Global streaming service Netflix recently announced it is exploring a cloud gaming offering, as well as it will open a new gaming studio in Southern California, United States. This would be the company’s fifth studio, after one in Helsinki, Finland, and others like Boss Fight Entertainment, Night School Studio and Next Games, which are each designed to develop games catering to different tastes.
The new California studio will be led by Chacko Sonny, the former executive producer on gaming title Overwatch. At Blizzard Entertainment, Overwatch was a massive success, netting billions of dollars.
Since it communicated its strategy to foray into gaming, Netflix has 14 games in development in its own studios and 35 games on the service now. In total, Mike Verdu, VP of Games, said it has 55 games “in flight” at present. These games include experiences based on original IP like Stranger Things, as well as licensed IP like Spongebob Squarepants. Netflix is also developing original games.
Over the last couple of years, the company founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California, has been hiring important executives for its gaming division, such as Verdu himself, Roberto Barrera (Head of Gaming Strategy, Planning and Analysis), Leanne Loombe (Head of External Games), Amir Rahimi (VP of Game Studios), and now Sonny.
A LONG TERM STRATEGY
The company noted that the one-year anniversary of its gaming launch is approaching. Netflix continues to invest in mobile gaming, despite the recent report that less than 1% of its subscriber base plays its games. According to app analytics firm Apptopia, Netflix games have been downloaded 23.3 million times in total, and on average, there are 1.7 million daily users. This means that less than 1% of the streaming giant’s subscriber base (around 223 million people) is interested in Netflix’s games. In comparison, leading mobile games like Subway Surfers, Roblox and Among Us each have more than 100 million downloads, per Apptopia. Netflix has a long way to go before it can reach this level of popularity. If Netflix continues exploring leveraging its own IP for new games, that approach could draw in more subscribers. To play a Netflix mobile game, subscribers can find them free in the streaming app in the dedicated games row. Players are redirected to download a separate app for each game. Once downloaded, only Netflix subscribers can play the games, which are available on Android and iOS devices.
The news of the gaming studio launch and cloud gaming plans arrived as Netflix presented its Q3 earnings, which sees the streamer beating expectations with the addition of 2.41 million subscribers, bringing the total to 223.09 million. Netflix had forecast a net gain of only 1 million subs in the third quarter. This was because it experienced two very grim quarters in first half of 2022, losing a total of 1.2 million global subscribers. Now, the provider reported earning USD 7.93 billion in revenue in Q3 2022. For the future, Netflix expects 4.5 million paid net additions in Q4 2022.