Now that Netflix is making a play for the gaming industry, we examine emerging patents and technologies, potential business models, and more. Plus, does this mark an OTT-to-gaming race in the entertainment industry?
We have to admit, it was not too much of a surprise that Netflix is diving into gaming. After all, the company made the transition from a DVD rental company to a top streaming service – so leaving the door open to interactive content was inevitable.
Think about it: in a way, the California-based company has long been testing gaming with ‘choose your own adventure’ content through its core service. Black Mirror: Bandersnatch, Minecraft: Story Mode and The Unbreakable Kimmy Schmidt: Kimmy Vs The Reverend seemed to be testing fields for interactive content without the streaming service meandering too far off course and without hinting too obviously at gaming ventures.
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It is early days, but this expansion seems to try solve the problem of the company’s ongoing sign-up slump (5.5 million subscribers gained through the first six months of 2021, indicating Netflix’s weakest first-half performance since 2013).
The first three months of the COVID-19 pandemic saw enviable success; Netflix reached close to 16 million subscribers. But the pandemic and lockdowns still saw the gaming industry mammoth business, so naturally, Netflix was not satisfied with being ‘just another OTT’ in a fast-saturating entertainment world.
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The company issued a public statement recently, “We are also in the early stages of further expanding into games, building on our earlier efforts around interactivity (Black Mirror: Bandersnatch) and our Stranger Things games. We view gaming as another new content category for us, similar to our expansion into original films, animation and unscripted TV.”
During a 2021 investor meeting, Greg Peters, Netflix’s Chief Product Officer, explained he is keen for the first phase of games to be tied to their most popular titles. Past ventures include IPs such as Stranger Things for video games, with the first launched on iOS and Android back in 2017, followed by the console-compatible Stranger Things 3: The Game for PlayStation 4, Xbox One and Nintendo Switch.
So we are likely to see other successful titles such as rom-com trilogy To All The Boys as a quirky role-playing game, or even Chris Hemsworth-starrer Extraction get adapted into a first-person shooter similar to Call Of Duty. Members are also keen on the international titles to get ‘gamified’, such as Spanish-language crime series La Casa de Papel or Money Heist and Hindi-language crime series Sacred Games.
For years now, Netflix has been trusted with video games-to-screen adaptations, such as Resident Evil, Castlevania, The Witcher and Dragon’s Dogma. They also started adding to their marquee remakes of classics such as Masters of the Universe: Revelations, that would make for great games where Netflix may co-develop games with existing film studios.
What about a console?
But given Netflix’s service seems to centre on the television itself, it is natural to wonder if the company will release a controller. I feel this may not be the case; the company does not feel the need to compete with existing console giants such as Xbox and Sony PlayStation.
So does that mean Netflix may push out a console, too? This is highly unlikely as CEO Reed Hastings seems to enjoy the ‘wherever you go, Netflix will follow’ ethos; so we may see a subscription-based model similar to Google’s now-dormant Stadia, Xbox Cloud and Apple Arcade where games are locally downloadable and playable on a device, such as a smartphone, laptop or tablet.
Netflix confirmed in their statement, “Games will be included in members’ Netflix subscriptions at no additional cost similar to films and series. Initially, we will focus on games for mobile devices.” Mobile-first opens up the type of technologies used in games: more Augmented Reality games, battle royale-esque games similar to the PUBG and Fortnite where members can ‘team up’ in an massively multiplayer online (MMO) setting, and ‘on the loo’ games too.
However, this does not mean Netflix will not bump up their existing subscription rates once the games (literally) begin.
Adaptive Streaming, new patents
The entertainment company – do we still call it a streaming service? – is known to prioritise technological innovations for uninterrupted play. Over the years, it has proven that its technology can be converged with other mediums, such as video games, video conferencing and more.
So we can certainly expect Netflix’s patented Adaptive Streaming technology to be employed heavily in the gaming experience, especially given the company will be dipping into mobile gaming first. This may be based on the success of its existing mobile-only subscription plan that started in India, where according to a Federation of Indian Chambers of Commerce and Industry 2019 report, Indians spend 30% of their phone time and over 70% of their mobile data on entertainment alone.
So how does this work? While the average bandwidth and round trip time supported by a network are well-known indicators of network quality, other characteristics such as stability and predictability make a big difference in video streaming. Adaptive Streaming algorithms are responsible for adapting which video quality is streamed throughout playback based on the current network and device conditions in real time. That said, the resulting technology responds to network drops and rises by leveraging Machine Learning to achieve stability while playing content – meaning fewer connection glitches and playback delays in responsiveness to play control.
Other technologies in development are also being patented by Netflix. As of June 29, 2021, Netflix has filed 11,048,660 streaming patents (excluding DVD patents) since 2012. Just in the past two months, Netflix filed three patents that could be geared to optimising their platform for gaming content, if and when approved: ‘Techniques for modifying a rules engine in a highly-scaled computing environment’ (June 15), ‘Multimedia content steering’ (July 20), and ‘Efficient computer-implemented techniques for managing graphics memory’ (July 20). Also ‘Temporal placement of a rebuffering event’ (June 1) could be an innovation upon the existing Adaptive Streaming tech I discussed earlier.
A new competition of OTTs
But we should remember that Netflix is not the one to claim ‘first’ in this expansion to video games — maybe ‘first of its kind’, if we are pushing it.
Back in 2014, Amazon acquired video-game streaming site twitch for US$970 million, and recently, Twitch announced changes to its subscription model so that subscribers on the video game streaming platform can look forward to subscription pricing that is adjusted for where they live. Amazon Games which leverages Amazon Web Services (AWS) and Twitch has already released a groundswell of content: its new massively multiplayer online (MMO) game New World has already overtaken the popularity of Activision’s Call of Duty: Warzone. Amazon Games also announced the opening of a development studio in Montreal, Canada. This all comes under their Prime Gaming model — not available in India but we may see that change soon.
Disney is already strong competitor given the breadth of Marvel and Star Wars content at their disposal, as well as various gaming studios working simultaneously on games. Somewhat the tortoise of the race is Apple Arcade — not a huge competitor (then again, the company has not discussed official numbers).
Sit tight for the next few years, we could bear witness to a new competition of Over-The-Top (OTT) services expanding into interactive entertainment.
Netflix is right to strike while the iron is hot and they have to move fast as; the evidence continues to pile up that they could make for a great games developer. Despite this being early days, we could see the first slew of games come around as early as 2022. Who knows, maybe next year’s E3 will feature a Netflix segment or the company’s next Geek Week festival could have a whole day dedicated to games launched by OTT companies.
So, let the games begin.
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