For the past few months, Netflix has been busy shopping, buying independent mobile developers left and right. Netflix wants to get into gaming, but for many, their focus on mobile games has cast doubt on Netflix’s plans.
Last year, Netflix added mobile games to their subscription service, allowing consumers to access these games on a phone or tablet, a move that signaled Netflix’s plans to
In a statement today, Netflix’s Amir Rahimi, VP of Games Studios announced the creation of an in-house game studio created from scratch. Based in Helsinki, Finland, the studio is headed by Marko Lastikka, a former executive at Zynga and EA.
Today I am pleased to announce that we are setting up an in-house game studio in Helsinki, Finland, with Marko Lastikka as studio director. This is another step in our vision to build a world-class game studio that will bring a variety of delicious and highly engaging original games – with no ads and no in-app purchases – to our hundreds of millions of members around the world.
Why Helsinki? It is home to some of the best gaming talents in the world. This will be a game studio that we build from scratch, and our second game studio in Helsinki next door Next games, which became part of Netflix earlier this year. Together with night school studio and Boss Fight Entertainmentthese four studios, each with different strengths and areas of focus, will develop games to suit the diverse tastes of our members.
It’s still in its infancy and we have a lot more work to do to deliver a great gaming experience on Netflix. It can take years to make a game, so I’m proud to see how we’re steadily laying the groundwork for our game studios in our first year, and I’m looking forward to sharing what we produce for years to come.
It makes sense for Netflix to enter interactive entertainment. Video games have always been the largest and most profitable form of media, surpassing movies, streaming and music combined.
It is uncertain whether this new studio will produce mobile games like the rest of their acquired studios. Netflix wants to create interactive content for Netflix and must do so carefully to avoid the mistakes of other big tech companies that go into gaming.
Google and Amazon are other tech giants that have taken the plunge in game development, and both have made major missteps. Google would eventually close its internal studios, and Amazon games canceled more games than they released.
Netflix’s games also don’t have a high player base. According to CNBC and Techcrunch, less than 1% of Netflix subscribers play the games included in their subscription. This could possibly be explained by a lack of interest, or consumers not knowing that Netflix offers games.
We have seen that non-traditional services often fail to grab the consumer’s attention. Services like Google Stadia and Amazon Luna have failed to massively consume as consumers prefer gaming on traditional offerings like the Xbox, Playstation, Nintendo, and PC.
For now, it seems unlikely that this studio will develop high-budget AAA titles. Currently, Netflix is not planning its future games to have microtransactions. Since the games are free to play for Netflix subscribers, it casts doubt on the business model.
Netflix shares are down nearly 62% YTD, after quarter after quarter of lost revenue and a declining subscriber base. Obviously, gaming isn’t enough to keep subscribers, so there’s little point in investing so much in it if it’s not generating revenue.
It might be smarter for Netflix to sell its games on other platforms outside of a Netflix subscription and possibly develop AAA titles for consoles and PC.
Netflix is no stranger to creating original IPs. With the right creatives, they may be able to develop a strong IP offering that will attract subscribers.
While we have a lot of questions about Netflix’s game plans. Developing games takes a long time and a lot can change during development. We should have more information from Netflix in the coming years.
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