( AMZN) heats up.
The video game business will be harder for Netflix than streaming Get it sent directly to your inbox every Wednesday by 4 p.m. This article was first featured in Yahoo Finance Tech, a weekly newsletter highlighting our original content on the industry.