Netflix games strategy evokes the spirit of Nintendo Wii

[Music] hello and welcome to the game business show uh it's our fourth episode this week we won't be doing w't normally be doing four episodes in a week but uh this is our day week this is our first week on the show and it's been quite a week I have to say um we launched on Monday with our announcement where we got we got people to sign up and then on the Tuesday we put out our first show if you listen to that please do I think it's a really good show my guest host was Stephen tortilla and the big Focus was on GTA 6 and the impact that's going to have on the market we also talked about GDC we talked about Assassin's Creed sales we talked about Trump tariffs we talked about the entertainment software's Association accessible Kims initiative with Ubisoft made a guest appearance on that show so that was um that was on Tuesday immediately after that we did an interview Mike MIM Mike MIM is the co-founder of Blizzard if you don't know who he is he set up a new publisher in 2020 called dream Haven they announced a couple of games this week one was the big game they announced is wild gate wild gate it gave me cf's Vibes I've had people come to me and say

it's nothing like CFS I don't does it feels like CF to be crew based game in CFS in space anyway crew based games lots of uh uh destroying each other's ships and um and Country of treasure uh obviously it's not exactly the same but it has a A vibe to it to me that was quite cool but they also announced a game called mechab Bellum as they announced the game's already been out but uh but dream hav picked up the publishing rights and what I thought was great about the story really fascinating about that story is the Starcraft community so Mike Mam's previous Community from blizzard is the one that introduced him to that game you can read about that story or you can listen to it or watch it on our YouTube channel um right now we then took a little bit of a pause on Wednesday before Thursday we ran our big in-depth look at the state of game investment um we interviewed seven different game investors early stage investors VCS all different types of companies who were who and you know it wasn't as Bleak as I thought it wasn't super positive it wasn't overwhelmingly um it wasn't overwhelmingly positive but um it was also not very ble either I really think

she Give a listen I think there's a lot of optimism in there a little bit of Hope about where the Market's heading that was yesterday here we are with the fourth show um and it's me on my own today I say on my own I am my producer Richard is is also here he's welcome to chime in and today we're gonna talk about Netflix games I interview the head of netfli games pres the president of Netflix games called LA and tescan um but before I get to that what I wasn't expecting this week was such a busy news week um so in the media we had some smaller stories um on the media side as well as the launch of the game business which obviously is the biggest story um Game Informer returned um on Tuesday with the full team that uh that that disappeared towards the end of last year when when it was closed they have a new investor um uh uh a new a new companies behind it has backed it it's still independent when I first heard about the game game for coming back when I heard it was the 14 which is uh what was I heard at GDC my initial reaction was well that's going to be expensive and it is obviously going to be expensive it's big

team um lots of costs on that team but uh reading through what they're planning it seems like they thought very hard about monetizing outside of just pure advertising I think that's interesting um and obviously it's great news to have anything in the media where things are being added and not taken away so great that game inform came back as a positive news story we then had a surprise thing happen yesterday well two surprises one was bigger than the other but this one was a surprise to me was Nintendo announced a direct again we and actually debut the direct a switch one direct um this is surprising because in less than a week we will have the switch 2 Nintendo Direct um now the the switch one directs the reason why um it's important Nintendo do these directs um for switch one because this is one of the key challenges they're going to have with switch 2 they have they have 129 million people who played Nintendo switch in the 12 months the end of December 2024 now Nintendo is the only company I seem to know that actually annual users rather

than monthly active users or daily active users but um 129 plion is a lot million people is a lot and I and I suspect for Nintendo this is by far the most engaged audience they've had moving from one generation to the other obviously we have the data that goes far back maybe the DS had a good engaged audience going into the 3DS but Nintendo often sees its audience fed away towards the end of the generation this isn't the case this time they have more active users annual active users uh now than they had um the year before so this is obviously really big deal for Nintendo they need to keep those switch one users engaged because they while they wait to upgrade them to switch 2 and the best way to do that is with games now the two big first party games first partyish games that Nintendo are releasing on switch one still is Metroid Prime Beyond Metroid Prime 4 uh which Metroid is not the biggest franchise for Nintendo um it's obviously well loved by fans it's a big AAA project and I think it's got a lot of potential Metroid I think it should be doing more than it is um that's

obviously a big one for Nintendo still to come they've also got a brand new Pokemon game Pokemon Za now people point out that if you look at the um uh the transition to DS to 3DS Nintendo also had a Metroid game that launched on the or 3DS to switch sorry Nintendo also had a 3DS switch game and a 3DS Metroid game a 3DS Pokemon game as well um but those post games were more either re one was a remake and one was a sort of follow-up to the previous year's game um these are we're talking two a full new Pokémon game a full new Metro game they also announced Tomodachi a new Tomodachi Life title and if you don't remember Tomodachi life don't blame you was quite long it was 10 years ago now the last time I D your life CH sort of like Animal Crossing but not quite um game acted really well on the 3DS it sold around 7 million units and um I think it was the 11th best selling game on 3DS in fact it was so it's a big it's potential potentially big thing now it's important Nintendo to keep releasing games on the switch keep that audience engaged while they upgrade them to switch to but this is this is the balance this is the

