Netflix wants to try where Google Stadia failed.
Just a few weeks ago, Google publicly retreated from cloud gaming with the surprise announcement that it would be shutting down Stadia. By throwing in the towel, it seemed like Microsoft, which has made cloud gaming a perk but not its primary focus for Xbox, has the best chance at popular adoption, as it’s probably the closest thing to a “Netflix for video games” that we have so far. Amazon’s Luna doesn’t seem to be a big hit, and most people don’t seem aware of Nvidia’s GeForce Now.
This week, the future of game streaming got a lot more interesting: Netflix, the company that proved that movie streaming was the future, announced that it’s “seriously exploring” a cloud gaming service of its own. It’s got its work cut out.
Into the Breach is one of Netflix’s premier mobile titles. Image: Subset Games
Netflix has already demonstrated it can capably run a content streaming business for movies and TV shows at scale for hundreds of millions of customers. But making the jump from the handful of mobile games it currently offers to a full-on cloud gaming service will be a “long, tough, danger-filled road,” according to Lewis Ward, IDC’s research director of gaming, esports, and VR / AR.
The risk might be worth it because cloud gaming would immediately open up Netflix’s gaming strategy in a big way: the company could theoretically offer games on every screen where you watch Netflix. By this point, you’ve probably heard something like that pitch a few times, but Netflix doesn’t seem to be interested in a standalone service. Based on comments from the company’s gaming boss, Mike Verdu, it seems as if it will be leaning more toward Xbox’s actually successful version of cloud gaming. “For us, delivering games to your TV or to your PC [is] value add,” he said at TechCrunch Disrupt on Tuesday. “We’re not asking you to subscribe as a console replacement. So it’s a completely different business model.”
That’s different from Stadia, a standalone service that relied on a fractured business model that offered both full-price games and a subscription that only gave you access to select titles. Rebecca Ann Heineman, whose studio Olde Sküül was working on a Stadia game before the shutdown announcement, believes that model contributed to the failure of the platform. “Everyone I know, including myself, thought for one monthly price, you could play all the games you want for free,” she said in an email. “This was not the case with Stadia, and due to reality not meeting the perceived expectations, it really hurt Stadia.” If Netflix keeps cloud games as part of its “all you can eat”-style pricing, the company could get it right, she said.
But right now, it feels like it’s a lot easier to get cloud gaming wrong than right.
Netflix will need to invest in cloud gaming infrastructure
One hurdle Netflix will have to overcome is building a strong technical infrastructure for cloud gaming. Streaming games is a “different animal” than streaming movies and TV shows, Joost van Dreunen, an adjunct assistant professor at the NYU Stern School of Business, said in an interview. Netflix’s backend is based largely on Amazon Web Services, which isn’t ideal for streaming gaming, especially for multiplayer games, according to van Dreunen. Huge studios like Roblox and League of Legends developer Riot Games have built out their own technological backbone to reduce latency and create better experiences, and Netflix would need to make a similar commitment to its infrastructure for cloud gaming.
Another problem is that US broadband infrastructure is still largely terrible for cloud gaming, with many experiencing slow download speeds or frustrating monthly data caps. Netflix is keenly aware of this; it operates the fast.com speed-checking tool that’s useful to turn to when your internet unexpectedly slows down and you suddenly can’t watch a movie. And Microsoft, which also has a vested interest in better broadband access for its cloud gaming offerings, maintains a dashboard that shows just how bad digital inequity can be across the country. For example, in one county in Washington state, 97 percent of the county isn’t using the internet at broadband speeds, according to Microsoft. (The FCC defines broadband speeds as a 25Mbps download speed.) Unreliable internet makes cloud-streamed games laggy and difficult to play, and it’s hard to make a compelling case for cloud gaming if it’s difficult to know if your internet can handle a game in the first place.
Apple’s App Store will be an issue, too
Internet infrastructure won’t be the only thorn in Netflix’s side, as Apple’s App Store will be a major issue. Apple has complex rules for game streaming apps, barring companies from offering a library of games that you can browse through and launch at the tap of a button in a single app. Given just how much Apple makes off games, I doubt the company is going to change these rules anytime soon, so Netflix is going to have to figure out ways to get around them. Netflix could offer a Progressive Web App like competitors have. Or maybe it will negotiate some kind of deal with Apple so that its main mobile app can offer cloud gaming.
Perhaps most importantly, Netflix will have to navigate the notoriously challenging problem of making good video games, which is where Nvidia and Microsoft already have a leg up. Microsoft has been making its own games for more than 20 years and has acquired an empire of major studios to make titles under the Xbox banner. (There’s that little Activision Blizzard acquisition in the works, too.) And both Microsoft and Nvidia have been successful in bolstering their cloud gaming libraries because of the relationships they’ve built with game makers over decades.
Microsoft has a huge and potentially growing stable of first-party Xbox studios. Image: Microsoft
Google, on the other hand, couldn’t figure it out (or didn’t want to take the time to), as it shuttered its in-house Stadia studios a little over a year after the service launched. Amazon has seen some success with titles like New World and Lost Ark but quite a few failures, too. And neither New World nor Lost Ark is available on Luna.
Netflix appears to be committed to getting game development right. It’s acquired gaming developers, established an internal studio in Helsinki, and just announced a California-based studio headed up by former Overwatch executive producer Chacko Sonny. And Verdu seems to be willing to give its studios room to grow. “With internal games, we want to build institutional competence. We want teams to go through multiple cycles together and essentially get really good at working together and delivering great products,” he said. “Sometimes, the only way you can do that is to give them the space inside an organization.”
The company could have an advantage in leveraging its own franchises, according to Ward. “If this potential cloud-streamed gaming service takes off, I suspect it will ultimately be because a massive streaming video hit is accompanied by an excellent, complimentary game that’s only available on Netflix,” he said.
Netflix won’t have to rely entirely on its own games. Many of the currently available mobile titles are from other developers, and Verdu said Tuesday that Netflix’s “external games pillar is as important as internal games.” That suggests it plans to keep licensing games from outside partners, just as Netflix doesn’t only have its own movies and shows available to watch.
But we just don’t know how many games might be mobile or cloud-only titles.
“If there was ever a competitor to figure it out, it’s them”
Netflix declined to comment further beyond Verdu’s onstage remarks, so there are still a lot of open questions about how this potential cloud gaming service might shake out. “If the hope is that ‘Netflix Games’ will become a significant profit center within, say, five years, there’s a huge gulf between what Netflix has on tap today and what it must have in place to make that come true,” Ward said. He pointed to the fact that Netflix still has a small game catalog and that we don’t yet know if Netflix can attract and retain gamers. And given that Netflix is doing everything it can to find new revenue streams as quickly as possible, we’ll have to wait and see how much leeway its gaming studios will really have.
But Netflix did build its now-massive movie and TV show pipeline from scratch, so you can argue it’s proven it will put in the work to figure out the ins and outs of making its own content. If Netflix has the time and patience to find its audience for cloud gaming, “they could build out something pretty big,” Brandon Sheffield, creative director of Necrosoft Games, said in an email.
van Dreunen also pointed out that Netflix pivoted from mailing DVDs to an almost entirely digitized business, and they did it so well that competitors like Disney and HBO followed. While it may not be immediately obvious how Netflix will slot games into its cloud infrastructure, “if there was ever a competitor to figure it out, it’s them,” van Dreunen said.
Disclosure: The Verge recently produced a series with Netflix.
Source by www.theverge.com