San Francisco: In the increasingly competitive world of streaming TV, Netflix is facing a daunting challenge as it expands into the field of video games to keep customers’ attention.
The streaming TV leader provided details of plans to enter the gaming space in its latest update, confirming the cooling growth, even if the Silicon Valley giant divested the popular show.
Analysts said that Netflix’s move is not intended to disrupt the expanding game market, but to maintain audience interest by providing new types of content.
“Entertainment 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,” said eMarketer analyst Ross Benes.
“Adding gaming allows them to suck up more of people’s time and become further embedded within their customers’ daily habits.”
Benes believes that Netflix games will encourage people to stick to the service, but it is unlikely to significantly increase subscriptions.
Gene Munster, managing partner of Loup Ventures, called Netflix’s action “a wise move to retain and increase paid subscriptions” and pointed out that there are approximately 2 billion gamers worldwide.
Wedbush Securities analyst Michael Pachter predicted on Wednesday that Netflix’s move will have a “zero” impact on the gaming world.
“We 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,” Pachter said in a note to investors.
“We also view games as a ‘shiny new object’ that might distract investors from what we perceive to be Netflix’s slowing growth.”
Chief product officer Greg Peters said during an earnings call that getting into video games will be a multiyear effort with Netflix starting small in the mobile games arena.
“We really see this as an extension of the core entertainment offering that we’ve been focused on for the last 20 years,” Peters said.
“We’re going to try a bunch of different games through a variety of different mechanisms to see what’s really working for our members.”
Netflix executives said that they will use the advantages of the show to create an interactive fantasy world for fans, and they are discussing licensing deals with video game manufacturers.