Streaming giant Netflix to include games for subscribers at no added cost
In a letter to investors, Netflix has confirmed that it is in the early stages of adding games to its streaming portfolio. In the letter, the company said that mobile games would be the first to be added to the platform.
It added that – “The time is right to learn more about how our members value games.”
Despite the news, the company’s share stuttered in after-hours trading after it failed to meet expectations on subscriber numbers. Analysts had estimated subscriber growth of 5.86 million in the coming months. However, the company has said that it now expects to sign up 3.5 million subscribers in the three months up to the end of September.
In a financial statement, Netflix said – “Covid has created some lumpiness in our membership growth, higher growth in 2020, slower growth this year, which is working its way through. We continue to focus on improving our service for our members and bringing them the best stories from around the world.”
Covid – A mixed blessing for Netflix
The global pandemic has been devastating, but some companies have thrived during the pandemic, Amazon being a stand-out example. For Netflix, the pandemic has been something of a double-edged sword.
A surge of sign-ups as the world moved into lockdown saw its subscriber numbers soar to 209 million members. However, lockdowns and restrictions severely dented its production schedule and have delayed the release of some big productions.
The company said that it expected it was over the worst of these issues, saying – “Covid and its variants make predicting the future hard, but with productions largely running smoothly so far, we’re optimistic.”
Despite the production problems and the slowdown in new subscriber numbers the company still posted revenues of $7.3 billion up to the end of June. Profits were down from $1.7 billion to $1.35 billion, a drop that Netflix cites as being due to additional investment in apps and adding more non-English language content to its portfolio.
The move into the gaming market is seen as a way for Netflix to distinguish itself from the increasing amount of competition in the streaming market. The highly successful launch of Disney + and existing services like Amazon Prime are seen as being in direct competition and the addition of games to the platform would give Netflix a unique selling point in a competitive marketplace.
Whether this is a successful move or not remains to be seen. Independent telecoms analyst says it is not a forgone conclusion.
“The company will have to dedicate significant resources including time and investment with no guaranteed success, he said. “This is a long-term play as Netflix needs to strongly think about retention and engagement,” he added.
He also warned that the gaming market has its own share of tough competition, and it could be years before Netflix makes any serious inroads into the niche.
Netflix appears to be committed to the move though, and recently announced the hiring of Mike Verdu, previously vice-president of games development for Electronic Arts.