Last Updated on 2021-08-02 , 9:29 am
Netflix has been everyone’s go to for movies and binge watching of television series.
Now, it’s going to be adding more video games to its list of services.
Oh, and did I mention that the games will–technically– be free?
That’s right, to all the Netflix subscribers out there: there will be no additional charges for the video games.
Netflix To Expand Video Game Offerings, No Extra Charge Added
With a projected weak subscriber growth and growing competition, in addition to the lifting of pandemic restrictions that had kept people at home, Netflix Inc has announced that it will be making a deeper venture into video games.
Indeed, in after-hours trading on Tuesday, shares for Netflix hovered even at about US$531.10.
After stay-at-home orders to curb the COVID-19 pandemic fuelled a boom in 2020, Netflix is now experiencing a sharp slowdown in new customers. The company reported losing about 430,000 subscribers in the second quarter in the United States and Canada—this is only its third quarterly decline in 10 years.
Netflix Inc has already announced that it is in the early stages of expanding its video game offerings, focusing primarily on mobile games initially. The video games will be made available to all subscribers at no extra charge.
In its quarterly letter to shareholders, Netflix said: “We view gaming as another new content category for us, similar to our expansion into original films, animation and unscripted TV.”
According to Chief Operating Officer and Chief Product Officer Greg Peters in a post-earnings video interview, this multi-year effort of expanding its video games offerings will start “relatively small”, starting with games tied to Netflix hits.
“We know that fans of those stories want to go deeper. They want to engage further,” said Peters.
Currently, Netflix has already released video games linked to series such as Stranger Things and The Dark Crystal: Age of Resistance.
According to CNA, analysts have said that Netflix needs to find new ways to jump-start subscriptions after years of rapid expansion, or else risk losing business. For example, according to eMarketer, Netflix’s share of US revenue from subscription streaming video will shrink from nearly 50% in 2018, to 30.8% by the end of 2021.
Investing.com senior Jesse Cohen similarly said, “Netflix delivered another underwhelming quarter as competition in the streaming space heats up”.
Well, hello there, Disney+.
He added: “The absence of any new looming growth catalysts has been one of the main reasons for Netflix’s relatively mild performance this year.”
Gaming and other ventures such as podcast and merchandise sales will be “supporting elements” to help attract and retain customers to its core business of streaming video, said Reed Hastings, Co-CEO of Netflix.
Netflix’s Subscriber Projections
From July through September, Netflix projected that it would add 3.5 million customers. According to analysts surveyed by Refinitiv, Wall Street had expected a forecast of 5.5 million.
In comparison to the 10.1 million subscribers added a year ago in the second quarter, Netflix only added 1.54 million customers in the just-ended quarter. That being said, the company still managed to beat analysts projections of 1.04 million customers being added.
At the end of June, the total number of Netflix subscribers numbered 209 million. The company’s earnings for April through June were at US$2.97 per share, which was below the average forecast of US$3.16.
The drop in customer subscription can be attributed to the impact of COVID-19 on TV production, which left only a few new titles for Netflix.
At the same time, the company experienced growing competition, with Walt Disney Co’s Disney+, AT&T Inc’s HBO Max and other services attracting customers, along with summer blockbusters returning to theatres.
The easing of pandemic restrictions had also led to people coming out from their homes and leaving their televisions.
In the second half of the year, Netflix promises a bigger lineup with new seasons of You, Money Heist and The Witcher.
If all goes according to its subscriber forecast, Netflix would have added 54 million subscribers over the past two years, bringing it back to a pace before the COVID-19 pandemic, said the company.
Notably, streaming television still accounts for a small portion of overall viewing time. Its service is also less mature outside the United States, reports CNA.
“It’s still an enormous prize and we are still in the best position to run after it,” Co-CEO of Netflix Ted Sarandos said.
Read Also:
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Featured Image: Vantage_DS / Shutterstock.com
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