Netflix’s narrative is now reaching what Hollywood scriptwriters would call the confrontation point, where everything changes and hard choices must be made.
It’s not just the backlash and employee walkout the company faced this week over the Dave Chappelle special, which asked tough questions about Netflix’s dual commitments to diversity and artistic expression. Netflix’s crossroads also became apparent in the company’s third-quarter earnings report released Oct. 19.
While Netflix’s quarterly subscriber growth beat projections—adding 4.38 million versus the 3.5 million expected by the company, thanks in part to the success of Korean hit Squid Game—the majority of that growth came from the Asia-Pacific region (2.2 million new subscribers). That was followed by Europe, the Middle East, and Africa (1.8 million), with growth in the US, Canada, and Latin America lagging far behind.
North American subscribers have driven Netflix’s success over the last decade. With growth in the region flagging—currently at 74 million subscribers, up just 70,000 from last quarter—the company appears to have decided to meet its confrontation moment by developing video games based on Netflix content.
“Imagine three years from now, and some future Squid Game is launching and it comes along with an incredible array of interactive gaming options, and it’s all built into the service,” Netflix co-CEO Reed Hastings said during the earnings call.
Netflix will use its original TV and film content to seed its video game initiatives
The new focus on gaming was hinted at last month when Netflix acquired game developer Night School Studio, which followed the company’s announcement earlier this year that it planned to launch free mobile games for its existing streaming customers.
“We’re going to take a bunch of different approaches to try and be successful in [the gaming] space, just like we did in movies and TV shows,” Netflix chief operating officer Greg Peters said. “One of the ways to accelerate that process is when we find the right opportunities through acquisition, and that’s what we did with Night School…the core of what they’ve done is to try and explore story and narrative essentially as the central game mechanic.”
Long-time Netflix viewers got a taste of one of the gaming possibilities on the platform when it used the Black Mirror episode “Bandersnatch” to introduce a “choose your own adventure“dynamic.
Delving deeper into the worlds of original Netflix series like Squid Game, Stranger Things, and The Witcher through gaming could eventually allow the company to more broadly compete with the likes of Disney and others in the realm of interactive content.
“Disney is still ahead of us in some of those dimensions of putting that whole experience together,” Hastings said. “But we’re making progress, and it’s so exciting over the next three to five years, kind of closing that gap and [with] hopes to pass them on that spectacular all-around experience.”