Netflix Delves Into Video Games as Streaming Growth Slows

By Adedapo Adesanya

A streaming service, Netflix, is expanding its footprint into video games as the streaming industry is experiencing slow growth due to the COVID-19 pandemic.

In its quarterly letter to shareholders, the firm explained that it was taking this step to keep the attention of customers in the increasingly competitive world of streaming television as the once pandemic boom has seen drops in major markets – the United States and Canada.

Netflix said it was in the early stages of expanding its video game offerings, which would be available to subscribers at no extra charge. The company will initially focus primarily on mobile games.

The streaming service offered details of its plans to move into games in its latest update, confirming cooling growth even as the Silicon Valley giant spins off hit shows.

“We view gaming as another new content category for us, similar to our expansion into original films, animation and unscripted TV,” the company said.

The multi-year effort will start “relatively small” with games tied to Netflix hits, Chief Operating Officer and Chief Product Officer, Mr Greg Peters noted.

“We know that fans of those stories want to go deeper. They want to engage further,” Mr Peters said.

Netflix has dabbled in video games with a few titles linked to series including Stranger Things and The Dark Crystal: Age of Resistance.

On his part, co-CEO, Mr Reed Hastings said gaming and other ventures such as podcasts and merchandise sales will be “supporting elements” to help attract and retain customers to its core business of streaming video.

The company projected it would add 3.5 million customers from July through September.

For the just-ended quarter, Netflix added 1.54 million customers, beating analyst projections of 1.04 million. Total subscribers numbered 209 million at the end of June.

A year ago, Netflix picked up 10.1 million subscribers in the second quarter.

This year, Netflix felt the impact of COVID-19 on TV production, which left the company with a small menu of new titles.

The company also had to deal with competition from Walt Disney Co’s Disney+, AT&T Inc’s HBO Max and other services attracting customers and in addition, summer blockbusters returned to the cinemas.

The easing of pandemic safety measures also lured people out of their homes and away from their televisions.

Netflix promises a heavier lineup in the second half of 2021, including new seasons of “You,” “Money Heist” and “The Witcher.”

If its subscriber forecast pans out, Netflix will have added more than 54 million subscribers over the past two years, a pace consistent with its annual additions before the COVID-19 pandemic, the company said.

It also noted that streaming television still accounts for a small portion of overall viewing time and that its service is less mature outside the United States.