Netflix’s Expansion into the Video Game Industry

In recent years, video-on-demand streaming has become integral to the processes of production, distribution, and consumption of audiovisual media worldwide. For over two decades, Netflix has been considered one of the leading streaming service providers in the industry. However, over the past few years, Netflix’s dominance in the video streaming industry has been weakening. The company’s decision to pull its services from Russia, an increase in the prices in the US and Canada, account sharing, loss of content from various major channels across the US, and the constant and growing competition from the likes of YouTube, HBO Max, Amazon Prime, and Disney+, are among the primary factors contributing to this development. In the first and second quarters of 2022, Netflix lost nearly 1.200,000 members, which represents the most significant subscriber decline that the company has ever experienced since it began streaming to subscribers in 2007. In November 2021, Netflix launched its first mobile game efforts in an attempt to diversify its content offering and keep hold of its existing user base of 231 million members worldwide. The company’s strategy to enter the video game industry revolves around leveraging Netflix’s established brand equity to extend its services beyond its native content and minimise the risk of losing even more subscribers. The service’s prospects of reaching a wider, more diverse audience and purchasing market will significantly increase if a broader spectrum of products in multiple media is available to the platform’s subscribers. By successfully expanding its market into the mobile games industry, Netflix can get a firmer hold of its existing customer base and attract new audiences to its services. The strategic steps that Netflix has taken up to this point to ensure that its push into gaming will not be in vain include exploring interactive storytelling through projects such as Bandersnatch (Slade, 2018), developing “casual games” that account for the presumption that it is challenging for individuals without previous experience to step into the gaming world for a first time, acquiring several game developers with expertise in the field and assembling its own team of accomplished professionals, and adapting Netflix’s recommendation engine that underpins the selection of movies and television shows to Netflix Games. Currently, Netflix’s game catalogue consists of licensed games, i.e., games based on an existing intellectual property licensed by the game’s publisher, games created through the collaborative efforts between the streaming service and acquired game developers, and Netflix Games, which is the equivalent of Netflix Originals but for games. Through partnerships and acquisitions, the streaming giant ensures that its catalogue consists of a wide variety of games that will serve different members’ tastes and preferences in games.