Recently, Netflix made waves with its hiring of former Electronic Arts executive Mike Verdu, and its subsequent announcement declaring its intention to delve into the gaming market. This is a huge move by the OTT giant, and could have a long-term impact on the OTT industry at large. When we use the term gaming, we imagine computers and consoles (think Xbox or PlayStation) or developers (think Electronic Arts or Ubisoft). Understandably, Netflix isn’t the first name that comes to mind; but the company is looking to change that soon. So, let’s take a look at the background of association between OTT platforms and gaming.
The relationship between gaming and television is quite old, but is of a very different nature – there have been dozens of TV adaptations of video games, and vice-versa. Occasionally, TV producers and writers have applied their talents in video game development; and we have seen gaming franchises successfully augment the popularity of their TV and movie counterparts (the Star Wars games, for example).
However, from a service provider’s perspective, gaming and television are as far apart as the OTT sector is from cable TV. In fact, some platforms do offer both services independently (Facebook offers Facebook Gaming as well as FacebookTV), but it is for the first time that the streaming giant Netflix is aiming to integrate both services.
At this juncture, it’s important to note that Amazon serves as a glaring exception to these observations due to its unique business model. Amazon is a digital behemoth, and from a single Amazon Prime subscription, a user gains access to dozens of services, including its OTT platform (Prime Video) as well as its two cloud gaming and streaming services (Prime Gaming and Amazon Luna). It is impossible for other OTT service providers to replicate this nature of integration, due to the sheer scale of Amazon’s operations. However, this model does give us a template and a sense of the direction Netflix and other companies could pursue.
On paper, integrating gaming and OTT streaming is a tremendously prudent move for Netflix. It is not explicitly understood, but the gaming is a huge competitor for TV viewership (think about it – an hour spent gaming is an hour not spent streaming). In 2020, India recorded over 60 million OTT subscribers, and over 350 million gamers. The OTT industry might have boomed over the course of the Covid-19 pandemic, but it is still dwarfed by the gaming industry; and gamers are a significant target audience that OTT service providers seek to capture. Some platforms have already taken steps to attract this audience by redirecting focus onto video game adaptations (Forward Unto Dawn, Mortal Kombat, and more), but integrating the two markets is a revolutionary step forward, and may be the move that catapults the OTT industry forward by an even greater extent that the stimulus that the pandemic provided.
Netflix is not a complete stranger to gaming – it has already created several ‘interactive experiences’, such as Carmen Sandeigo and Stranger Things. However, the company aims to ease its way into a new market, starting with mobile gaming. Mike Verdu brings a wealth of experience, and Netflix has announced that he will be leading the new project(s). Reports have stated that the company has already started development, and could launch their first gaming offering as soon as 2023. This is exciting news for the company that famously stated that they competed with Fortnite more than HBO; and we can’t wait to see how this develops.