How Netflix And Microsoft Are Changing Gaming Forever
Say farewell to your gaming console
When Netflix acquired Night School Studio in 2021, the gaming industry evolved. The announcement was the official confirmation that the company was moving into video game development.
The TV platform had started offering mobile video games worldwide at the end of 2021. Yet, that announcement sent a very clear message across the industry: Netflix is coming after the whole “gaming pie” and won’t settle for crumbs.
Microsoft, on the other hand, has been an industry leader for many years. Its experience developing Xbox and the rivalry with Sony has taught the tech giant almost everything there is to know about gaming.
Yet, it seems that Microsoft is only getting started.
The company recently announced the acquisition of Activision Blizzard, one of the most successful studios in the history of gaming. This adds to Microsoft Xbox’s catalog some extremely popular franchises like Call of Duty, Warcraft, and Diablo. But more importantly, it gives Microsoft the possibility to attract some of the 400 million users that play Activision’s games every month.
By leveraging their unique strengths, Netflix and Microsoft seem determined to take the crown of the gaming industry. Will they succeed?
A new cowboy in gaming town
Despite reaching popularity much later than companies like Microsoft, Sony, or Nintendo, Netflix has quickly become a tech powerhouse. With a mind-blowing streaming infrastructure and a large subscriber base, Netflix’s move into gaming didn’t come as a complete surprise.
But does Netflix’s ambition make sense?
Netflix’s stock has recently plunged due to its problems attracting new subscribers. Gaming could give the company some much-needed stability and a new market to “hunt” for new subscribers. Especially considering the unstoppable growth of the gaming industry.
If their plans turn out to be a success, Netflix might be joining Microsoft in Wall Street’s trillion-dollar club sooner than anticipated.
It will be a bumpy road, though. Industry leaders like Microsoft, Nvidia, and Sony won’t go down without a fight. Netflix starts at a disadvantage, so how can it tip the balance in its favor?
First and foremost, with a clear focus. While other companies need to keep working on their gaming consoles and deal with the global logistics crisis, Netflix’s Gaming division will be able to focus on cloud gaming services and video game development.
Additionally, cloud gaming providers have struggled to gain new users due to a market packed with competitors. Netflix, on the contrary, will be able to leverage its 220 million TV users from day one.
If the company succeeds at bundling its gaming and TV offerings, the result could be a proposal very difficult to compete with.
A (necessary) step towards the Metaverse
Like all good chess players, Netflix and Microsoft also know how to play the long game. The gaming industry is definitely worth a fight, but there is more into play. Both are keeping in mind the potential that the Metaverse has recently shown to the world.
No one knows if the Metaverse will succeed. No one even knows the final shape that it can end up taking. But by boosting their game development capabilities, both companies are also investing in the technologies (and skills) that will help them design and create new virtual worlds.
This will be key for any company that aspires to have a say in the future of the Metaverse.
If this new digital reality survives the hype and lives up to gamers’ expectations, gaming might end up merging with the Metaverse to create a new entertainment experience.
That— together with the implicit potential revenues from Play-to-Earn video games — makes the extra effort completely worth it.
Farewell to your gaming console
Following the trend initiated by Microsoft’s Xbox a couple of months ago, it seems natural that Netflix will also push for a cloud gaming experience that only requires your smartphone or a TV and a remote.
This means that you might be using the last gaming console that you will ever own. Also, if there is a gaming room at your home, it might be time for a renovation (maybe a new home office?). The simplicity of playing directly on your phone or on your living room’s TV might turn gaming rooms into memories.
I don’t know if that thought makes you happy or sad, but I think it is great news overall. We will finally forget about buying a new gaming console every few years. The feeling of playing a new video game on the latest PlayStation was quite unique, but now we will play any video game we want without thinking about the hardware. Much better, don’t you think?
As an additional advantage, cloud gaming will also contribute to creating a more sustainable gaming industry. That’s good news for the industry and for the environment.
Wait, what about Sony and Nintendo?
No, I haven’t forgotten about them. Discussing gaming without talking about them would be a sin. Sony and Nintendo have been “in the game” for decades, but they need to adapt quickly to counteract the latest investments made by Netflix and Microsoft.
Sony has always relied on the success of PlayStation. The gaming console is a synonym of extraordinary graphics, but Sony will soon be part of a world where gamers don’t buy consoles anymore.
The company has been working on boosting its PlayStation Now service, but it is still too early to know if the service will be good enough to make up for the expected decrease in hardware sales.
Nintendo has also enjoyed great success in the past years, especially since the launch of the Nintendo Switch. Yet, that doesn’t mean that the company is stranger to the major transformation that lies ahead.
The Japanese company also joined the cloud gaming club when it launched Nintendo Switch Cloud Streaming. The service is an attempt to extend the success of Nintendo Switch, but also a necessary step to transform its business model.
What to expect next?
Netflix and Microsoft will accelerate the trends we have seen during the past years: cloud gaming will become the new standard, more people will play from their (5G) smartphones and TVs, and subscription-based services will attract millions of new gamers.
While no one can predict who will take the “gaming crown”, the latest movements in the industry point to a radical transformation. One that will change the way we understand and enjoy gaming.
New ways of playing, further acquisitions, and the intersection of gaming and the Metaverse will result in new experiences that will take digital entertainment to a whole new dimension.
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