Mobile video games will be the focus of the Netflix’s video game initiative.
These future mobile games will be included in members’ subscriptions at no additional cost, the Los Gatos, California-based streaming TV provider company said in its second quarter 2021 shareholder letter Tuesday.
“We view gaming as another new content category for us, similar to our expansion into original films, animation and unscripted TV,” the company said. “We’re excited as ever about our movies and TV series offering and we expect a long runway of increasing investment and growth across all of our existing content categories, but since we are nearly a decade into our push into original programming, we think the time is right to learn more about how our members value games.
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Netflix last week hired video game executive Mike Verdu as its vice president of game development. He had previously been at Facebook-owned VR company Oculus, where he oversaw games. Prior to that, he had worked at Electronic Arts and Zynga.
The company is in “the early stages of further expanding into games, building on our earlier efforts around interactivity,” Netflix said, noting its Black Mirror Bandersnatch “choose your own adventure” film and “Stranger Things” video games.
This news about video games comes as Netflix sees its growth slowing. Worldwide, Netflix added 1.5 million new subscribers in the April-June period, beating their own 1.2M forecast. But the net TV provider lost 430,000 subscribers in the U.S. and Canada during the period.
In the same period a year ago, Netflix added 10 million new global subscribers with about 2.9 million new additions from the U.S. and Canada.
And the company’s forecast of 3.5 million new subscribers expected for the current quarter (July-Sept.) is below what analysts hoped (5 million or more).
“The pandemic has created unusual choppiness in our growth and distorts year-over-year comparisons as acquisition and engagement per member household spiked in the early months of COVID,” the company said.
Netflix shares were down 1% in after-hours trading.
As for growing competition in the streaming market, Netflix pointed to the Warner Media-Discovery merger and Amazon’s acquisition of studio MGM of “the ongoing industry consolidation as firms adapt to a world where streaming supplants linear TV.”
Such consolidation not affected Netflix’s growth “much, if at all,” the company said. “While we are continually evaluating opportunities, we don’t view any assets as “must-have” and we haven’t yet found any large scale ones to be sufficiently compelling to act upon. … We are mostly competing with ourselves to improve our service as fast as we can. If we can do that, we’re confident we can maintain our strong position and continue to grow nicely as we have been over the past two-plus decades.”
Netflix revenue for the quarter of $7.34 billion slightly beat expectations of analysts polled by S&P Global Market Intelligence of $7.32 billion.
Net income of $720 million fell short of analysts expectations of $1.4 billion.
Follow Mike Snider on Twitter: @MikeSnider.