Is Cloud Gaming the Next Big Thing for Netflix?

This week, VP of Netflix Games, Mike Verdu, made a post announcing that the company is going to begin beta testing its cloud streaming technology; bringing two games—Oxenfree and Molehew’s Mining Adventure—as part of the test to limited members across Canada and the UK. The games can be played on select smart TVs and computers, with players being able to control the action on their TVs via a virtual controller that will be displayed on their smartphones. Verdu states that Netflix has partnered with Amazon, LG, Nvidia, Roku and more to have this developing streaming technology be available on those company’s respective line of TVs.

It’s interesting that Netflix are continuing to push their gaming side of things, as it was reported by CNBC last year that less than 1% of Netflix users are downloading its games, with around 1.7 million of their 221 million subscribers spending time on its games daily according to app analytics company, Apptopia. One would think, then, that numbers like that would make a multi-billion dollar company such as Netflix cut their losses and move on, much like Google did with their now defunct service in Stadia. But it seems Chief Operating Officer, Greg Peters, has a different vision, stating in an earnings call that, “We’re going to be experimental and try a bunch of things.”

Netflix Games
Ah, yes, the sequel we’ve all been waiting for. Oxenfree looks cool, too.

Cloud gaming has been around for a while now, though has really only existed in the way Netflix are developing by one other company: Microsoft. Xbox Cloud Gaming—colloquially known as ‘Xcloud’—launched on September 15th, 2020, and remains the only service to allow for full cloud streaming of both high-budget AAA titles, as well as a slew of indies. Game Pass Ultimate members are able to connect to the service with any of their smart devices (save for TVs, though Microsoft are said to be developing that as well) and play hundreds of cloud-enabled games with any bluetooth connected controller or—for titles that support it—the virtual controller, from anywhere as long as they have a stable internet connection.

Google’s approach to cloud gaming was an odd one from the onset. Stadia wasn’t a subscription service like Game Pass where once signed up one would have an entire library of games they could then play via the cloud. Rather, Stadia served as a vessel that though did the same thing as Xbox in terms of the technology of not needing a physical console to play, came without an actual library of games with players instead having to purchase them separately. You can understand why consumers thought this approach laughable, as not only did they have to sign up for the service for the monthly fee of $10 USD, but now also needed to pay for the games. The argument, I suppose, was that Stadia would essentially be a “cloud console,” effectively getting rid of the need of a box and instead giving you direct access to your games, which you could play anywhere. In theory, this works, and could potentially have disrupted the console market. In practice, however, the technology is simply not at a place where people would feel comfortable paying $70 USD for a AAA game to then play it via a service that may not provide the most seamless experience.

And so, another Google service comes and goes. Credit: Google.

That experience is one that even Microsoft are still trying to figure out. Though I will say, my qualms with Microsoft as a company aside, I cannot deny that Xbox Cloud Gaming is a very commendable service. It was through the service that I was able to play games like Gears 5, Outer Worlds, and a number of indie titles while also logging in over a hundred hours into Halo: Infinite before even owning a Series X|S. Using an accessory like the Razer Kishi to transform my phone into a makeshift handheld console akin to the Nintendo Switch, and playing these games while on vacation thousands of miles away from home was honestly a surreal feeling.

The technology is there for Netflix to make their version of cloud gaming work, but it’s not perfect. Just like the early days of video streaming, a hit to visual fidelity is to be expected. Even though I was more than happy with how a game like Halo: Infinite looked on my phone, there was still a noticeable dip in overall sharpness. Add on top of that the occasional (and at times frequent) hitches in the playback with noise and pixelation, occasional lag in audio, as well as some stutters to the frame-rate and you can have yourself a less than optimal experience; especially if you’re someone who’s sensitive to such audiovisual quirks.

The bigger hurdle Netflix will need to address is latency. Though most of my recent experiences with Xbox Cloud Streaming have been fairly decent when it comes to input lag, I remember the early days of the service where using a bluetooth controller was essentially impossible, hence my needing of a direct connection via the Razer Kishi. Though the experience has vastly improved, with the input lag while using wireless controllers being (mostly) unnoticeable during casual play, the experience is still more consistent with a wired connection. It should be noted that my current setup is also the most optimal for Xbox Cloud Streaming. Not only do I have a fast internet connection, but I also live in a city where one of Microsoft’s Azure Data Centers are located, which from my experience when talking to others that have had trouble getting ‘Xcloud’ to work properly, makes a huge difference.

Give it up to Team Xbox for actually delivering on this. Credit: Microsoft

This leads into another hurdle Netflix has to face: money, and server locations. Despite what the company might tell you, Netflix is still incredibly profitable. Still, being a multi-billion dollar company is different than being a multi-trillion dollar company, and Microsoft have both the capital and resources to invest in expanding their library of games by gobbling up massive game developers, and continuing to add more top-of-the-line datacenters globally—even with reports suggesting that their Game Pass subscriptions have slowed down of late.

Personally, I’m all for Netflix providing even some competition to Xbox in the cloud gaming market. Their current library of games is quite diverse, with many notable and acclaimed indie titles available on the platform already. If they can work with bigger publishers to bring in a few heavy-hitting AAA games, and invest enough resources to make an accessible service that just works for the casual gamer, then they could potentially build something that Google couldn’t, and provide some much needed competition for Microsoft. However, if the words of their aforementioned COO during last year’s earnings call is anything to go by, it’s not Microsoft that they see as a competitor, but rather Epic Games and TikTok of all companies. Not sure what that necessarily means, though if it’s a sign that Netflix are looking to create a more casual, mobile game focused library that’s riddled with micro-transactions, then it’d be a shame— albeit unsurprising as this is Netflix we’re talking about, after all.

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