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Netflix (NFLX) Acquires Night School Studio, Launches Games
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Netflix's (NFLX - Free Report) expansion into mobile gaming has kicked off with the launch of five titles on its new Game tab and its first gaming studio buyout. It has acquired Night School Studio — the team behind the supernatural mystery adventure, Oxenfree.
The studio's games including Afterparty, which are available on PS, Xbox, Nintendo Switch and PC, will be the first non-mobile titles in the streaming giant's newly created video game portfolio. Night School is currently working on Oxenfree 2: Lost Signals, which is expected to release in early 2022.
Netflix’s first mobile games are currently exclusively available to Netflix subscribers in Europe, and can only be played on Android smartphones and devices. Netflix members in Italy and Spain can play casual mobile games Shooting Hoops, Teeter Up and Card Blast, along with Stranger Things: 1984, and Stranger Things 3: The Game.
The games – Stranger Things 3: The Game and Stranger Things: 1984 – were previously paid releases on mobile in Poland but now Polish Netflix subscribers can download the Android versions for free.
According to a report from Reuters, each of the games from Netflix will be included as part of users’ Netflix membership and will have no ads and no in-app purchases, much like the TV shows and movies on the streaming platform.
With popular gaming-based original TV shows under its belt, including The Witcher, Castlevania, and most recent Resident Evil: Infinite Darkness, Netflix is sure to expand its eventual catalog of titles based on the existing Netflix properties and make it available in more countries soon.
Year to Date Performance
Image Source: Zacks Investment Research
Will Video Game Expansion Aid Prospects?
The recent studio acquisition and mobile game launches are just the latest parts of Netflix’s ongoing push into video games. In July, the streaming giant appointed former EA and Facebook gaming executive Mike Verdu who has a track record of working on Oculus and EA game development including Plants vs Zombies to lead the project.
The appointment of Mike Verdu is expected to prioritize Netflix’s video game development endeavors, thereby opening up a new source of revenues. This could be the additional content driver that Netflix needs to propel its decelerating global subscription growth back into overdrive.
However, Netflix already faces major competition from Xbox Cloud Gaming, along with Alphabet’s (GOOGL - Free Report) Google Stadia and Amazon’s (AMZN - Free Report) Luna. As these services already offer a great selection of games, especially on Xbox Game Pass, Netflix will need to offer exclusive content if it aims to keep mobile gamers on its platform.
Moreover, other streaming service providers, particularly Disney’s (DIS - Free Report) Disney+ and HBO Max, are catching up fast with this Zacks Rank #4 (Sell) company. Stiff competition has been an overhang on its shares. Year to date, shares of Netflix are up 8%, underperforming the Zacks Broadcast Radio and Television industry’s rise of 13.4%.
Netflix’s plan to expand beyond streaming was evident from its e-commerce initiative. In June, the company launched its first owned-and-operated online retail outlet, Netflix.shop, to sell products directly to consumers.
The streaming giant’s focus on developing regional content and expansion into different genres, including kids’ programming, is laudable. The addition of celebrity content creators like Steven Spielberg and Shonda Rhimes has been a game changer.
Netflix is not new to video games or interactive video formats on its service. In 2017, the company launched an interactive video format that allowed users to choose story options for its original productions Black Mirror: Bandersnatch and You vs. Wild.
Video games have also been created based on its popular show La casa de Papel (Money Heist). Netflix expects third-quarter 2021 revenues to be $7.47 billion, suggesting growth of 16.2% year over year. The Zacks Consensus Estimate for revenues stands at $7.48 billion.
Image: Bigstock
Netflix (NFLX) Acquires Night School Studio, Launches Games
Netflix's (NFLX - Free Report) expansion into mobile gaming has kicked off with the launch of five titles on its new Game tab and its first gaming studio buyout. It has acquired Night School Studio — the team behind the supernatural mystery adventure, Oxenfree.
The studio's games including Afterparty, which are available on PS, Xbox, Nintendo Switch and PC, will be the first non-mobile titles in the streaming giant's newly created video game portfolio. Night School is currently working on Oxenfree 2: Lost Signals, which is expected to release in early 2022.
Netflix’s first mobile games are currently exclusively available to Netflix subscribers in Europe, and can only be played on Android smartphones and devices. Netflix members in Italy and Spain can play casual mobile games Shooting Hoops, Teeter Up and Card Blast, along with Stranger Things: 1984, and Stranger Things 3: The Game.
The games – Stranger Things 3: The Game and Stranger Things: 1984 – were previously paid releases on mobile in Poland but now Polish Netflix subscribers can download the Android versions for free.
According to a report from Reuters, each of the games from Netflix will be included as part of users’ Netflix membership and will have no ads and no in-app purchases, much like the TV shows and movies on the streaming platform.
With popular gaming-based original TV shows under its belt, including The Witcher, Castlevania, and most recent Resident Evil: Infinite Darkness, Netflix is sure to expand its eventual catalog of titles based on the existing Netflix properties and make it available in more countries soon.
Year to Date Performance
Will Video Game Expansion Aid Prospects?
The recent studio acquisition and mobile game launches are just the latest parts of Netflix’s ongoing push into video games. In July, the streaming giant appointed former EA and Facebook gaming executive Mike Verdu who has a track record of working on Oculus and EA game development including Plants vs Zombies to lead the project.
The appointment of Mike Verdu is expected to prioritize Netflix’s video game development endeavors, thereby opening up a new source of revenues. This could be the additional content driver that Netflix needs to propel its decelerating global subscription growth back into overdrive.
However, Netflix already faces major competition from Xbox Cloud Gaming, along with Alphabet’s (GOOGL - Free Report) Google Stadia and Amazon’s (AMZN - Free Report) Luna. As these services already offer a great selection of games, especially on Xbox Game Pass, Netflix will need to offer exclusive content if it aims to keep mobile gamers on its platform.
Moreover, other streaming service providers, particularly Disney’s (DIS - Free Report) Disney+ and HBO Max, are catching up fast with this Zacks Rank #4 (Sell) company. Stiff competition has been an overhang on its shares. Year to date, shares of Netflix are up 8%, underperforming the Zacks Broadcast Radio and Television industry’s rise of 13.4%.
Netflix’s plan to expand beyond streaming was evident from its e-commerce initiative. In June, the company launched its first owned-and-operated online retail outlet, Netflix.shop, to sell products directly to consumers.
The streaming giant’s focus on developing regional content and expansion into different genres, including kids’ programming, is laudable. The addition of celebrity content creators like Steven Spielberg and Shonda Rhimes has been a game changer.
Netflix is not new to video games or interactive video formats on its service. In 2017, the company launched an interactive video format that allowed users to choose story options for its original productions Black Mirror: Bandersnatch and You vs. Wild.
Video games have also been created based on its popular show La casa de Papel (Money Heist). Netflix expects third-quarter 2021 revenues to be $7.47 billion, suggesting growth of 16.2% year over year. The Zacks Consensus Estimate for revenues stands at $7.48 billion.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.