Netflix is getting into the video games market and it will be a free add-on to its member subscriptions, You heard it right, games on the service will be free. The company said in a shareholder letter released before its Tuesday earnings call.
The letter said Netflix is still in the “early stages of further expanding into games,” the streamer’s offerings will first be “primarily focused on games for mobile devices.”
“We view gaming as another new content category for us, similar to our expansion into original films, animation and unscripted TV,” the shareholder letter said. “We’re excited as ever about our movies and TV series offering, and we expect a long runway of increasing investment and growth across all of our existing content categories, but since we are nearly a decade into our push into original programming, we think the time is right to learn more about how our members value games.”
Netflix COO and chief product officer, Greg Peters, said the company’s intentions for its gaming service would be to extend Netflix’s IP, create standalone games — some of which could be spawned into a series or movie— and license games to help “increase the volume” of Netflix’s library.
“It’s a multi-year effort. We’re going to start relatively small. We’ll learn, we’ll grow,” Peters said. “Our subscription model yields some opportunities to focus on a set of game experiences that are currently underserved by the sort of dominant monetization models in games. We don’t have to think about ads, we don’t have to think about in-game purchases or other monetization, we don’t have to think about per-title purchases. Really, we can do what we’ve been doing on the movie and series side, which is just hyper, laser-focused on delivering the most entertaining game experiences that we can.”
It’s not immediately clear when the company plans to launch its gaming offerings. But last week, Netflix hired Mike Verdu, a former Facebook and Electronic Arts executive, as its new VP of game development.
“We compete with (and lose to) Fortnite more than HBO,” the January 2019 letter said. “There are thousands of competitors in this highly fragmented market vying to entertain consumers and low barriers to entry for those with great experiences. Our growth is based on how good our experience is, compared to all the other screen time experiences from which consumers choose. Our focus is not on Disney+, Amazon, or others, but on how we can improve our experience for our members.”
Netflix co-CEO Reed Hastings also described the challenge as “winning time away” from other activities and competitors. “Instead of doing Xbox or Fortnite or YouTube or HBO or a long list, we want to succeed and provide a more enjoyable experience: no advertising, on-demand, incredible content,” Hastings noted.