Netflix launches game streaming trial: but how does it avoid a Stadia repeat?

Netflix launches game streaming trial: but how does it avoid a Stadia repeat?

Netflix is rolling out a limited beta test to make streaming video games playable on TVs and PCs.

A “small number” of users in the UK and Canada are now able to stream games on select TVs beginning today, and will be able to access games on PCs and Macs through Netflix.com on supported browsers sometime in the next few weeks.

TVs with initial access to Netflix games include Amazon Fire TV, Google’s Chromecast, LG TVs, Nvidia Shield TV, Roku devices and TVs, Samsung Smart TVs, and Walmart ONN.

Two games will be available as part of the beta, Oxenfree (developed by Night School Studio, which Netflix acquired in 2021), and Molehew’s Mining Adventure, a gem-mining arcade game.

PC users will be able to play using a mouse and keyboard, while TV users can use their phone as a controller.

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The streaming leader has sought to quickly expand its gaming footprint to add value to its current subscription offer and capitalise on growing consumer and commercial interest in gaming.

The company first added mobile games to its offering in 2021, and in 2022 it launched its first internal game development studio, acquired a number of other formerly independent studios, and partnered with AAA developer Ubisoft to create three Netflix-exclusive mobile games.

“Our goal has always been to have a game for everyone, and we are working hard to meet members where they are with an accessible, smooth, and ubiquitous service,” said Netflix VP of games Mike Verdu in a blog post. “While we’re still very early in our games journey, we’re excited to bring joy to members with games.”

While AAA games are reportedly in development for Netflix, the streamer has thus far been content to target more casual mobile gamers, rather than hardcore console and PC gamers. By making a foray into non-mobile media, Netflix is signalling a desire to increase its appeal to a wider audience.

The risk Netflix faces is that it could follow Google in wasting capital on a failed cloud gaming service. Launched with significant hype in 2019, Google Stadia was officially shut down in January following poor user acquisition.

However, Netflix is taking a different approach. For one, Netflix is investing heavily in internal game development and has acquired a larger suite of studios that have already produced a number of games. This is somewhat distinct from Google, which though it initially sought to develop games in-house and acquired Canadian developer Typhoon Studios, insufficiently invested in and ultimately abandoned its plan to support game development less than a year-and-a-half later.

While hosting third-party games is an option Netflix is likely to continue pursuing, developing exclusive properties is important to draw market share, as gamers could otherwise play non-exclusive titles on more established consoles with superior controller settings and more reliable performance.

Notably, unlike Stadia, Netflix has also thus far not charged extra for access to its full suite of games. Instead, the strategy  appears to use games as a value-add for current and potential subscribers, a more popular approach that could allow the streamer additional pricing flexibility assuming it continues to raise subscription prices in the future.

Games could also someday be a significant driver of advertising revenue for Netflix, as in-game advertising technology has matured in recent years to the point that brands are feeling increasingly comfortable buying in-game ad inventory.

There are no guarantees in gaming, and streaming games has proven to be a tough nut to crack compared to more established console and PC gaming. But with 3 billion gamers out there the market is too big an opportunity to pass up, especially for a company needing to diversify its content offering as it faces continued competition from an oversupply of alternative TV and movie streaming services.

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