Netflix Confirms Entry into Video Video games as Its Progress Slows – Victoria Information

Netflix reported the worst slowdown in subscriber growth in eight years as people emerged from their pandemic cocoons. So it adds a new attraction to its marquee: video games.

On Tuesday, the video streaming giant announced that it would offer video games in its existing subscriptions at no additional cost. The long-awaited expansion was confirmed in connection with the publication of the latest earnings report.

This confirmation of the long-awaited gaming expansion came in the context of the release of Netflix’s latest earnings report. This financial breakdown showed that the video service added 1.5 million subscribers in the April-June period.

That’s slightly better than the modest increase management forecast after the service got off to a sluggish start over the winter months, but still well below the growth rate of recent years.

The 5.5 million subscribers Netflix gained in the first six months of this year represent its weakest performance in the first half since 2013 – a time when the company released even more original programming instead of old TV series and films to license.

Now Netflix is ​​taking another leap by offering video games. The Los Gatos, Calif. Company wired the move last week when it announced the hiring of a veteran video game manager, Mike Verdu, to explore potential opportunities in another area of ​​entertainment.

“The reason we’re doing it is to help the subscription service grow and become more important in people’s lives,” Reed Hastings, co-CEO of Netflix, told investors during a discussion Tuesday.

Greg Peters, Netflix’s chief product officer and executive who will oversee the expansion he calls multi-year expansion, said the company will focus on mobile games first before eventually expanding to consoles and televisions. The games will initially be tied to Netflix’s most popular programming, Peters said, but standalone titles can also be added to the mix. He even speculated that Netflix could potentially create a television series or movie inspired by one of its video games.

“There’s a big, big prize here and our job is to be really focused,” said Peters.

Despite this year’s slowdown in growth, Netflix remains by far the world’s largest streaming service in an increasingly competitive field that includes Walt Disney Co., HBO, Amazon, and Apple. Netflix ended June with 209 million subscribers worldwide.

The weight of Netflix has also brought steady gains. The company earned $ 1.35 billion, or $ 2.97 per share, nearly doubling from the same period last year. Sales rose by 19% year-on-year to EUR 47.3 billion.

But the lackluster numbers for the first half are a dramatic reversal from last year, when government-imposed bans around the world binge-watching people while cooped up at home. Netflix was already the world’s largest video streaming service when the pandemic began in March 2020 and gained 26 million subscribers in the first half of last year. .

While no one expected Netflix to maintain this breakneck pace, the decline in subscriber growth this year has been stronger than expected. Netflix stocks are down about 10% from their high of $ 593.29 six months ago. Stocks rose slightly in extended trading after Tuesday’s news broke.

Netflix management has attributed some of this year’s slowdown to pandemic-induced production delays that have left its video service less demonstrably hit. The Los Gatos, Calif., Expects this issue to be resolved in the second half of this year with the release of new seasons of popular series such as Sex Education and The Witcher, as well as films starring Leonardo DiCaprio and Meryl Streep.

Even so, Netflix disappointed investors with a forecast that expects only 3.5 million additional subscribers from July to September. According to FactSet Research, that was well below analysts’ estimates for an increase of 5.6 million subscribers in the third quarter.

The conservative outlook suggests that Netflix is ​​not expecting an immediate boost from its foray into a highly competitive video game field that is already being contested by far more experienced companies like Epic Games, Microsoft, and Electronic Arts.

But if the move to video games pays off, Netflix could eventually have more of a leverage on the price hike. The company has already incrementally increased subscription costs over the past several years and helped increase its average monthly revenue per subscriber to $ 14.54 in its largest market, which consists of the US and Canada. That’s a 16% increase from $ 12.52 a month two years ago.

Michael Liedtke, Associated Press

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