Cloud gaming appetite a major opportunity for Netflix – report

Savanta

New research has revealed that one third (33%) of committed gamers across seven global markets have already used a cloud gaming service, alongside 10% of casual gamers.

Some 82% of those who have tried cloud gaming are likely to use it again and the current uptake of cloud gaming services is highest in Spain (35%) and the USA (32%), and lowest in France (16%).

While nearly 44% of ‘non-passionate’ gamers and 26% of passionate gamers weren’t aware of cloud gaming prior to taking the survey, the concept is appealing.

Of those yet to try it, Spanish gamers are most open to doing so (44%), followed by the USA (36%) and the UK (30%).

The study was conducted in June 2023 by market research firm Savanta and covers a representative sample of around 12,000 gamers – defined as anyone who plays electronic games on any device – across seven markets (Canada, France, Germany, Netherlands, Spain, UK and USA).

Shaun Austin, senior vice president media at Savanta, said: “Committed gamers, the audience Microsoft is targeting with its mooted $69 billion acquisition of Activision Blizzard, represents a significant – and lucrative – market segment.

“However, it would be short-sighted to discount the collective opportunity in casual gamers.

“70% of our sample play mainly on their smartphone and over half (52%) prefer freemium games.

“The potential in this segment has certainly not been lost on Netflix. It has recently announced it is extending its offer from downloadable mobile games to a fully-fledged cloud gaming service, which will be accessible through connected TVs and laptops.”

Netflix soft-launched gaming downloads through its mobile app in November 2021.

A fifth (22%) of Savanta’s sample have already downloaded at least one game, and the majority (77%) would likely do so again. Nearly half (45%) of those who had not previously heard about Netflix games would use the current service.

Netflix’s cloud gaming proposition comes at a time when one in five say buying games is the first entertainment luxury they would forgo in the cost-of-living crisis – ahead of magazines and gaming subscriptions (15% each) and TV/film streaming subscriptions (12%).

Austin added: “The failure of Google’s Stadia service suggests the committed gamer segment, one that obsesses over technical details like frame rates and data usage caps, is always going to be a tough one to crack.

“Netflix is taking a very different strategy in following the likes of Facebook to target the casual market and positioning games as a value add, rather than a destination.

“Games represent sticky content for a platform likely to be hit hard both by the cost-of-living-crisis and the Writers’ Strike.

“Moreover, Netflix’s IP in the gaming space could offer a host of brand extension opportunities, including product placement, for brand advertisers.

“Customers don’t need to give anything up, rather they have all to gain. If 45% of Netflix’s global audience of 238 million gives gaming a go, then Netflix could become a major force in cloud gaming space.”