challenge if they put too much onto the switch one if they keep doing that CR cross chain approach um they may see a slower move to switch 2 if they put all their games on switch 2 they might end up losing a load of audience who have just you noticed well there's no games really on switch one I'm going to go elsewhere so there is a balance a to strike we'll talk more about this next week when they reveal the switch 2 and we'll see what Nintendo's approach will be the other big thing that happened yesterday was that Ubisoft has announced they are forming a new subsidiary with 10cent that subsidiary is uh is going to feature their three biggest Mega franchises Assassin's Creed Rainbow 6 and Far Cry um 10 cent is investing 1.16 billion euros into it um it values that subsid at about 4 billion euros Ubisoft is still the primary owner of it but tent has a 25% stake um it is it is Ubisoft needed that money he did that injection and it's clear that 10 cent really didn't want to inject the money into the full Ubisoft which is

you know around 177,000 employees it's a huge huge organization uh with lots of cost attached to it but they do want to invest in those super franchises that are worth potentially worth billions and billions and billions so Assassin's Creed and Far Cry and Rainbow 6 um this is on the one side it's good news and it's exactly what Ubisoft need to do uh they need those franchise Assassin's Creed Tech AR member 6 they need that kind of money they're big development projects they're incredibly massive franchises they're they're worth the money basically some of the other games Ghost Recon the division Just Dance Rayman um um those games are Prince of Persia those sort games those games some of them are profitable but they're on the smaller scale they're on the smaller end the margins aren't so great on them particularly when you look at how much Ubisoft spends on this stuff um Ubisoft has spoken about need to become more agile listening to the players behind the scenes they're talking about trying to be more focused on their games not every game they make now needs to be a hour open world epic

that has driving in it and stealth in it and action in it they can just make a really good stealth Action Splinter Cell they can just make a really good Prince ofers platform they really can just go all in on a on a on a on a on a on something like Ghost Recon or just they can really fully focus on something and for them that might because in this market if you do something like that you are focused look at Space Marine too last year even look at Resident Evil generally if you can do something that's fully focused that caters to an audience and does an extremely good job of it you have the chance to break out beyond that audience that's something that Ubisoft is talking about behind the scenes and um and that's something that its Core Business now can focus on doing the result of this is almost inevitably going to be quite a large number of layoffs or at least some layoffs it's a very big organization costs are going up if they're going to start making games quicker with smaller teams which probably is the better is the ideal approach for them they're going to have to start losing some of that stuff hopefully they can protect as many people as they can hopefully if there's areas of the business that they're not too sure about they can sell off or find new owners for so on the one hand it

feels positive it's ultimately what usof needs to do in order to become more sustainable games company but on the other hand um I suspect there's going be a lot of negative headlines to come in terms of cuts there um and I hope for the best the team there because they're a wonderful team um and uh but that was a big story that broke yesterday um there was that was it there was also another small story yesterday um uh uh from PlayStation didn't really picked up very much but um we should have done because um Phil Rosenberg um he's a senior vice president of global partner development and relations at Sony has stepped down after 20 years he's a he's a bit of a he's a he's been a main stay of that business now for pretty much every console launch that PlayStation's ever done um and uh he's a very familiar face in the market and um and good luck f with uh with whatever is next um if uh if there is anything now onto our main subject now normally doing this bit it would be an interview and I'd introduce the guest and we'd have a lovely little chat and and talk about those things we did the interview uh but there was no video

there was no there was no there's no audio it is so I'm going to try and recount it to you so I apologize if if you just want to read it you can go on the game business.com if you've got it in the newsletter if you're reading if you're listening to this above the article you can just read the article that's what you prefer but if you're somebody who's going for little walk and want to listen to it I'll tell you a little bit about this um um this intervie so I interviewed Ela toan who is the Pres of games at Netflix and um Alain is is Alan is um is best known if you look at his CVS he spent just under six years at epic games where he led the the development first party development there and the games he worked on was of course fortnite being the biggest but also rocket League Four Guys Lego fortnite you don't get much bigger than that so when people are talking about his uh when people announced him naturally it was all about the fortnite guys epic guys come to Netflix to revolutionize its game strategy Netflix was at GDC last week and they put an event on the side of GDC where they told us about that game strategy and when I heard it I have to say I I got a

