Netflix has confirmed that it is moving towards video games because it has reported a marked slowdown in subscriber growth.
The streaming giant – known for shows like Bridgerton and The Crown – said the games would be available to paying customers at no additional cost with an initial focus on games for mobile devices.
Netflix unveiled the much-anticipated move by announcing the addition of just 1.5 million subscribers in the April-June quarter, the slowest growth in eight years, though ahead of its own forecast of 1 million.
During the same period a year ago, it added more than 10 million customers and for the whole of 2020 signed $ 37million as the pandemic spurred increased demand from consumers spending much more time at home.
The meteoric expansion was still expected to slow and in the last quarter the number of subscribers in North America and Canada even recorded a rare drop of 430,000.
Netflix said the pandemic resulted in an “unusual irregularity” in its growth and forecast a better third quarter, with 3.5 million subscribers expected to be added – although that number is lower than Wall Street expectations.
Although growth has slowed, the company now has 209 million subscribers and reported revenues of $ 7.3 billion (£ 5.4 billion) for the last quarter, or $ 1.2 billion ( £ 0.88bn) more than a year ago, while profits soared 88% to $ 1.35bn. (£ 1 billion).
Netflix said its move to gaming represented a new category of content “similar to our expansion into original films, animation and unscripted television.”
Executives said it would be “relatively small” to begin with, with games tied to Netflix’s successes.
COO Greg Peters said: “We know the fans of these stories want to go further. They want to engage more.”
Netflix has already tried video games with a few titles related to series like Stranger Things and The Dark Crystal: Age Of Resistance.
Co-Managing Director Reed Hastings said games and other businesses like podcasts and merchandise sales would be “supporting elements” to help attract and retain customers in its core video streaming business.
Sophie Lund-Yates, Senior Equity Analyst at Hargreaves Lansdown, said: “A foray into the world of video games might sound like a good idea, but it’s an important next step in Netflix’s efforts to keep its eyes on its customers. screens.
“Netflix engines need grease.
“People rushed to sign up during the pandemic, but now things are back to normal, that extra source of power is gone, and means the group has added its lowest number of new subscribers over the past year. last trimestre.
“A very high proportion of young people already have a Netflix subscription, so getting them addicted to games, taking advantage of its original content is a potential stroke of genius.”