Streaming giant Netflix (NFLX) which has been quietly beefing up its gaming operations all of last year, as diversification becomes a big focus for the company, has taken its plans up a notch to be able to consistently launch new games globally to all of its members.
"The love of film and TV and games has built big businesses for people who can figure out what people love, build a creative environment that creators know how to feed it and then deliver it to fans with a value proposition that they appreciate," Netlfix Co-Chief Executive Ted Sarandos said in the company's latest earnings call.
Netflix also acknowledged games is a pretty great business to be in.
"Films that you love and series that you define yourself by and games that thrill you, that's a pretty great business. We're thrilled to be in it," added Sarandos.
Netflix had also hired former Electronic Arts (EA) and Facebook, (now Meta Platforms) (FB) executive Greg Peters in July to lead its gaming division. Peters is chief operating officer and chief product officer at Netflix.
Netflix had even hinted at a potential video game based on its top show "Squid Game" in October last year after reporting stellar third quarter earnings, as it seeks alternate revenue streams to add to its subscription service in a bid to compete with rival Disney (DIS) .
"Imagine three years from now and some future Squid Game is launching, and it comes along with an incredible array of interactive or gaming options and it's all built into the service," Netflix Co-Chief Executive Reed Hastings had said in an earnings call in October 2021.
The move also comes at a time when rivals like Amazon (AMZN) , Microsoft (MSFT) , Alphabet's (GOOGL) Google and Sony have all introduced video game streaming services that use modern cloud technology to bring quality video games to any device.
Deal With Next Games
The Los Gatos, Calif.-based company has snapped up Finnish mobile maker Next Games credited with making the popular sci fi drama Stranger Things series into a mobile game for the platform.
The deal worth €65 million ($72.1 million) is expected to close in the second quarter of 2022, the two companies said.
Netflix Chief Financial Officer Spencer Neumann also told investors in the latest earnings call that mergers and acquisitions is a tactic to "accelerate" the company's strategy for new content and intellectual property across film, TV, and games.
Netflix had launched five mobile game titles for Android devices in November including titles like "Stranger Things: 1984", "Stranger Things 3: The Game", "Shooting Hoops", "Card Blast" and "Teeter Up".
"Next Games has a seasoned management team, strong track record with mobile games based on entertainment franchises, and solid operational capabilities," said Michael Verdu, vice president of games at Netflix said in a statement.
"We are excited for Next Games to join Netflix as a core studio in a strategic region and key talent market, expanding our internal game studio capabilities. While we're just getting started in games, I am confident that together with Next Games we will be able to build a portfolio of world class games that will delight our members around the world."
In the past, Netflix bought video game creator Night School Studio in September and launched five mobile gaming titles in select European markets.
The company has said its games will be included as part of a Netflix membership with no ads and no in-app purchases.