Is Netflix Heading for Streaming Games and Virtual Reality?
In the past few years, Netflix has been trying to avoid the question of entering into the VR space, and have been taking baby steps in this direction of video games.
Yet recently, Netflix seems to have expressed interest in the development of gaming and virtual reality. The company appoint Mike Verdu, former vice president at Facebook head of AR/VR content, who had worked closely to bring content to Oculus headsets. During his time at Facebook, Verdu led several acquisition such as Beat Saber, Asgard's Wrath, Lone Echo and Echo Arena, Onward, and Population: One. Verdu left Facebook in 2019 during a time of a company restructure. Verdu was also former head of Electronics Arts Inc, the game studio behind popular games like Plant vs Zombies and Star Wars.
Netflix current has 200 million subscribers, which is way ahead of their competitions such as Amazon Prime Video and Disney. However, the company only added 4 million subscribers between January and March 2021, which is the smallest growth in the past four years. They were 2 million subscribers below their prediction for the first quarter of this year.
Could it be that Netflix is losing market share and their dominance over the market? Netflix Chief Financial Officer, Spencer Neumann, believes that since a good portion of the US population has been vaccinated, people are now moving to outside activities rather than watching Netflix at home.
Netflix's New Content Strategy
Perhaps interactive video games streaming may be a key factory to regaining the desired retention. Netflix have experienced with video game like content, producing programs based on games such as as DOTA-Dragon Blood, Minecraft, and so on. The company believes that video games are a major competition to streaming movies and shows, as there a significant overlaps for streaming and gaming.
Video games are still the biggest source of entertainment, with over 2.5 billion people in the world that are into gaming. The global gaming market is expected to grow from $159.3 billion to $300 billion by 2025. Meanwhile, global streaming revenues is just at $23 billion.
Netflix Chief Product Officer, Greg Peters, said in am earnings conference call that games are going to be an important part of Netflix's future content strategy. The company us aiming to figure out all the possible ways they can increase points of interaction with their subscribers.
Bloomberg reports that Netflix will offer games on its platform within the next year.
What could this mean for the future of virtual reality for Netflix?
Well, Netflix has been passively watching the VR industry for years. VR transports the viewer via headsets to a different location, the market is currently still trying to achieve success with the mass majority. Netflix executives have noted that the company would like to wait and see how virtual reality evolves before getting their feet wet.
With Netflix's latest move, perhaps this wait may be shorter than we first thought.