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Slowing Netflix sees hope in gaming
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Netflix is facing a formidable challenge as it expands into video games to keep the attention of customers in the increasingly competitive world of streaming television.
The streaming television leader detailed its plans to move into games in its latest update confirming cooling growth even as it spins off hit shows.
Analysts said the move is not aimed at disrupting the expanding gaming market but keeping its own viewers interested by offering new content.
鈥淓ntertainment and tech brands are adding gaming because it is adjacent to their video products, which makes gaming a somewhat natural extension of what they already do,鈥 said eMarketer analyst Ross Benes.
鈥淎dding gaming allows them to suck up more of people鈥檚 time and become further embedded within their customers鈥 daily habits.鈥
Benes reasoned that Netflix games will give people impetus to stick with the service but are unlikely to significantly boost subscriptions.
Loup Ventures manager partner Gene Munster called Netflix鈥檚 action a 鈥渟mart move to retain and inch up paid subscriptions鈥 noting there are some 2 billion gamers worldwide.
Wedbush Securities analyst Michael Pachter expected the Netflix move to have 鈥渮ero鈥 impact on the game world.
鈥淲e view the foray into games as an acknowledgement by management that the video content pipeline is flowing more slowly, with content costs continually on the rise,鈥 Pachter said in a note to investors.
鈥淲e also view games as a 鈥榮hiny new object鈥 that might distract investors from what we perceive to be Netflix鈥檚 slowing growth.鈥
Chief product officer Greg Peters said during an earnings call that getting into video games will be a multi-year effort with Netflix starting small in the mobile games arena.
鈥淲e really see this as an extension of the core entertainment offering that we鈥檝e been focused on for the last 20 years,鈥 Peters said.
鈥淲e鈥檙e going to try a bunch of different games through a variety of different mechanisms to see what鈥檚 really working for our members.鈥
Netflix executives said they would play to the strengths of shows to create interactive fantasy worlds for fans, and that they are talking with game makers about licensing deals.
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