News Update

Netflix Confirms Move Into Video Games As Its Growth Slows

• ByStartupStory     |    July 21, 2021

Netflix reported its worst slowdown in subscriber growth in eight years as people emerge from their pandemic cocoons. So, it’s adding a new attraction to its marquee: Video games. On Tuesday, Netflix announced it will offer video games in its existing subscription plans at no extra cost, but didn’t say when that service will launch or what kind of games it will be developing. The confirmation of the long-anticipated expansion came in conjunction with the release of Netflix’s latest earnings report. That financial breakdown showed the video service added 1.5 million subscribers during the April-June period. That’s slightly better than the modest increase that management forecast after the service stumbled to a sluggish start during the winter months, but still far below its growth rate in recent years.

Netflix’s net gain of 5.5 million subscribers through the first six months of this year represents its weakest first-half performance since 2013, a time when the company was still rolling out more original programming as it branched out from licensing existing TV series and movies. Now Netflix is taking another leap by offering video games that intend to produce itself as part of what it described as a multi-year expansion. “The reason we’re doing them is to help the subscription service grow and be more important in people’s lives,” Netflix co-CEO Reed Hastings told investors during a Tuesday discussion.

Greg Peters, Netflix’s chief product officer, said the company will initially focus on mobile games before eventually expanding to consoles and TV sets as well. The games initially will be tied to Netflix’s most popular programming, Peters said, but standalone titles may be added to the mix too. He even speculated that Netflix eventually may create a TV series or film inspired by one of its video games. “There’s a big, big prize here, and our job is to be really focused,” Peters said. Irrespective of the slow growth rate Netflix continues to be the world’s biggest streaming service in an increasingly competitive field that includes Walt Disney Co., HBO, Amazon and Apple. Netflix has 209 million worldwide subscribers.

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