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Netflix has a Big Announcement!

Posted by Nick Sabean on Jul 15, 2021 3:00:50 PM

Netflix is a Gaming Company Now?



Netflix has just announced that the streaming service will be offering video games as a part of the content offering. Netflix has hired former Electronics Arts & Facebook executives to drive this new initiative to dominate the home screen.

Facebook's VP, Mike Verdu, led the development team to bring new games to the virtual reality platform, Oculus.  Verdu will be tasked to meet the goal of launching the video game initiative within the next year. 

There are no plans as of yet to charge extra for gaming content but you can bet at some point there will be an additional charge after a trial period. 

Unanswered Questions:

  • What will the monthly subscription fee increase be for games?  
  • What platforms will be supported?  Xbox, PlayStation, Mobile, Nintendo Switch, or Streaming TV Devices?
  • How will this affect my bandwidth or mobile data?
  • Will the games be licensed from other gaming companies or will Netflix get into the original content and game development?

Netflix and other streaming companies justify the large budgets for original content as new user acquisition and retention costs.  Will Netflix take the same approach with games?  

Premium streaming services have an average of 5.3% - 7% churn annually (how many subscribers cancel). Netflix is the clear industry leader with an outstanding 2.4% churn.  Needless to say, Netflix will be ok and have the financial resilience to take the gaming risk.

Netflix reported in May that they have added 4million new subscribers during the first quarter of 2021 with a total of 207.6 million subscribers, WOW!  

Basically, fewer people cancel Netflix, and the people that do are more likely to resubscribe. 

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Topics: Netflix, Gaming, Streaming services, StreamingTV

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