Netflix Embraces Decade-Defining Transition in Gaming Sector through AI Support
A while back, I floated the suggestion that the next major triumph for Netflix might not be a movie or a TV series, but rather a substantial dive into the video game market. The accumulation of interactive specials suggested this could be part of their strategy, paving the way for a series of traditional gaming experiences.
However, it appears I wasn't entirely accurate. Netflix remains focused on video games, but the interactive experiences will not be a long-term component of their approach.
Netflix rethinks its gaming strategy
Netflix's gaming chief and video game industry titan, Mike Verdu, hinted at a strategy change back in December. In an interview with Gamefile reporter Steven Totilo, he stated, "We're not creating those specific experiences anymore." Verdu explained that the interactive storytelling format was "very restrictive," and Netflix was shifting towards more ambitious gaming concepts.
The company is now pushing this strategy shift further. The Verge has confirmed that most of the interactive specials will be phased out by December 1, 2024. Bandersnatch will continue, alongside an Unbreakable Kimmy Schmidt game and two interactive adventures featuring Man vs. Wild host Bear Grylls. Approximately 20 interactive specials will be removed.
Leveraging AI to fuel human creativity in gaming
At the same time, Verdu's role within Netflix is changing. His new title, announced earlier this week, is vice president of generative artificial intelligence (AI) for games. In this role, Verdu aims to use generative AI as a creative tool, boosting the development of new titles.
"I am centered on a creator-first vision for AI, one that puts creative talent at the forefront, with AI serving as a catalyst and an accelerant," Verdu stated on LinkedIn. "AI will enable large game teams to move at a much faster pace, and will also deliver almost unimaginable new capabilities to developers in smaller game teams."
Netflix is still devoted to video games, but their initial endeavors at making games playable with your smart TV remote weren't successful. The company already has more than 100 mobile games available, some of which are enhanced by interacting with your living room TV. More will be released, particularly once Mike Verdu figures out how to speed up the development process using generative AI.
The future of Netflix games
And the momentum continues, shifting to a different rhythm than anticipated.
Netflix is still releasing numerous games. Some are well-known titles like Grand Theft Auto: San Andreas and Bloons TD 6. Others are in-house developments, often based on Netflix's exclusive content, such as Stranger Things: 1984 or Too Hot To Handle 3.
It's evident that the game list will continue to expand, and the rate of new title releases should accelerate in 2025 and beyond. As for the interactive TV shows that are being phased out, the company wouldn't do that if they were popular. The handful of remaining titles are probably the best of the bunch.
Bandersnatch was watched 900,000 times in the first half of 2024, for example. Considering it's a six-year-old production and has a TV-MA rating, that's impressive for an adult experience.
Monetizing Netflix games: What lies ahead?
Netflix is exploring new ways to monetize its games, which are currently included for free with any Netflix video-streaming subscription. The games do not employ pay-to-win tactics or in-game purchases, and are ad-free.
I wouldn't be surprised to see a small amount of ads in future releases, given that Netflix now offers ad-based video subscriptions and is gaining experience in the digital advertising field. Eventually, a separation of the video and gaming services could be on the horizon, much like the much criticized Qwikster split that led to the current Netflix entertainment giant.
Let me remind you of Netflix's stock performance since transitioning from the red DVD-by-mail envelopes:
Netflix may be laying the groundwork for its next significant transformation, diving deep into the video game industry with AI assistance. While past performance does not guarantee future success, this could be another game-changing move similar to the Qwikster launch. It would be wise to hold a few Netflix shares before Mike Verdu's brilliant ideas are unveiled.
In light of Netflix's shift in gaming strategy, the company is no longer focusing on interactive specials as a long-term component of their approach and has appointed Mike Verdu as their vice president of generative artificial intelligence for games, aiming to use AI as a creative tool to boost game development. Additionally, Netflix is still invested in video games, with a growing list of titles such as Grand Theft Auto: San Andreas and Stranger Things: 1984, and is exploring ways to monetize its games, potentially introducing ads in future releases.
