Netflix logo on a smartphone with popcorn. Source: Adobe Stock
The dominant paid streaming service Netflix is making one of its boldest moves by expanding into video games amid tight competition in the near-saturated U.S. streaming market.
Netflix had been hiring people from gaming. According to Bloomberg, Netflix has hired Mike Verdu, the biggest name yet who was the former Oculus and Electronic Arts game developing leader.
Netflix seeks growth in gaming
Although Netflix is still well ahead of its streaming rivals such as Disney+ and HBO Max, but added fewer new subscribers than expected in the latest quarterly report. Meanwhile, the gaming business is huge. The gaming market size is projected to reach US$398.9 billion by 2026, from US$192.1 billion in 2019, at a compound annual growth rate of 11% during 2021-2026, according to Valuates Report. As a result, Netflix is seeking growth in this new scope.
Netflix has previously tapped into gaming, such as making its series Black Mirror: Bandersnatch a game-like experience, where audiences get to pick the plots and make decisions for the characters that would eventually alter the outcomes of the story.
According to people familiar with the matter, related service will be available soonest in 2022. And as Netflix continues to lead the streaming market and enter the gaming market, Industry observers think the main server provider ASRock will also gain growth momentum.
ASRock sees a brighter outlook from the second half of 2021
Taiwan-based ASRock is the server provider to Netflix. The company has enjoyed the booming of streaming services, telecom, and edge computing. Although some supply has been delayed in the first half of 2021 due to component shortages, the third and fourth quarter is seeing a brighter outlook, especially AMD and Intel launching new server products.
ASRock stated that server demands will continue to grow in the coming years, but their GPU products that are being supplied to AMD are met with substrate shortages that had impeded shipments, but the hardware maker believes that relevant business will see an upturn next year.