Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and others are crafting a bold new vision for video games. In their view, the future of gaming looks a lot like the present in music and video streaming: Games will live on servers, not on user hard drives, and access to the games will likely come in the form of a monthly subscription, a la Spotify (NYSE: SPOT) or Netflix (NASDAQ: NFLX). No wonder, then, that so many headlines are asking what the "Netflix of gaming" will look like -- and who will own it.
But while streaming domination in the world of mainstream games made by big gaming studios and offered on gaming PCs and major video game consoles is likely a few years and a messy competitive revolution away, a less typical kind of "video game" is gaining traction in subscription streaming already.
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Following Netflix's success with the interactive film Bandersnatch, Alphabet's YouTube is going after interactive entertainment that lets the viewer choose what happens on screen. And Netflix hasn't forgotten about what it started: The streaming giant is making moves that suggest interactive content will play a big role in its future.
Netflix is looking more like a game developer
To make content like Bandersnatch -- which Netflix describes as "a mind-bending tale with multiple endings" -- Netflix needs more than its film studios and their experts. Writing a "script" for an interactive program like Bandersnatch is not entirely (or even all that much) like writing a traditional film. Interactive films play like games, so Netflix needs game designers to make this sort of content work.
So, naturally enough, Netflix is hiring these people. And even as it advertises jobs for game designers, it has announced more interactive content. Variety in March quoted a Netflix executive as saying the company was "doubling down" on "interactive storytelling."
Netflix appears to be moving on from partnering with outside developers (as it did for Minecraft: Story Mode) to making its interactive content in-house.
While there are lots of things that suggest that Netflix is making more menu-based content like Bandersnatch, there hasn't been much that suggests viewers will be able to move characters around on a screen in real time. For now, menu-based choice is all Netflix seems focused on.
But a more fully interactive type of game might not be out of Netflix's long-term reach. The company's animation department is adding more professionals who specialize in motion capture, rigging, and related techniques that are used in both computer-animated films and video games.
Netflix has been denying rumors for a while now that it is building out video game streaming offerings, so although it's purely speculative at this point, it's not out of the question that Netflix's interactive content strategy would lead to games that look more like "real" video games.
Who cares what a "real" video game is?
When it comes to the future of video games, observers are understandably interested in what will happen with big-time titles and popular video game consoles. But simple games that are easy to use (and to get hooked on) matter, too. This is obvious in the mobile gaming space, which is expected to be worth nearly $140 billion by 2021.
Apple's Arcade is notably focused on mobile games and new original gaming content. So why shouldn't Netflix get aggressive with "games" that blur the line between film and gaming? Would it really be that surprising to see a Netflix title that requires the use of a video game controller of some kind? After all, the goal of Netflix's original content strategy is to eat up user hours and get fans hooked on exclusives. And who logs longer hours or gets more connected to specific titles than gamers?
Netflix's and YouTube's investments in this sort of content are blurring the line between video streaming and video game streaming. If Netflix has its way, your lazy Sunday Netflix binge might just turn you into a new kind of gamer.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Stephen Lovely owns shares of Apple and Netflix. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, and Netflix. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.