different vibe I didn't get a fortnite Vibe now there are four areas of which um Netflix is focusing on and the first two is something you might expect so they're focusing on narrative games um sort of trans media projects as well you know which which makes sense considering the medium and they're also going to push their big mainstream IP including IP they partner with like WWE part um and Squid game or and even Grand Theft Auto which obviously been a big big hit on on on Netflix the the Grand Theft Auto um uh remaster done very very well on that platform now we'll come back to that stuff in a little bit but um the other two bits is stuff that may me think of something else so the two areas were these other two areas were around Netflix is wanting to become a trusted def destination for kids and families so they want it to be seen as like if you want to play games with your kids this is the place to go the other place is um they want to utilize modern TVs where you use your mobile phone as the controller um and in particular they were talking about party games um they

were talking about ways that you can uh uh and things you can use your phone on to play party games you know cing ideas of jackbox games and that sort of stuff uh tascan at GDC spoke about the need to eliminate friction with a control interface that everyone is familiar with that create Gams and experiences that can reach the broadest possible audience which on Netflix is estimated to be around 700 million people so um all of it reminded me of something else all of it reminded me of Nintendo Wii um and I I me tasan it felt like the Wei the idea of a of a of an accessible controller interface the idea of party games the idea of being for kids and families and I thought I was worried he might take U offense that but turns out he tasan he go back into his history go back before fortnite go back before epic he spent a good deal of time at EA eight years where he worked across Wii games including me for Speed SPO skate and Boogie and he said to me I love the Wii and if you look a lot if you look at a

lot of the games I worked on while at EA there was a lot of Wii um his point was I'm very vigorous about lowering friction and eliminating it if we can I can I see sometimes subscription is a friction as well and that's why they made the squid game mobile game they released uh back in December they released that for free you didn't have to have a a um a subscription to that game um they you know they want to eliminate that friction and so it gave me very much we Vibes party games were a part of this so um he points out that on every phone you have a gyroscope you have a microphone you have a speaker you have a touch screen and if you give these sort of control interfaces to creative people what do they what can they do with those things and whether that's something you can play on your own or with two people or 20 people um he asks can we do something really engaging um he he he thinks that you know ultimately you're trying to reach Netflix as bord audience they're not necessarily talking about col games here that doesn't mean they're not going to do those sorts of games but for them they want to make sure there's a way of reaching a border

audience um the thing that he keeps talking about is the importance of disruption um uh there's a lot the re I think one of the reasons why there's a lot of enthusiasm around what Netflix is talking about is because the market is desperate for some disruption some change that can generate Revenue generate um uh money and growth for the games Market in fact he said to me in my interview I'm wondering if people are being nice because we're a little bit a blue sky during very gray weather or is the vision really compelling I I kind of felt that it might be um and he talked very much actively about the importance of that disruption he talks about the fact that people are demanding these days and you need to do something new um what that what the new thing is that Netflix is doing that will catch on he's not sure um it could be it could be the trans media concept it could be the idea of you do something in the game and it affects what's going on in the TV show possibly using AI technology to do that it or or or it could be vice versa something that's inter uping the TV show impacting the game with the squid game for instance you watch the show you've got currency in the game that's quite a rudimentary um uh uh uh collaboration

between the the um the TV um and the game but also saw band snatch from Black Mirror um which um um which obviously was very interactive TV very much blurred the lines there so if it's that might be something that catches on trans media is not new we've had that sort of area for a while but obviously with Netflix's platform there's a unique opportunity here to perhaps make that work indeed even the idea of using the controller as uh using your phone as a controller isn't particular particularly new new PlayStation launch playlink um uh a long time ago now um which was a concept designed to um make games a little bit more accessible the Wii U tablet is effectively the idea go back to the GameCube and you had the Game Boy Advance being used as a controller it's not completely new but obviously what's key here is Netflix is 700 million audience and it's making sure that you're creating um uh frictionless um uh gameplay there so all this stuff again it's not particularly new but it's presented in way on a platform that's

new and although tascan can't be sure which one proved to disruptive he does think there was a bunch of unique cards that Netflix has to play um one of the things that um he did say on stage and I'm I'm surprised this didn't get picked up more because it sounds somewhat like he's he's questioning the future of the video game consoles um he said on stage when it comes to console we started to look at the future where the platform is agnostic look at the younger generation are 8-year-olds and 10year olds dreaming of only a PlayStation 6 I am not sure and basically young people are want to interact want to interact with a digital screen wherever it is whatever it is um and when you think about console and and the sort of it's about high definition screens about high high cost Hardware using a controller it's not doesn't quite have that level of um ease and accessibility um like young people demand from games and therefore the next generation's going to demand some games however where am I questioned this sort of not saying he was dismissing of consoles in fact he said he was a console fan but where I

