According to reports, the video game industry has finally ushered in its own moment. Less than two weeks ago, Take-Two announced it had acquired Zynga for $12.7 billion, and recently Microsoft announced it would acquire Activision Blizzard for a record $69 billion.
Later, Netflix co-founder and CEO Reed Hastings also announced that the company would build a video game business that would allow Netflix to “enable our members by having the best gaming content available. Surprised”, Hastings said, putting out a great game is his goal now.
“We’ve got to do this differently, mobile gaming is the world leader right now, and we’re going to be one of the best video game makers in the world,” Hastings said on Netflix’s earnings call. One, just like what we’ve achieved in movies so far, we have two seats in the top 10 movies, and in that context, we need to think about where we’re going. We’re going to do our game well enough, rather than simply joining in the future.”
That’s a tall order for Netflix, which is about to build a gaming division from the ground up. The company’s chief operating officer, Greg Peters, said on Thursday that they plan to acquire the intellectual property for big games that “people will love” later this year. Hastings added that in the game business, Netflix will adopt a “walk, crawl, run” strategy, that is, purposefully develop the business gradually, so as to understand the habits of users and use resources more efficiently.
Of course, the company has used this strategy before, but only in streaming video. Before they dipped their toe into original video content, their business model was to license well-known movies and TV shows to complement cable TV and build their subscriber base. After years of experimenting on a show-by-show or movie-by-movie basis, Netflix believes its recommendation algorithms and user data can accurately predict new popular original content. Today, Netflix spends billions of dollars a year on original content.
Microsoft’s acquisition of Activision Blizzard, and Netflix’s announcement that it will launch a gaming business, have marked that gaming has become popular with users around the world, especially among young users, and it has become one of the most important forms of entertainment today. Netflix has often pointed out that games like Fortnite are competing for eyeballs with its core streaming service.
In fact, this is not a new thing, Microsoft has been running the Xbox business for the past few decades. But the company has never spent nearly $70 billion on any business, and it’s a video game business.
As companies like Meta and Roblox began to strategize around immersive consumer computing strategies or the “metaverse,” gaming suddenly became the focus of many, as the metaverse was bound to make games more accessible in some way. popular.
But the acquisition spree may well be an indication of something more straightforward: Gaming has become ubiquitous. Mobile devices and online games, which connect people to play games in real-time without restrictions, from anywhere, have given gaming a wider audience and meaning in youth culture.
According to the Entertainment Software Association, the American video game industry association, there are far more video game players than ever before. Big tech and media companies have dealt with games in the past, with mixed success. Disney and Google are among the big companies that have decided in recent years to abandon their video game plans.
And, while it’s not entirely clear what the metaverse includes, it’s probably too early to consider the company’s position within the metaverse. But gaming has clearly become a major interest for two of the world’s largest tech companies. This makes a lot of sense, and it may mean that the game industry will usher in a larger-scale consolidation in the future.