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STRANGER THINGS HAVE HAPPENED

Netflix is seriously flirting with a push into video games

Stranger Things
Netflix
Stranger Things
  • Adam Epstein
By Adam Epstein

Entertainment reporter

Published

Netflix has never wavered from its core proposition as a provider of on-demand TV and movies. But, over the years, it has quietly flirted with other media like video games. And now that flirting is getting louder.

The streaming company is looking to hire an executive to lead an “expansion” into gaming, the Information reported today. The report added that Netflix has spoken to “veteran game industry executives” about boosting its investment in the space. It’s unclear what exactly that expansion would entail, but one possibility, according to the Information, would be a game subscription service like Apple Arcade.

In 2017, Netflix started releasing interactive TV series and films that allow viewers to click on their screens to affect character decisions and plot lines. It also licensed its popular Stranger Things series out to video game developers. But the company’s recent attitude toward games suggests it sees a much bigger opportunity ahead.

Netflix’s expansion into what it calls “interactive entertainment” is part of the company’s continued push into varied forms of programming, a Netflix spokesperson told Quartz.

Why Netflix is interested in gaming

Video games are, technically, interactive entertainment, so it’s possible Netflix could enter the space without straying too far from what it does best. And, perhaps, the timing is right: Video game sales are booming, in part due to the pandemic, but also because they’re what Generation Z consumers like the most.

Netflix might be in the right position to invest. It said it no longer needs to borrow money, and expects to have positive cash flow in 2022 after years of being in the red. Unlike Amazon, whose corporate culture has proven to be at odds with the creativity a successful gaming division demands, Netflix—known as a hands-off, creator’s paradise—might have the requisite philosophy. Games would be another way to capitalize on the company’s 200 million global subscribers, many of whom are young.

“There’s no doubt that games are going to be an important form of entertainment and an important sort of modality to deepen that fan experience,” Gregory Peters, Netflix’s COO and chief product officer, said on a recent earnings call (pdf). “So we’re going to keep going.”

But there are already many strong players in the space, from Microsoft to Sony to Apple and others. Netflix would again find itself as the newcomer hoping to disrupt the industry—just as it did a decade ago in TV and movies. The company might struggle to gain acceptance by developers. Video games are also hard to make. To do them right, Netflix would have to devote real resources over a long period of time.

Ultimately, though, Netflix’s apparent push into gaming could just be another form of marketing for its content, and nothing more. The company is already making moves into podcasts for that exact reason. Podcasts, games, consumer products, and brand partnerships are all areas Netflix has dabbled in for the purpose of building franchises around the company’s intellectual property.

In 2019, Netflix said in a letter to shareholders, “We compete with (and lose to) Fortnite more than HBO.” At the time, that was taken more as shade directed at HBO than it was a compliment of Fortnite. But, two years later, maybe Netflix really is getting tired of losing to Fortnite.

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