Recent reports that Netflix is looking into hiring a video games developer touches upon an interesting growth strategy emerging from streaming services seeking growth: can bundles of gaming apps with streaming video services capture growth that streaming services cannot reach?
That strategy is emerging in two different ways:
Netflix is clearly making moves on the former path. The latter path is being pursued by Apple, which bundles Arcade with its apps and is now allowing Verizon to offer Arcade as part of a bundle for wireless subscribers. This is the same bundle that offers Apple Music, Disney+ and discovery+ as add-ons. Similarly, Amazon also offers Prime Gaming and streaming service Twitch to Prime users.
As for every other streaming service, it is an open question of how or even if gaming fits into their respective growth strategies. For legacy media companies, in particular, owning a gaming company has not been a successful strategy in the past. In the recent WarnerMedia-Discovery merger, WB Interactive was split up.
So, bundling with gaming apps seems to the most likely outcome for streaming video services. Notably, this is not a visionary outcome for either Netflix or its competition. Rather, it seems like a logical, iterative, if not more conservative approach than its earlier growth strategies. That suggests that the streaming marketplace envisions gaming as a bundle component that could iteratively help streaming services find more growth. But no one yet seems to have a vision for how or why bundles will succeed.
An iterative approach is surprising in Netflix’s case, but unsurprising for legacy media companies given their rocky histories in the video games industry.
Netflix has long been toying in the grey area between streaming and gaming with its interactive video efforts. The last big interactive video success from Netflix wasBlack Mirror: Bandersnatch, which won an Emmy. It has released other ...