Netflix pursues stronger ties with the video gaming world
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Netflix pursues stronger ties with the video gaming world

Earlier this week, reports broke that video games were coming to Netflix’s streaming platform. Industry retailer GameStop’s share price tumbled by 7% - other gaming stocks dropped too – as the prospect of a disruptive giant entering their space played on investors’ minds. These reports, we now know, were wrong. Instead, Netflix is looking to deepen ties with the industry through a partnership with Telltale Games – a maker of multiple choice, narrative-driven games that often licenses hot creative properties (for example, the company has produced games based on The Walking Dead, Game of Thrones, and Batman).

We’re only in June, but Netflix’s share price has already appreciated by more than 100%, year to date

graph 1906 netflix

SOURCE: Yahoo Finance

It’s testament to Netflix’s position as an innovator – and a tech titan – that the industry reacted the way it did to the publication of what turned out to be a half-truth. However, the reality behind the story may be more interesting than yet another platform adding video games (we’re looking at you, Amazon).

What actually happened is that Netflix enlisted Telltale to create a game based on the former’s runaway success Stranger Things. The game will be available for consoles and PCs, and is “part of the company’s broader merchandising efforts, designed to generate buzz about its original content.”

That’s a telling sentence: Netflix is one of the world’s biggest investors into original content, and has produced some of the most critically acclaimed, popular, and memorable shows and films available over the last couple of years. Opening those worlds up to a gaming experience could be a massive expansion for Netflix and its properties.

This is just one example of the company’s sideways glances at the video game industry. Last year, Netflix debuted “interactive stories” on its platforms – shows where the viewer got to decide what the main character would do in certain situations. That’s not a video game per se – more like a digitisation of those old “multiple choice” story books that were popular amongst young fantasy fans in the 80s and 90s – but it’s a blurred line. So far, Netflix has aimed these efforts (two last year, and a third this March) at younger viewers.

Netflix is also exploring other game-based properties. It has released original content based on iconic video games from the past (Castlevania, based on the old Nintendo game of the same name, is a foray into Japanese anime), and is developing Minecraft: Story Mode – a five episode program based on Microsoft’s wildly successful game. Mincraft: Story mode will also be an interactive title.

As Netflix experiments with shows that include elements from video gaming, and considers the licensing of its own hugely successful creative properties to game developers, it is becoming a company at the convergence point of these popular trends: gaming, and streaming. That’s a great space to occupy, and as of right now, no one else seems positioned to challenge it effectively.

Disclosure

Dominion holds Netflix in its Global Trends Ecommerce Fund.


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