Netflix ramping up its gaming offerings: What more can be done for breakthrough?

With the recent announcement of former God of War art director Raf Grassetti joining Netflix to help develop its new original IP AAA game alongside Halo veteran Joseph Staten, we know that the streaming giant is ramping up its gaming offering since its launch of Netflix Games in November 2021. So far, Netflix has released 55 games and has unveiled plans to introduce 40 more games this year.  

According to his personal Twitter and Instagram, Grassetti said he is really excited to build a team and to work with the amazing Joseph Staten, Jerry Edsall, and Chacko Sonny to bring a new world to life. “Appreciate all the love over the last couple of weeks. Making games is what I love to do and I'm not going away anytime soon,” he added.

His Instagram post has garnered over 31k likes and has drawn positive sentiments, as many netizens said that they look forward to the future work of the game maker, while some said they are surprised that Netflix is investing in gaming, a check by MARKETING-INTERACTIVE saw.

Netflix’s decision to tap into the gaming industry has perhaps surprised many global viewers, but industry players MARKETING-INTERACTIVE spoke to believed this is a strategic move to diversify its offerings and tap into new markets.

Karlye Chan, director, programmatic and activation partnership of media agency Assembly said that with other OTTs such as Disney+ and HBO stepping up to drive more localised in-house productions, Netflix’s entry into the gaming landscape extends its audience pool, which has promising potential when combined with a strong monetisation plan.

Agreeing with Chan was Ranga Somanathan, co-founder at RSquared Global Ventures and former CEO of Omnicom Media Group, who also said it’s a strategy to not only enrich the experience amongst its current subscriber base, but also to create a diversified entertainment experience that could potentially attract younger customers to the platform.

The strategy seems right, what needs to be seen is how they execute the strategy.

In fact, Netflix has experienced a rough year as some of its decisions including introducing ads and cracking down on account sharing had led to a loss of 200,000 subscribers in the first quarter of 2022, and almost a million subscribers in the second quarter, according to The New York Times.

As such, gaming can be an opportunity for Netflix to grow its business and to stay competitive among the keen competition, said Penny Chow, managing director, Hong Kong and Taiwan of media agency Society.

Does turning to gaming support Netflix’s long term growth? 

It is not always easy for brands or businesses to explore new revenue streams to support their long-term growth. Usually it takes time and a bit of luck, especially within the notoriously competitive gaming market, according to Tim Durgan, VP, strategy and insights, APAC, Assembly.

Meanwhile, Society’s Chow said that it is not possible to directly apply the winning formula on video streaming business to gaming as the gaming industry is cluttered with fierce competition, and user behaviour is very different from watching TV shows and movies, which consumers can sit back and watch passively while games require interactions and engagement.

Agreeing with Chow was Neal Chung Yee, head of studio of gamification agency Shadow Factory, who said that the current way Netflix executes in gaming couldn't support Netflix's long-term growth.

They seem to be used just for secondary advertising from game to show, but nothing from the show to the game. 

He added that gaming shouldn't just be viewed as a way to get more people to watch a show. Instead, it should be an additive experience that builds upon the show or a show that builds upon a game such as Arcane (based on League of Legends) and DOTA: Dragon's Blood (based on DOTA 2). “I was expecting more integration between the games and the shows on Netflix, but so far, they do not seem to have any integration,” he added.

How can Netflix improve its gaming offerings to lure back subscribers? 

Despite the challenges ahead, some industry players believed that the streaming giant could step up the game to elevate user experience, in an effort to lure back subscribers.

Assembly’s Durgan said Netflix needs to avoid the scattergun approach that has come to define gaming and try to focus on a few solid flagship brands in this space. "It has achieved this in its current content such as Stranger Things and Squid Game, but it needs to ensure it lands this in gaming...also it should not underestimate the vast differences in mentality and expectation between the sit-back TV audiences and the sit-forward gamer,” he added.

The key to improving Netflix’s content offering in video games is how it can tie these games to the movies series and intellectual properties it has created, said PHD HK CEO Antony Yiu. “If Netflix can start a spin-off game based on one of the popular series, the number of subscribers will grow overnight," he added.

It's all about collaboration and leveraging its database and recommendation engine to make it known to the user.

Apart from creating games based on popular Netflix shows and movies, Tony Ng, founder and creative director of digital agency DigiSalad, suggested Netflix to collaborate with renowned game developers to create exclusive titles, offer a diverse range of gaming genres to cater to different player interests and regularly update the gaming library with fresh content to keep users engaged.

Perhaps it’s too early to comment on the subscriber adoption of video games on Netflix, however, Somanathan saw the opportunity of stand-alone games leveraging the scale of overall platform subscription as well as spin offs from programming content that could enhance the engagement and lifespan of video content. “Production of quality gaming backed by solid marketing has the potential to create new demographic growth segments for Netflix,” he added.

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