was a little bit questioning here was that that whether it's consoles or digital platforms like steam they're really great at engaging players they're full of community features their ability to connect with each other to to play games with each other to show what you share with each other to to get achievements create avatars you know they they're great they're interactive gamified platforms Netflix isn't that Netflix is a place where you go and you choose the TV show I can't see what my friends are watching on Netflix that's not how this works um so I I ask casan you know some of the investment that Netflix is making in video games is is this just games it's just the software or are they going to be looking at doing things on the platform itself and I have to say clearly he Haden been asked that before and he was taking off go he said it was a very good question and it turns out they are very much actively looking into this um uh uh it's different he says I might not want to know what you're watching that's your thing when you talk about games and want to do something interactive that might be an opportunity to share some things or to communicate you want to be very thoughtful about the platform about the

platform and why people are coming on there and then it's and then if it's for something that's a bit more of a game maybe there will be an opportunity to do things with other members of the audience that's that connectivity thing he actually said come back to me in a year where hopefully they can show some of the things that we're talking about um but ultimately it comes down to is it fun is it adding value and engagement to the platform which is an important thing for next games um uh so we'll see we'll see that sounds quite exciting the possibility maybe I can get an achievement for watching friends who knows um now look we've been here before I've been here many times before uh I think Disney BBC Paramount Fox Universal that's just the top of my head um have all moved into games some of them really ambitiously they bought shidos um uh uh they've acquired IP and then moved out of games again or changed their strategy drastically um uh ultimately video games these companies are often I don't want to say a rounding error but they are a small part their business and when they find out how hard it is how challenging

it is to be successful um uh uh they end up backing away and going back to focusing on what they do which is making TV and movies so ask tasan why he feels that Netflix might be different what's going to stop Netflix getting bored in a couple years time if they're going to see some immediate success and he acknowledged this question in fact he had a very prepared answer to it so it's something that clearly he's been challenged on before um but he believes in Netflix leadership because they are used to as he he puts it they used to being stubborn they're used to making investment and they're used to acknowledging that it takes time he gives an example of the two CEOs of of Netflix Ted Sandos and Greg Peters Ted's been at um uh Netflix 25 years Greg has been at Netflix for 15 years look at where Netflix was 10 years ago in terms of their Core Business says Alan they know the path of being stubborn hardworking innovating having a vision and going after it the road is not always straight to the top I believe them when they told me that gaming was Bor because if Netflix want to entertain the world there's no way around it they

need to be in games when I look at these two leaders in particular but also the rest of them I believe in their full commitment basically uh they're younger people used to the modern Market um they're not um uh Disney or BBC who been going for in some cases hundreds of years um uh they are um they are very actively uh they know the journey that needs to go on that's his belief in it um now I got a bit more clarity around Netflix is officient we've got an idea now what they're trying to do they're trying to create trans media projects narrative projects party games it has a We Vibe to it but with with some differences on there um but he keeps tell he keeps coming back to it he doesn't know which of these is going to work he doesn't know what's going to resonate the most uh and he keeps saying that ultimate the proof is in the delivery it sounds exciting it sounds promising potentially unlocks loads of players for the games industry um but ultimately there's uh there's no knowing what will work and it all comes down to the execution but there's no disguising he was excited um Netflix is after all

the biggest entertainment platform in the world and if tcan and his team make games a serious part of it that may prove to be a boom for the entire games industry uh we ended our chat and he said sometimes I use the phrase that we need that we need to find our voice we have all these things to think about and the audience we can reach how are we using all the elements to do new things we have the IP we have the transm media element of it the Netflix muscle we can Flex I must confess it's a really exciting place to be I have to say it's really interesting to see Netflix really pushing in this area and being open about their plans and doing something that isn't just trying to be a new Xbox and trying to be a new PlayStation in fact paps the market really could do with a new Nintendo Wii so that was my um chat with Netflix you can read the um interview and the analysis on the game business.com uh uh right now and we will be back next week obviously possibly not with four shows but uh we have a we have an interview with the CEO of Arrowhead the makers of Hell divers 2 we've got that going out on Tuesday and then also next week is the reveal of the Nintendo

switch 2 um which I am extremely excited about we're going to have a special show on the on the Thursday special news analysis show where we'll be diving into that reveal um all about that um next week uh and we may have something else for you as well another little bonus surprise um but until then thank you for tuning in this week I really appreciate all the support all the feedback we've had so many comments um so many emails it's been a really successful week the first show actually um had more downloads I think most podcasts ever worked on including the one that I worked on last year um and the first um story went everywhere and I was really about GTA 6 and so I'm really feeling pretty excited but obviously I know it's all about consistency it's about keep doing this um I hope you keep tuning in if you've got anything you think we should be doing better you don't like so much you like to change Chris stop talking so much keep talking shoved um the G dropped me a line um and um and we'll we'll take all that and we'll try and build a show that is um together that's good the entire games industry uh

until then thank you for listening and or watching um and and have a good weekend