Netflix’s gaming push could be its secret sauce for continued domination

Netflix finally integrates games into its vast library of content. This is a significant power play, and a markedly new approach to rival services that are primarily concerned with acquiring IP. This is a great way for Netflix to keep its subscribers happy and could be its winning strategy for streaming dominance.
While Netflix has been playing with games for some time, the global rollout by Netflix of games in its app last week marks a major shift in the streamer’s strategy to get those games to its subscribers. The games began rolling out on Android last week and are now available on iOS as well as iPad. Netflix's games, which are similar to originals, movies, and TV shows, will now be available to users. They can be launched directly from the app, once they have been downloaded through the App and Play stores.

Netflix executives repeatedly stated that their product is competing with everything, from sleep to social media apps and games to Netflix -- basically anything else you could do besides watching Netflix. Netflix is now competing with more streaming and content-serving platforms than ever before. This includes YouTubes, YouTubes, and Hulus as well as other streaming services like TikTok and Instagram. It could help to protect its content by introducing more points to entry -- in this instance, games that expand upon the worlds of existing titles -- and it could also prevent users from turning to other apps or services for entertainment.

Richard Broughton is a research director at Ampere Analysis. He says that Ampere's recent analysis of Netflix usage demonstrates this goal. Ampere surveys approximately 50,000 people in different markets every six months to find out how they use various apps and services. According to Broughton, Ampere noticed a slowdown in subscribers aged 18-24 years old during its most recent wave of research.

Broughton states that people who may have previously gotten Netflix are now interested in other services, such as the US-backed studios or social video services like TikTok.

"People in that age group who may have previously used Netflix are now leaving the company and becoming interested in other services."

Netflix's games are creating entertainment and additional value that can help it compete against other services, especially younger customers.

"Netflix has always stated that gaming is one the biggest competitors of all time. So I guess it's part and parcel of the old adage that "if you can’t beat them join them," Broughton said.

Netflix stated that it is committed to developing games for all levels of play, regardless of whether they are beginner or experienced gamers.

Broughton states that Netflix could be seen as trying to take a piece of the market by partnering with some of these new subscription gaming platforms. Its offering is still very different, as it's mobile-centric. This contrasts with many of these platforms that are focused on Triple-A games. It's still a strong presence in the market that allows the company to try new things. As time passes, I expect to see more and better games.

"If they can't be beat, join them."

However, Netflix's global launch for Android was limited to five games -- this is a long way from Netflix becoming a real gaming competitor, according to Joseph Bonner, an Argus Research analyst. Bonner told The Verge that games make Netflix more "sticky", but it will likely take some time to understand how they actually affect the service. Bonner believes it's a smart business move, but in the big scheme of Netflix's business, he states that "this is only a small piece of the overall pie."

Netflix may have a small game library, but it has stated that it is working to expand its gaming collection. Broughton points out that Netflix might even try more advanced gaming in the future.

Broughton still believes that Netflix's launch games within its app is essential to widespread adoption. This lowers the barrier of entry and allows Netflix to attract potential gamers who may not have otherwise been able to access its games. Games might be the best way for Netflix to become even more addictive.

Updated November 9, 2013 at 3:20 PM ET: This article has been updated with information that Netflix games are now available for iOS and iPad.