Video Game Streaming: Netflix to Launch a Cloud Gaming Platform?

Industry InsightsVideo Game Streaming: Netflix to launch a Cloud Gaming Platform?
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    VlogBox considers gaming to be among the fastest growing verticals on Connected television, and Netflix, one of the world’s premier video streaming platforms, only emphasized importance to develop gaming categories in the streaming ecosystem. The streaming giant, with over 200 million subscriptions worldwide as of Q1 2021, has begun to drop hints that it’s looking to muscle into the same territory currently contested by Google’s Stadia and NVidia’s GeForce Now – cloud streaming.

    The hint comes in the form of a recent hire, Mike Verdu, as “vice president of game development.” Verdu has a long history in the gaming industry, working for multinational video game publisher and developer Electronic Arts, as well as Facebook.

    In May, Netflix commented to entertainment media news outlet Polygon that it was looking to do more with “interactive entertainment”, building on its experiments with episodes of the shows Black Mirror and Unbreakable Kimmy Schmidt.

    Rising subscriptions?

    According to a report by Bloomberg, a source “familiar with the situation” indicated that Netflix could introduce cloud gaming services to its platform by next year. 

    However, few details have been released. Bloomberg’s source has mentioned, however, that subscriptions fees are not currently forecasted to rise, and that games will appear as a new ‘genre’ in the platform itself, alongside the current video offerings. 

    What’s cloud gaming anyway?

    Cloud gaming is an increasingly popular way of accessing video games, involving streaming the video game visual output to a smart TV, PC, or mobile smartphone, while streaming back inputs from the players. 

    Streaming video games have gotten more attention recently as shortages in hardware such as hard drives and video cards have pushed prices up, as a result of those hardware’s uses in cryptocurrency mining.

    As a result, players have been looking for more economical ways to play the latest games with top graphical fidelity, without having to shell out the thousands of dollars it may cost to build a high-end machine.

    Capitalizing on a rising ride

    The time may be right for a Netflix-inspired revolution in the video game market, as the industry benefited heavily from quarantine restrictions. Newzoo, a games data provider, recently forecasted a player base of 2.9 billion globally by the end of 2021, with revenues rising from approximately $175.8 billion to over $200 billion by 2023.

    Netflix could also be looking to make the most out of a competitor for eyeballs – as of March 2020, average weekly Netflix viewing time in the UK had reached nearly nine hours, while video games were trailing not far behind – with nearly seven hours. 

    If Netflix does enter the video game streaming market, it will be joining other FAANG trailblazers like Google, whose Stadia product is making a hard push to attract developers, recently cutting revenue shares for devs with an 85/15 split, compared to Steam and console app stores taking 30%. 

    Amazon’s Luna+ is another cloud gaming platform currently in early access, with subscription fees pegged at $7 a month in the United States for a variety of games, with additional subscriptions to individual publishers unlocking a greater library of offerings.

    However, if the rumours are true and gaming content will be bundled into existing subscriptions, at least at first, then Netflix may have a significant heads up on their competitors.