Netflix Gaming

Video Games on Netflix? What is the fuss all about?

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The video game business has been growing at the rate of knots over the past few years. In fact, currently, the video game industry is worth more than the music and TV/film industries combined. This incredible growth hasn’t gone unnoticed either, with massive companies like Amazon and Google also jumping in to compete against the current big players. The influx of new interest hasn’t stopped there though as a new bombshell report from Bloomberg suggests that the streaming giant Netflix has decided to enter the ring as well.

Netflix has a long history of adapting well to new emerging market conditions. For instance, when the physical movie sales were slowing down, Netflix was one of the first companies to make the switch to streaming. And those that kept treading the old path, like Blockbuster, faded into obscurity. So, the streaming giant is no slouch when it comes to trying out new things. However, the video games industry is a whole new ball-game and rehashing the video streaming platform for game streaming could prove to be rather strenuous.

Netflix has brought veteran gaming leadership on board

In order to make its foray into video games smoother, Netflix has managed to poach a big name from the industry. Mike Verdu, who has previously worked at Oculus and EA, is now the VP of Gaming at Netflix. This hiring is the statement of intent from Netflix that finally pushes the whole Netflix Gaming narrative from just an idea into a real project. We’re sure that we’ll see some more big talent moving from other parts of the industry to Netflix as well.

Mike Verdu Netflix
Mike Verdu, VP of Gaming at Netflix

Not only that but Netflix has already made a step into gaming space with its recently announced Stranger Things game. Having said that, video game streaming is a complicated beast and even some of the brightest minds in the industry have failed to deliver on the promised future of gaming.

For instance, when Google announced Stadia, it brought loads of veteran industry leadership onboard. However, not even the brilliant minds of gaming industry like Jade Raymond and Phil Harrison could help bolster Stadia’s appeal as the service quickly lost steam and receded into insignificance.

Netflix won’t repeat Google Stadia’s mistakes

While a lot of people try to attribute Stadia’s failure to the fact that the internet infrastructure is just not ready for it, the actual blame for the service’s downfall arguably falls down to the business model. Google Stadia users have to buy individual games and pay a monthly fee on top of that in order to use the service. Such a thing just doesn’t work in a world where other streaming services that already allow you to play all the games in the library for a monthly price exist.

Jade Raymond, Former Head of Stadia Games and Entertainment

So, the first thing that Netflix would already do better than Google is being more perceptive of the market. According to the report, game streaming will just be one of the genres within Netflix and would work seamlessly in tandem with its other content. So, the service is already primed for a perfect rival to the likes of Project XCloud (or Xbox Game Pass Streaming), PSNow, and GeForce Now.

Netflix could have a hard time incorporating itself within the gaming space

Even though Netflix could potentially hire the right people and have a perfectly designed business model, there are still a few caveats that could prevent it from achieving any success in the gaming industry. Over the past couple of decades, we have seen video game companies rise up to new heights, and then shoot themselves in the foot. The point I’m trying to make is that, companies like Microsoft, Sony, Nintendo, and Valve have seen and withstood it all. Their resilience and experience is something a new entrant just cannot replicate.

So, Netflix would have to be extremely careful with how it approaches things. If it tries to barge its way into the industry with the know-it-all arrogance like Google did, it would probably fail. I mean, this stuff is complicated and taking consumer feedback on board while designing your product isn’t a bad idea. Not only that, but when it does eventually face a hurdle (and it will), Netflix would have to weather the storm and not instantly pull the plug.

For instance, Microsoft has come close to shutting down its Xbox division twice in the past two decades. And, it is the perseverance of the Xbox leadership that has turned the ship around and made it arguably the prime place to play games. Netflix has to take notes and learn from that.

The world still isn’t quite ready for Video Game Streaming

There is no debating the fact that video game streaming is the eventual future of gaming. However, that future is still not quite within our reach as the infrastructure just isn’t ready for it. Unlike video streaming, which only requires bandwidth, game streaming also requires incredibly low response times and latency. And, even if everything is wired up perfectly, there are still physical limitations to how fast data can travel. The only way to counter it is using some clever input-predicting AI and building more data centers closer to the consumers.

Project xCloud Xbox

Many companies are already trying to expand their network into different parts of the world. However, we’re still many years away from achieving the accessible-to-everyone promise of game streaming. Consequently, this is where things start to get tricky for Netflix. Companies like Microsoft and Sony can afford to experiment with video game cloud streaming since they market it as an auxiliary component of their console and gaming ecosystem. And, since Netflix’s main business would be streaming, it just cannot get the same leeway that those companies would get.

Furthermore, Netflix also doesn’t own any of its data centers like Microsoft does. Instead, it hosts its content on Amazon’s cloud infrastructure which has its own additional cost. Having said that, since Amazon is also trying to expand its own game streaming service, Luna, this could actually end up being a good thing for Netflix.

Nevertheless, the video streaming platform would have to be very careful about how it markets game streaming to its audience. If they don’t make any big promises and just slowly roll it out as part of the current subscriptions, they should be fine. In addition to that, they’d have to take the hit for a few years until the infrastructure and technology catches up to fully utilize the potential of game streaming.

With that said, Netflix hasn’t officially confirmed anything and the game streaming on Netflix could be in a completely different bracket from the rest of the field. All we can do is wait and see.

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