With a strong presence in the film and TV market, Netflix thinks that video games are the next profitable frontier and plans to set out to capture a niche in that space.
The company is reportedly looking to roll out video games on its platform sometime within the next year. Netflix isn’t building out a separate channel for the games; instead, they’ll appear alongside its other content. The good news for Netflix subscribers who also happen to be gamers is that the company’s plans don’t reportedly include an extra charge for the content.
That’s good news for some customers like Joel from New Jersey. In a ConsumerAffairs review of Netflix, he asserts that the platform’s “base content is never strong enough to justify its pricing.” With the addition of a whole new type of content, maybe signing up for an account may be more worth it to some people.
The company is starting this new venture from a position of strength. It hired Mike Verdu, the vice president of Facebook’s virtual reality and augmented reality content and previously the head of EA Mobile. In that position, he oversaw a portfolio of games that included titles like Star Wars: Galaxy of Heroes.
Moving into video games also gives Netflix a leg up on competitors like Disney and Amazon, which, for the moment, don’t have gaming as part of their lineup.
Are video games the next great frontier?
If you’re someone born with a joystick or controller in your hand, you’re probably thinking Netflix's move into gaming isn’t new. And you’d be correct -- at least historically speaking. However, Statista reports that video games are experiencing a renaissance, and the market is only at the beginning of its newest revolution.
Researchers say revenue in the video games segment is projected to reach over $154.6 billion in 2021 and continue to grow at a rate of 9.28% over the next few years. Those numbers speak volumes to content services like Netflix. The company also has to be licking its chops over future forecasts.
The number of users in the video games segment currently sits at around 2.8 billion, and it’s expected to grow to 3.1 billion by 2025. If Netflix was successful in signing even a small percentage of the new users, it could be swimming in tens of millions of dollars in additional revenue each month.
“This feels like a significant event with broad ramifications across the video games landscape,” Citi analyst Jason Bazinet wrote in a note Thursday. He said Netflix’s move creates “obvious risks” for larger game developers and publishers.