Xbox and Netflix Eye New Gaming Platforms

Xbox and Netflix are both looking toward new gaming markets in the coming years, between a mobile app store and cloud gaming, respectively. While Xbox’s expansion is more likely, Netflix’s is the real wild card, with potential to be a sea change or massive flop.

Catching a Break from Regulators
“We want to be in a position to offer Xbox and content from both us and our third-party partners across any screen where somebody would want to play,” Xbox head Phil Spencer told the Financial Times. He confirmed that Xbox intends to launch a mobile game store app as soon as possible. This long pending development ironically hinges on the same regulators who’ve given Microsoft so much grief over its pending acquisition of Activision Blizzard.

The European Union’s Digital Markets Act, which forces the likes of Google and Apple to open up Android and iOS to third-party apps, is key. The law is expected to go into effect in March 2024, barring the admittedly all but expected appeals from major tech companies. As Epic Games found out, Apple is likely to bitterly fight for as long as possible against third party storefronts – like an Xbox mobile gaming store – which would prevent it from “taxing” in-app revenue. 

  • Xbox has claimed Apple’s App Store policies forced it to offer an inferior web browser experience for Xbox Cloud Gaming.
It All Comes Back to Activision
While an Xbox mobile game app is inevitable, the ultimate fate of its purchase of Activision Blizzard looms large over its designs for mobile gaming. One of Microsoft's motivations for the $69 billion deal is Activision Blizzard’s lucrative mobile portfolio. If it wants to be more than just a console gaming company, this infusion of talent and IP is critical to beefing up its mobile plans.
  • Activision Blizzard includes mobile publisher King (Candy Crush), which it acquired in 2016.
  • The deal would also grant access to a vast back catalog of IP that could be repurposed or simply remastered for mobile games.
Netflix and Game
Video streaming giant Netflix continues to inch toward challenging Xbox for pole position in the developing cloud gaming market. Since debuting its first downloadable games in 2021, the company has steadily grown its portfolio to 55 primarily mobile titles. Some of these games are well known titles – such as the first two Monument Valley games, which are expected in 2024, while others are tie-ins to streaming hits like Stranger Things.
  • Netflix claims over 40 games will be released in 2023, with another 70 in development.
The obvious end game here is cloud gaming. Netflix VP of External Games Leanne Loombe told reporters this week, “We are very early in that side of our journey. We do believe that cloud gaming will enable us to provide that easy access to games on any screen and be frictionless and provide the accessibility into gaming experiences.” This aligns with reports last year that Netflix was hiring for cloud gaming positions.

Taking a Gamble
For Netflix, it’s easy to see the strategy: It's already in the content streaming business, so capitalize on its massive subscriber base and expand into a related market, synergies and all. If it can tap into even a fraction of those 231 million subscribers worldwide, that's potentially a larger audience than all other cloud gaming services combined. At the same time, Netflix has to play its cards right to avoid a Google Stadia-esque flop.

  • Pick a Viable Model: Stadia flopped in part because of its buy-to-play model. Netflix seems likely to avoid this, if for any reason its existing a la carte streaming model.
  • Quality Over Quantity: This will be the biggest challenge: Game platforms need a game that pulls in players. Netflix has curated a respectable mobile catalog, but it’s frankly going to take more than Stranger Things 3: The Game to take on established gaming franchises.
  • Hardware Headaches: It's not an immediate concern, but if Netflix wants to expand into AAA titles, it may need to consider a proprietary controller or third-party peripherals.

    Featured image: Microsoft