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Netflix (NFLX) Launches New Heads Up Game, Expands Portfolio

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Netflix (NFLX - Free Report) continues to expand its gaming portfolio to boost viewer engagement. The streaming giant recently announced a new game – Netflix Heads Up – in collaboration with Ellen Digital Ventures.

Netflix Heads Up is a version of the popular mobile game, Heads Up. Netflix’s game offers 28 decks inspired by some of its popular series like Bridgerton, Stranger Things and Squid Game.

Netflix players will be able to play charades on their Android and iOS devices in up to 15 different languages including French, German, Italian, Japanese, Korean, Portuguese (Brazil) and Thai.

Netflix’s ongoing push into video games aims at improving viewers’ engagement with the platform amid rising competition in the streaming space. Netflix is facing tough competition from the likes of Disney (DIS - Free Report) , Apple (AAPL - Free Report) and Comcast (CMCSA - Free Report) .

Netflix is planning to release 30 new gaming titles on its platform by the end of this year. Netflix already has several shows based on games like The Witcher, Arcane (based on League of Legends), The Cuphead Show, DOTA: Dragon’s Blood and Castlevania.


Netflix has also been taking the route of acquisitions to expand its footprint in the gaming industry. Since launching the game initiative in November 2021, the company has acquired several studios including Finland’s Next Games, Texas-based developer Boss Fight Entertainment and Night School Studio, the developer best known for its supernatural mystery adventure Oxenfree.

Netflix Suffering from Stiff Competition

Netflix shares have declined 62.7% year to date compared with the Zacks Consumer Discretionary sector’s decline of 31%.

Netflix is suffering from stiff competition in the streaming space from the likes of Apple TV+, Amazon prime video, HBO Max, Disney+, Peacock, Paramount+ and TikTok. Moreover, the unfavorable impact of account sharing, a weak economy, multi-decade-high inflation and the Russia-Ukraine conflict is expected to hurt profitability.

In second-quarter 2022, Netflix lost 0.97 million paid subscribers globally, lower than its estimate of losing two million users. Netflix had added 1.54 million paid subscribers in the year-ago quarter. Netflix currently expects to gain one million paid subscribers in the third quarter of 2022.

Netflix, in June, confirmed that it is set to launch an ad-supported tier to reduce its losses and bring more users to the platform. The new tier will cost less than the current ad-free service and is part of a plan to make Netflix more attractive to cost-conscious consumers.

This Zacks Rank #3 (Hold) company is reportedly planning to remove ads during kids’ movies and TV series, keeping kids’ programming commercial-free when the company introduces its advertising-supported service. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Netflix is following the footsteps of its rival Disney-owned Disney+. In May, Disney+ announced that preschool children who use their profile to watch the ad-supported Disney+ tier will not see any advertising.

Disney is benefiting from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering.

Disney is also expanding into international markets. Disney+, as of Jul 2, 2022, had 152.1 million paid subscribers compared with 116 million as of Jul 3, 2021.

Comcast’s Peacock is well poised to grow, owing to its vast library of IP and new productions. Comcast is also planning to leverage Sky’s brand and scale to expand Peacock’s footprint internationally.

Apple’s streaming service, Apple TV+, is gaining recognition, with Ted Lasso Season 2 garnering 20 Emmy Award nominations and CODA winning three Academy Awards. This is expected to boost Apple TV+’s viewership.

Nevertheless, Netflix is expected to continue dominating the streaming space, courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content.

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