It’s been rough times for Netflix. As the streaming business sector turns out to be progressively immersed and development eases back, the organization must discover different feasible approaches to bring in cash. Computer games could become an especially encouraging introduction to the platform.
The relevance of this extension is made more clear by the streaming Disney+ stage launch happened last winter and made Netflix’s stock fiercely change.
Its shares plummeted 29% in the 9 months ahead of the prospective Disney+ introduction. The platform’s price didn’t return to the original one until the beginning of this year, as sponsors’ confidence in Netflix’s strong competitiveness came back. By the conclusion of 2019, the subscribers’ quantity began to fall due to the market glut. So the price raising doesn’t influence the increasing subscriber growth and looks pretty dubious on the strong rivalry background.
Furthermore, this incident showed Netflix’s sensibility in contrast to other tech giants. Facebook, Google, Amazon, Apple are more visited and retain their consumers for a longer time. When it comes to Netflix’s clients, they usually log in, watch their favorite shows, and leave without necessarily rating the product they consume. So, for people, this is a random one-off activity.
Against the background of the companies’ activity like Amazon, this looks rather dim. Deeper interaction of customers, users, and suppliers are facilitated by optimization and direction of their behavior, communication in the right direction – this is the unique approach that Amazon uses.
Continuing with Amazon’s example, sellers who supply products are constantly improving it and set prices based on clients’ reviews, while customers themselves have the opportunity to get a general idea of suppliers and products while acquainting with the feedback and reviews left by other consumers.
In order to get active again, Netflix should roll out a list of services that can increase multi-level engagement. If this popular platform values its name it is worth using this variant as an alternative to earning money by raising subscription prices. The video games’ introduction into the service can help sustain the dynamics of their shares prices. It can be explained by the next four reasons:
1. The most powerful competitor
Blockbuster shooter Fortnight and Netflix rival for the same consumers’ attention and money. Video games are currently in leading positions of all entertainment types; its global income exceeds 150Bn USD. This number will possibly grow to 300Bn USD by 2025.
There is an impressive demographic concurrence between game fans and Netflix clients. However, it lags on 90% in this racing for screen time. That is an important ground why video games can’t be neglected – the opportunity to incorporate this idea into the platform’s business model must be found.
2. The Witcher
A series of Polish fantasy novels “The Witcher” inspired Netflix to create their original series. However, people first got acquainted with this character before the show with help of earlier three video games’ release. The debut of this show itself caused the CD Project Red shares to increase.
Positive side effects are pretty infrequent. But when they reach such a scale, it’s a breakthrough that cannot be ignored. Netflix has a reputation for a quality content distributor. Thus, it is beneficial to replace competition with video game publishers by cooperating to dilute the list of published products. It has every chance to implement this idea in life considering that Netflix managed to gain impressive momentum in development in less than 7 years.
Using this experience, the company will be able to form its game studios by acquiring well-known video game companies. This will become a kind of symbiosis: games will become popular due to the movies or TV-series which will be promoted by video games in its turn.
3. Enlarged engagement
Mass online games are destined for players’ multi-level engagement allowing them to interact with each other, make friends, or compete with the developers themselves online. Such online games like World of Warcraft have been flourishing for years.
Tech giants like Microsoft and Sony made their gimmicks for such games, pushing their creators to interact. Netflix just needs to learn from their skills to social networks collaboration, contents sharing, and the ability to stream their own video games. All of the above will afford the platform with unique, exclusive content.
4. No more hardware needed
Google Stadia and Microsoft xCloud left the laborious process of video games’ creation for high-end desktop gamers’ computers in the past. Identical to Netflix’s successful biz-model, video games don’t need a lot of equipment anymore, so the gamers can enjoy direct-to-screen streaming.
Netflix is well placed to enter this fluid, streaming-focused competitive environment. Its close collaboration with Amazon can play a significant role too. It comes without surprise that Netflix started working with Amazon, which has already launched its own streaming platform and this partnership will help to create Netflix’s video game streaming service.
