Netflix is getting into game streaming, setting up showdown with Microsoft and Sony

Daniel Howley

Netflix (NFLX) announced on Monday that it's launching a test of its video game streaming services, setting up a potential showdown with Microsoft (MSFT) and Sony (SONY) in the nascent cloud gaming industry.

The test, which Netflix said is a limited beta test, will be available for a small number of subscribers in Canada and the UK starting Monday. Users will be able to stream games over the internet via select TVs, and on Macs and PCs through the Netflix website.

"Our goal has always been to have a game for everyone, and we are working hard to meet members where they are with an accessible, smooth, and ubiquitous service," Netflix VP of games, Mike Verdu, wrote in a blog post. "Today, we’re taking the first step in making games playable on every device where our members enjoy Netflix — TVs, computers, and mobile."

Netflix announced its launching a cloud streaming beta in Canada in the U.K. as it pushes further into the gaming industry. (Image: Netflix)
Netflix announced its launching a cloud streaming beta in Canada in the U.K. as it pushes further into the gaming industry. (Image: Netflix) (Netflix)

Cloud gaming allows users to stream games from a company's servers directly to their TVs, laptops, desktops, smartphones, and tablets. Since the servers handle the graphics processing, gamers can play on traditionally underpowered devices, meaning they don't have to spend money on high-end gaming PCs or pricey consoles.

But you need a steady high-speed internet connection to ensure games come through clearly and lag free. If an on-screen character doesn't immediately respond to a player's controller input, it throws off the entire experience.

Netflix is starting out with two games, Night School Studio's "Oxenfree" and "Molehew's Mining Adventure." Netflix also says gamers will use their smartphones as controllers when playing on a TV and a mouse and keyboard when playing on a laptop or desktop.

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Netflix has been offering mobile games as part of its subscription for some time, and its clear from its latest move that it sees gaming as another possible growth area moving forward.

Microsoft is the leader in the cloud gaming space thanks to its Xbox Cloud Gaming service. A part of Microsoft's $16.99 per month Xbox Game Pass Ultimate subscription, Xbox Cloud Gaming allows players to stream a massive library of games to their TVs, smartphones, tablets, PCs, and Macs.

Microsoft also releases first-party titles via Xbox Cloud Gaming on the same day they go on sale at retail. Sony also has a cloud gaming service as part of called PlayStation Plus Premium subscription for $17.99 per month. Sony has also recently started testing streaming PlayStation 5 games via the cloud.

Both Nvidia (NVDA) and Amazon (AMZN) also offer cloud streaming services, as well. But giving users the option to stream games isn't a surefire win for Big Tech firms.

Google previously offered its own cloud gaming service called Google Stadia, but folded the venture due to a lack of users. According to The Wall Street Journal, though, the company is looking at building cloud gaming into its YouTube business.

Cloud gaming is still in its early stages, but companies are banking on it as a major piece of their gaming portfolios moving forward. Part of the reason Microsoft is acquiring "Call of Duty" maker Activision Blizzard is to build out its cloud offerings. The Federal Trade Commission initially filed a lawsuit seeking to block the acquisition.

Daniel Howley is the tech editor at Yahoo Finance. He's been covering the tech industry since 2011. You can follow him on Twitter @DanielHowley.

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