Amazon Prime Video, HBO Max, and others have chipped away at the market once ruled by Netflix. To address the slowdown in growth, Netflix is looking at another source of potential revenue: cloud gaming service.
Unbeknownst to many, Netflix has amassed a catalog of mobile games for both iOS and Android. While these titles don't compare to Steam, Epic, or Xbox Game Pass, it's the start of the streaming giant’s foray into the gaming industry. More importantly, many recent job postings found on the company's website and LinkedIn suggest that it's preparing to make a major play on cloud gaming.
The proof is in the pudding
Let's start with the two most interesting job postings. The first job posting, found on the company's LinkedIn profile, is looking for a Security Product Manager to join the streaming service provider to handle games security. The job description also mentions that the hired individual will support the "traditional Streaming and our new Netflix Gaming service."
On the other hand, the second job bulletin, found on the company’s website, is looking for a Senior Software Engineer – Rendering Engineer. Part of the job description indicates that the position provides "support for our cloud gaming service".
There are several other gaming-related job openings indicating that Netflix is moving into cloud gaming services.
In a statement, Netflix addressed the job hirings related to cloud gaming:
We are always looking for great talent to join our teams and are constantly exploring new product opportunities to enhance our member experience. We have nothing else to share at this time.
Netflix has reportedly purchased Finnish gaming company Next Games for $72 million and will be looking to acquire smaller gaming studios to add more games to its library.
Is this enough to stay ahead of the competition?
Netflix's next foray will see it face off against heavy competition. Both Sony and Xbox are firmly entrenched in this category with the revamped PS Plus (formerly PS Now) and Xbox Cloud Gaming, respectively. Both Sony and Microsoft's cloud gaming services allow gamers to play titles from previous generations of their respective consoles. Netflix lacks the library to compete against what Sony and Microsoft have to offer.
What’s next for Netflix?
Netflix has one good thing going for it: the company currently has 221 million subscribers worldwide.
Interesting comment from Netflix’s Reed Hastings: Gaming isn’t just a hobby for them. In fact, he says, don’t bother asking about what Netflix is going to do next until it’s offering the best gaming service available. Obviously a high priority for the company now.
— Alex Sherman (@sherman4949) January 21, 2022
However, only a small portion of the company’s subscribers are into Netflix-owned mobile games. A recent study suggests that less than 1% or 1.7 million Netflix subscribers have played its mobile games. Having a million subscribers play your game seems plenty if you don't consider that Steam has 27 million users on a daily basis.
The comparison does seem unfair given that Steam has one of the largest gaming libraries in the industry and Netflix only has a handful of titles. At the same time, it gives you an idea of the potential market of Netflix if it gets a good number of games published under its fledgling library.
It will be a while before we see Netflix Gaming as a viable cloud gaming service provider if it even happens. But from what we know, the company is serious about getting into the gaming business based on the statement of CEO Reed Hastings to CNBC tech reporter Alex Sherman earlier this year.