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Why is gaming such an attractive space for Netflix and TikTok?

The streaming wars are heating up. In March, Disney pushed back Obi-Wan Kenobi’s release date to May 27 to coincide with the launch of Netflix’s hit show Stranger Things. This on the back of Google’s YouTube Shorts announcement that TikTok had reached 1.5 billion subscribers in the short video market.

With increasing competition, falling subscribers, and losing content, Netflix and TikTok need to diversify. And for that they turn to games. With more than three billion players worldwide and an estimated $200 billion market share, the gambling industry is both popular and lucrative.

Netflix rolled out mobile gaming to all of its subscribers last year. This included two notable connections to Stranger Things. Meanwhile, TikTok has been offering games for select users since 2019 and seems very likely to expand those offerings.

Retain existing subscribers

Both Netflix and TikTok have transformed the entertainment business.

They appear diametrically opposed on the surface. The former earns revenue from subscriptions and spends millions of dollars on licensing or content creation. The latter makes money by connecting viewers with advertisers using streaming “influencers” who have mastered the art of short videos.

However, the two platforms share some key characteristics. They both:

  1. providing video content via the internet
  2. aim to constantly expand their user base
  3. Enjoy unique and original content
  4. Collect and use user data to improve their services, and
  5. face significant and increasing competition from other businesses and entertainment media.

Many popular movies and TV series are leaving Netflix for competing platforms. At the same time, TikTok is also losing short video influencers to other platforms. Both platforms are looking for new strategies for subscriber retention, growth and original content.

This is where gaming comes into play. According to a Consumer Insights report, 79% of the global online population engages in some form of gaming. And millennials rank gaming as either the most popular or second most popular entertainment activity behind watching other people play games on video platforms.

Why is gaming an attractive area?

Games typically offer longer engagement times than series or movies. This is due to the psychological motivational principles that underlie most gameplay.

People who invest in games often look for additional narrative (or “lore”) in the form of shows and movies. Alternatively, viewers who have invested in shows may also look to video games for alternate narratives and world-building opportunities. So shows lead customers to games, and games keep them busy between season releases.

This technique of telling a story across multiple platforms and formats is known as “transmedia storytelling” and is being used with great success by broadcast, social media and gaming companies. This is what platforms rely on to engage audiences with their entertainment ecosystems.

Content creation has boomed since the pandemic, and younger audiences are spending more time than ever watching user-generated content online. They’ve particularly catered to games like Crab Game (a fan-made version of the popular Netflix show Squid Game) – which also has millions of viewing hours on the streaming service Twitch.

The rise of Minecraft as a popular “modding” game (where players can collectively change the gameplay through their own modifications) has also helped video streaming and subscription services. Minecraft-related videos have been streamed more than a trillion times on YouTube.

The transmediale success provides additional opportunities for companies looking to leverage their licensed or copyrighted original content.

Intellectual property and data analysis

We know that games stimulate attention, motivation, emotions and sociability among players.

Companies like game-hosting platform Steam have shown that user data can influence the creation of new content by game developers. In fact, this is a market advantage that Netflix and TikTok have over competitors.

For example, it’s easy to imagine that if a character is popular in a game, based on game data, it’s also more likely to be featured in an upcoming show based on that game.

Netflix and TikTok can lose big

When we talk about streaming wars and increased competition, the playing field isn’t level. There are key differences between Netflix and TikTok and other players like Disney+, Amazon Prime, Apple TV and YouTube.

Netflix is ​​in the streaming business and TikTok is in the video hosting industry. On the other hand, based on revenue, Disney is in the theme park and toy industry, Amazon in the online sales industry, Apple in the computer and phone industry, and Google in the search and advertising industry.

For these companies, streaming and video hosting is a small side business that provides useful data to feed a larger machine. So they don’t have that much to lose in the “streaming wars” as they can run these ancillary businesses at a loss.

Netflix and TikTok aren’t so lucky. By turning to games, they’re reaching for a lifeline they really need.The conversation


James Birt, Associate Professor of Computer Games and Associate Dean Engagement, Bond University and Darren Paul Fisher, Assistant Professor, Head of Directing, Department of Film, Screen and Creative Media, Bond University

This article was republished by The Conversation under a Creative Commons license. Read the original article.

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