Phil Spencer thinks Netflix is smart for leveraging its successful streaming business and jumping into video games.
In an interview with Kara Swisher for the New York Times’ Sway podcast, Spencer spoke more in-depth at video games’ continued growth and how it’s oftentimes a trendsetter for tech companies. Including how some tech companies look to games for inspiration.
Take Netflix, for example, which announced it’s making steady inroads into games first by including mobile games in with existing Netflix subscriptions, and then by acquiring critically-acclaimed studios like Nightschool. Spencer believes this is the right approach for the streaming giant.
“I think it’s smart what [Netflix is] doing,” Xbox boss Phil Spencer says. “They’re buying some studios. They’re learning about the creative process of interactive entertainment. And I think it’s a very smart way for them to move into the space.”
Netflix Spotlight: December 2021
Netflix isn’t just about ready to compete with Xbox quite yet. Despite hiring an ex-EA executive to run its new games division, Netflix is primarily focused on the casual mobile market, which is still big business. Netflix has a library of popular shows that can easily become games and the company even bought the award-winning studio behind Oxenfree.
While the content is growing, Spencer sees Netflix has big potential thanks to its existing cloud and community. “Netflix clearly has cloud. Amazon has cloud. Google has a real cloud capability. But without content, community, and cloud, I think getting into gaming right now — and you can see this in what Netflix is doing.”
Xbox has taken a page from Netflix’s book with Xbox Game Pass, which has long been popularly called the Netflix for games. Something Spencer doesn’t disagree with.
“From a streaming standpoint, it is. I’d say the difference for us is in the business model of — you can buy every game that’s available on the subscription, which is a little different than a music subscription or a movie subscription.”
Spencer says the transactions business is still Xbox’s biggest business and bigger than subscriptions, though he says subscriptions are growing faster.
The Xbox boss also took time to talk about Xbox’s social network and how it’s focused on games and not social discourse, as well as address industry topics like the metaverse and Activision’s current controversies.
Matt T.M. Kim is IGN’s News Editor. You can reach him @lawoftd.