🎮🕹️👾Why is Netflix betting big on the Online Gaming Industry?👀

Hi,

I'm Vipul, and welcome to the latest edition of Leeds1888, Issue-40. This week we got the highest open rate for our newsletter ever, almost 40%. I am sure the news on the revival of the film exhibition business must have gotten you interested in the newsletter !

If this is your first encounter with Leeds1888, know that we specialise in capturing the pulse of media and entertainment, delivering valuable insights. Join our community by subscribing and spreading the word among your network!

This newsletter will cover the following sections:-

• Top OTT Shows & Movies (don’t miss the new entrants)

• Why is Netflix betting big on the online Gaming Industry?

• Weekly Box Office figures

• Weekly Puzzle.

• News Buzz

Top watched OTT Shows this week

Top Releases this week

Why is Netflix betting big on the Online Gaming Industry?

“It is not the strongest or the most intelligent who will survive but those who can best manage change”-Leon C. Megginson

The performance of Netflix stock in the recent past as compared to the Giants like Comcast, Disney, Warner is reminiscent of the above quote.

Having a technology first approach and agility to evolve with the changing techno-cultural environment has helped Netflix grow in leaps and bounds in the past years. One can get a sense of the future proofing strategy of Netflix by the steps they have taken recently. Netflix is now venturing into Cloud Gaming Space !

It first announced its move into the cloud gaming industry back in November 2021, and it is now starting to test its games in the UK on televisions and computers as it looks to grow the service. While the soft launch has already happened, the big question- Is it just an experiment or is Netflix really going to take a deep dive into the online gaming world?

What is Netflix Offering?

Netflix is now streaming video games ( limited testing) directly to devices, eliminating the need to download entire games or own a powerful console or computer that’s capable of running the games natively. This streaming is currently compatible with specific television models, as well as Windows PCs, macOS computers, and mobile devices. It's worth noting that gaming consoles such as Microsoft's Xbox Series X and Sony's PlayStation 5 are not included in the list of supported devices at this time.

Out of the two games currently offered under streaming currently in India and Canada, the one is Oxenfree, an eerie narrative adventure game from Night School Studio which Netflix acquired in 2021 and the second one is a gem-mining arcade game called Molehew’s Mining Adventure.

It’s important to note that Netflix already has a library of 71 downloadable games that is available for some time now. But the focus is around cloud based games.

Netflix Games are accessible as regular apps on the Apple App Store and Google Play Store, and are installed on your smartphone or tablet independent of the Netflix app. That said, you can use the Netflix app on iOS or Android to find games, and you'll be redirected to the app marketplace to download the app. As of now, the Netflix app does not let you play any of the games within it, and is only used to help you discover titles of interest.

Reasons behind Netflix's Foray into Online Gaming

1. Online Gaming is a Big & Growing Sector - The gaming industry boasts significant scale, as evidenced by the data from the United States. A staggering 212.6 million Americans engage in gaming for at least one hour per week, and it's important to note that gaming is not solely the domain of children; 62% of adults aged 18 and above and 76% of individuals under 18 participate in video gaming in the United States. In terms of gaming platforms, 64% of gamers opt for mobile devices, while 45% of those surveyed choose computers as their gaming platform of choice. On a global scale, it is projected that the number of gamers will reach between 2-3 billion by the year 2025. Notably, Sony's PlayStation and Microsoft's Xbox have already popularized online cloud-based gaming, and with the proliferation of faster internet connections and more powerful processing devices, the gaming industry is poised for even more rapid growth in the near future.

2. GenZ is losing interest in Streaming Platforms- Gen Z's engagement with streaming platforms is dwindling. The upcoming generation of viewers is well-versed in platforms like YouTube and TikTok, where they swiftly browse content in bite-sized, user-generated video formats. In certain markets, research firm Ampere suggests that, for the first time, the most dedicated Netflix users are likely to be individuals aged 24 to 44, rather than those in the 18 to 24 age group. This shift raises concerns for Netflix, and it aims to captivate the attention of this demographic through its foray into gaming.

3. Netflix understands user Choices- Netflix's insight into the preferences of Gen-Z has been enriched by the success of hit series like Squid Games and Black Mirror. This understanding has led the company to launch two in-app games inspired by Stranger Things, currently exclusively available in Poland as part of an initial trial.

Competitive Landscape

Netflix is not the pioneer among streaming services offering games. Google Stadia, Xbox Cloud Gaming, and PlayStation's PS Now have already paved the way for streaming games directly to consoles, phones, or computers. So, what distinguishes Netflix, and how does it plan to outshine these industry giants with their established presence?

To begin with, the global online streaming games industry is currently valued at $12 billion and is experiencing a steady growth rate of 10.44% CAGR. At this rate, the industry is projected to reach approximately $20 billion by 2030, with an estimated user base of around 2 billion. In order to cultivate a devoted audience and outperform the competition, Netflix appears poised to develop games that serve as extensions or gamified adaptations of their popular shows. Additionally, Netflix may explore collaborations with major players like Sony to enable cross-platform streaming of its games.

Viewpoint

Gaming not only boasts a substantial market size but also comes with significant development costs. I believe Netflix's venture into live streaming games could serve as a catalyst for Gen Z to explore its content library and potentially become long-term customers as they age. Nevertheless, the gaming landscape is rapidly evolving, driven by advancements in AR, VR, and AI technologies. Netflix will need to make substantial and ongoing investments in creating future-proof games that captivate gamers' interests.

Additionally , Netflix's storytelling prowess could significantly benefit from the shift towards transforming NPCs (Non-Playing Characters) into AI-Driven Player Characters. The pivotal question revolves around the extent of dedication and long-term investment that Netflix is prepared to allocate to this domain, as it will ultimately dictate the company's standing in the continuously evolving gaming industry of the future.

Be sure to tune in next week as we embark on an in-depth exploration of the realm of NPCs.

Box Office Collection Report

Quiz Time

Q- Who is the first ever Video game Live Streamer in the world?

Hint- This person from Japan won a Sony Playstation and played for three straight days livestreaming the games.

Last Week’s QnA

Q- In which year the first Multiplex in India opened and which part of the country did it open? 🍿🎬

A- PVR Anupam in Saket, Delhi

News Buzz!

• Apple buys Swedish classical record label BIS Records to strengthen its music portfolio. Read more here.

• Warner Bros Discovery expects an earnings hit of upto $500 million as strikes drag on. Read more here.

And with that, it's a wrap on this edition of Leeds1888.

Vipul