Assessing the outlook for Netflix’s and Amazon’s TV gaming strategies

Omdia view

Summary

Netflix and Amazon are testing an enticing theory: that millions of consumers who don’t own games consoles will embrace TV gaming. The streaming giants aim to bypass what they perceive as traditional barriers—expensive hardware, complex gameplay, and premium pricing—by offering simple “party” games controlled via smartphones, effectively free to hundreds of millions of their existing subscribers. The Thanksgiving and Christmas holiday periods will provide the first meaningful tests of consumer appetite for their strategies, although expectations should remain modest. The platforms face the challenge of competing against established gaming alternatives and their own core video offerings—a dynamic that may ultimately constrain adoption regardless of quality or execution.

Similar strategies—but with crucial differences

If Amazon and Netflix are correct, the market could be huge. About 30–40% of adults in major developed and developing markets say they regularly play games on their smartphones, tablets, or PCs, but do not own consoles, according to survey data from Omdia’s Consumer Research – Devices, Media and Usage Spotlight Service. Rough estimates based on that data suggest this cohort accounts for tens of millions of consumers in many of those markets. Worldwide, this addressable audience for Netflix and Amazon’s take on TV gaming could run into the hundreds of millions and potentially billions if they can convince non-gamers to play (Figure 1).