Netflix
Netflix recently announced that they are moving into the gaming space. They have hired former Electronic Arts (EA) and Oculus executive Mike Verdu to oversee their gaming push.
Their initial efforts will be focused on mobile games and they plan to offer these together with existing Netflix subscriptions at no extra cost. At least for now.
This isn't exactly a secret, as they have hinted at their interest in games before. They have experimented with more interactive TV via their Black Mirror Bandersnatch and CEO Reed Hastings mentioned that they "compete with (and lose to) Fortnite more than HBO”. I really don't know if he was just dissing HBO here. More recently, they extended their contract with producer Shonda Rimes to include games and VR content.
Kotaku noted that they are in no hurry to monetize games and perhaps intend to leverage their existing IP such as Stranger Things. It looks like their intention is to keep existing users within their ecosystem, instead of wandering off to Disney+ or Fortnite.
Amazon
This brings to mind another company that tried to do the same: Amazon. In this article from Bloomberg, it detailed the supposed issues which have (so far) denied Amazon Games Studio bragging rights to a successful game launch.
- appointing a Amazon long time employee, Mike Frazzini, to run the studio but he does not have any game development background. According to the article, this is based on the Amazonian orthodox thinking that a successful executive in one area of the business will be successful elsewhere
-he hired big name experienced staff from established game studios but did not take their advice.
-the culture at Amazon clashes with the culture at a game development studio. Amazon is famously data driven, and memos are necessary to get decisions approved. Game development depends on experimentation to find out what is fun (or not), often by making small tweaks/alterations.
There were other more "operational" decisions that may have contributed to the lack of success.
-although new experienced hires were lured over by pay packages and better working hours, some of the incentives were not tied to commercial/critical game success. For example, stock options are vested based on time spent at the company. This incentivizes staff to get in line with senior management, even when they disagreed with decisions.
-some goals were contradictory. For example, senior management directive was that a game should accommodate as many players as possible, but also fun to play solo. According to experienced developers, this is a surefire way to delay a game launch.
-they decided to build their own game engine, Lumberyard, instead of using established engines like Unity or Unreal. According to Bloomberg, Lumberyard posed some challenges to the developers and were not as good as Unity/Unreal.
Closing thoughts
By no means does this suggest that Netflix will fail at games. It looks like execution was the stumbling block for Amazon and Netflix may avoid these missteps but will probably face their own unique challenges.
Furthermore, Netflix is focusing on mobile games, which is different from the AAA PC/console titles that Amazon wants to produce. The development cycle for mobile is shorter, whereas AAA games take years. This may enable Netflix to launch games earlier and use feedback from gamers to improve. Given how data driven they are, this may provide a treasure trove of user preferences, so as to better customize future offerings.
Neither does this mean Amazon will continue to fail at games. Their latest attempt, the MMO New World, is due to launch on 31August on PC via Steam and is currently in closed Beta. Although there is disturbing news that it is killing high end graphics cards, given their commitment to the goal, they will probably learn and improve on their mistakes.
Stepping back and looking at the big picture, the more significant impact would fall on the games industry. The data from Netflix' customers offer a glimpse into consumer behaviour and affect how new games are developed as they adapt to these new insights. Will the entrance of the streaming giants into the space open up more audience (customers) to gaming, expanding the pie? There will very likely be existing pockets of Netflix customers who have never played a game. Can you imagine your parents picking up a MMO like Grandma Curry?
By no means does this suggest that Netflix will fail at games. It looks like execution was the stumbling block for Amazon and Netflix may avoid these missteps but will probably face their own unique challenges.
Furthermore, Netflix is focusing on mobile games, which is different from the AAA PC/console titles that Amazon wants to produce. The development cycle for mobile is shorter, whereas AAA games take years. This may enable Netflix to launch games earlier and use feedback from gamers to improve. Given how data driven they are, this may provide a treasure trove of user preferences, so as to better customize future offerings.
Neither does this mean Amazon will continue to fail at games. Their latest attempt, the MMO New World, is due to launch on 31August on PC via Steam and is currently in closed Beta. Although there is disturbing news that it is killing high end graphics cards, given their commitment to the goal, they will probably learn and improve on their mistakes.
Stepping back and looking at the big picture, the more significant impact would fall on the games industry. The data from Netflix' customers offer a glimpse into consumer behaviour and affect how new games are developed as they adapt to these new insights. Will the entrance of the streaming giants into the space open up more audience (customers) to gaming, expanding the pie? There will very likely be existing pockets of Netflix customers who have never played a game. Can you imagine your parents picking up a MMO like Grandma Curry?
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