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Netflix Wants to Take on Microsoft, Sony

The company already has its hands full with Disney, but it has set its sights on two major players.

As we've seen in one unfolding chapter after another as the months have rolled by, Netflix  (NFLX)  is having a pretty rough year.

Its woes seem to have started after its earnings call on April 19, when it delivered news of the first decline in annual subscriber growth in more than a decade. 200,000 folks had signed out of the service permanently since the beginning of the year. Even worse, it also predicted the loss of another two million by June.

Netflix's stock plummeted 35% in the wake of the news, leading folks to speculate on whether the streaming giant's content was the reason for the decline, or simply that the streaming space Netflix once pioneered is now populated with so many other options.

By the time Netflix reported its Q2 earnings, things were looking up: the company reported a loss of 970,000 subscribers rather than the terrible sounding two million, and earnings per share were better than expected, coming in at $3.20. 

But many investors are still skeptical, and the stock has never recovered from the April slump, remaining down 37.21% at the time of this writing.

Netflix has started to explore other avenues for potential revenue, one of them being the mobile gaming market, which has been a source of explosive growth over the last decade and is estimated to reach a value of $20.3 billion this year. 

The streaming company has begun an aggressive launch of a mobile gaming library with a goal of launching 50 titles by the end of 2022. While the games in it so far are perfectly serviceable, has left a lot of consumers underwhelmed, wondering if this is all Netflix has in its hand.

Now, we know the answer to that is no.

Netflix Lead

What Is Netflix Planning?

IGN reports that Netflix has a job listing up that indicates the company is building out a cloud gaming project.

"We are looking for a rendering engineer to support our cloud gaming service," the listing reads. "In this role, you will help optimize the rendering of games so we can render multiple games on our cloud gaming appliances. You will also assist with the development of SDKs to enable game developers to succeed in writing high-quality games for the Netflix cloud games ecosystem."

Several other jobs are listed that indicate requisite cloud gaming experience, such as a senior security software engineer role with experience in "mobile or cloud gaming architectures."

Will Netflix Challenge Microsoft, Sony?

When it comes to the cloud gaming space, Microsoft  (MSFT)  was the first to launch a subscription-based service for games similar to the model that we're all used to with movies and TV. 

Called Xbox Game Pass, the service starts at $10 a month and offers access to roughly 400 games. Most notable, however, is that the service had many new games on launch day -- something that was previously unavailable anywhere else. The service had 25 million subscribers as of January 2022.

Since Game Pass launched in 2017, Sony  (SNEJF)  has remodeled its PlayStation Plus service into three new tiers to better compete with Game Pass. Previously, a PlayStation Plus subscription allowed users to download two older games per month for free, get a discount on new games, and have access to cloud storage and multiplayer options.

While the big names in gaming have been at this for a while, Netflix certainly has what it takes to launch a full scale video game streaming service. But it will have to be very clever about finding a way to appeal to gamers who have already been using GamePass or PlayStation Plus for years. Its best option might be to offer new top-tier releases for a small upcharge to the current subscription price, which could make its service much more appealing in terms of value.