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Should Streaming Services Invest in Video Games?

Video games are one of the fastest-growing product offerings in tech. In the same breath, streaming services such as Netflix and Hulu have revolutionized entertainment. The question is, should video games be their next investment? While the resounding answer is a big yes, there might be some risks to consider. But first, let’s look at the benefits of streaming platforms investing in video games.

1. Increased User Engagement

The more time users can spend on a platform, the better. Streaming services such as Netflix use algorithms to study user habits. They collect data such as preferences and watch time to make helpful predictions. Video games are a good way to engage users while collecting data. Such platforms can then make customized recommendations. For example, a user who enjoys action video games may enjoy similar movies.

2. Additional All-Round Benefits to User

Videos can improve user satisfaction because they offer comprehensive benefits. Unlike movies or films, video games engage a user’s brain, helping them improve functions such as memory. Other users may even experience increased manual dexterity. A shift in product offerings could change how people experience entertainment in the same way COVID-19 changed how we view fun. The National Golf Foundation says that in 2020, 3 million people played on a golf course for the first time.

3. Potential for Increased Subscriptions and thus Revenue

Video games could be a great way to encourage more subscriptions. For example, if someone has a separate subscription for video games and another for video games, having a platform that consolidates the two can save costs and be more valuable. Videos have been shown to increase sign-up rates in other fields. A survey by Career Builder shows that candidates are 34% more likely to apply for a job if it has a video. So, there’s promise investing in video games could increase subscriptions and, consequently, revenues.

4. Attract New Audiences Who Love Video Games

New offerings are one of the easiest ways to diversify consumer audiences, and video games are quite popular now. Streaming services can reach a new demographic by adding video games. Attracting a new audience allows streaming platforms to learn about specific market segments and their interests. Such platforms can also leverage social media to market their new offerings. According to Oberlo, 86% of marketers already use Facebook for advertising.

5. Potential for Building Loyal Communities

Have you noticed how video games bring like-minded people together? People want to play but feel better in communities. Entire online communities are built around video games. Investing in video games offers streaming services a good opportunity to increase community building and brand engagement. Users can generate their content and become loyal brand ambassadors.

Considering the Risky Side

Video games are undoubtedly one of the best ways to increase engagement, satisfaction, and revenue bump. Still, it’d be prudent to consider the risks of streaming services. Would this move offer benefits only without costing anything?

The first big consideration would be a cost-benefit analysis. Investing in video games is no cheap endeavor. It’d require expertise, infrastructure, and strategic marketing. If the investment had a low ROI, it’d not be worth it. Yet if video games are the next breakthrough in digital entertainment, then the ROI would validate the spending.

Another risk to consider is market reception. Video games have been around for long, so competition is stiff. What difference would streaming services bring? If the market analysis were overly optimistic, or worse, wrong, it’d cost a company millions in investment.

Bringing it all together, the answer to the question: should streaming services invest in video games? It is a resounding yes. Still, there’s a need for adequate market research to ensure this is what the market wants.


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