In 2022, Netflix promised to have fifty video games available to its subscribers by the end of the year. To its great credit, the streaming platform managed to achieve that lofty goal, despite ending a year still struggling from a massive stock crash that saw a third of its value wiped off in a single day. Clearly an immature games developer, it’s not easy to see where the company goes from here.
As of January 2023, Netflix is still operating around $100 per share lower than last year’s February high but all the charts trend upwards. This is despite continuing with a business practice that many feel is prohibitive, i.e. cancelling popular shows. New CEO Ted Sarandos wasn’t too sympathetic towards fans when discussing the most recent cuts, suggesting that none of them was actually popular at all, as covered by ScreenRant.
So confusing are Netflix’s business practices that the GameRant website intimated the company might use cancelled TV IPs to flesh out its gaming catalogue. The recently canned Warrior Nun serves as a good example, being a story based around technology and combat. Its almost perfect audience score on Rotten Tomatoes does seem to make a mockery of Sarandos’ comments too.
A Golden Goose
Of course, the public’s appreciation doesn’t always make for strong sales, more subscribers, and/or a gift of ad revenue so we may never know what really led to the termination of Warrior Nun. As for gaming, Netflix has taken an equally opaque approach to its offering by buying up cancelled mobile apps (and a handful of studios) and providing a few hyper-casual titles to existing subscribers.
On that latter point, Netflix seems to have found a golden goose. Defined as a collection of match-three titles and farming sims, the casual market is one of the most lucrative areas in entertainment. Even outside conventional gaming, these kinds of pick-up-and-play experiences tend to dominate where a hardcore interest isn’t really necessary, such as among players of casino games.
One of the most popular casino experiences currently available, the Starburst slot takes its cues from gem-collecting apps like Bejewelled and Candy Crush. This simple game is described by the NetBet website as having an “electric” design that melds intergalactic artwork with shiny gemstones. Most importantly, it can be played in cycles of just a few seconds.
Burned Investors
Unfortunately, with its recent promise met, Netflix now seems to be chasing something rather riskier – cloud gaming. Netflix management announced in October last year that it was brainstorming a PC-based product that would allow subscribers to play games without worrying about the hardware. The LA Times notes that Google, Amazon, and Disney have all failed at what Netflix is now trying to achieve.
So, how can Netflix succeed where other giants have fallen? It’s unlikely that it can. The gaming industry is especially difficult to crack and, by placing its games behind an increasingly punitive paywall, Netflix’s new plans already lack any mainstream appeal. It also claims to have no interest in profiting from the games, stripping out microtransactions and other fees.
Overall, while it may be designed to keep people on the app for longer, Netflix Gaming sounds like a cash sink for the company, rather than something for burned investors to get excited about.