Following Netflix’s latest quarterly report, co-CEOs Greg Peters and Ted Sarandos and Netflix VP of finance Spencer Wang took to YouTube to discuss how Q3 went, the company’s plans for the future and how they plan to win “the big prize” of gaming.
As of right now, the streaming giant is taking a “crawl, walk, run” approach to games, with two years’ experience in the market and incremental growth towards its goal.
Multipurpose brands
With Netflix’s growing status as a multimedia brand, an inherent advantage is the cross-media opportunities for its IPs. For example, the second season of the ongoing Vikings: Valhalla aired in January 2023, and the third season isn’t expected until next year; so, in the interim, a real-time strategy mobile game has launched adapting the show with appearances from popular characters Leif Eriksson, Freydis Eriksdotter and Harald Hardrada – keeping fans engaged during the wait.
Commenting on this type of IP practice, Peters said: “From a strategic perspective, we believe that we can build games into a strong content category leveraging our current core film and series by connecting members – especially members that are fans of specific IPs – with games that they will love.”
“It’s a great experience for the superfan to get themselves into the universe in between seasons of a show. It’s really exciting,” added Sarandos.
Peters believes this will grow audiences both ways, delivering new content to fans of Netflix shows in the form of games, and drawing fans of the games “back into the core business”. Even so, Netflix views games as important for growth, but not the only important factor: its shows still represent the core of what the streaming giant offers.
“If you think about the range of content we’re offering,” he said, “games just add one extra layer to that variety and depth.”
And, to the envy of many a mobile developer, Netflix has another advantage in the gaming space: with an active audience already, it doesn’t have to worry about cost-effectively acquiring new players. “We’re essentially side-stepping the biggest issue that the mobile games market has today,” Peters explained.
To the future
With high-profile games like Football Manager 2024 and Money Heist due to release in Q4, and Virgin River confirmed for Q1 2024, there was a sense of excitement from Peters. The main challenges for Netflix’s games are the current scale and investment model, both “very, very small relative to our overall content spend and engagement”.
Peters hopes to scale up so that games go beyond a stopgap between seasons and become an enterprise with “material impact on the business”, but engagement must be multiplied many times over to achieve this.
Wang weighed in with a shared enthusiasm, noting that while games are still small on Netflix, they are one of the “big new areas for us to expand into”.
Service tests are currently ongoing to expand Netflix Games, with plans to allow Netflix users to stream games on their televisions using phones as controllers.
