Netflix (NASDAQ:
NFLX) is planning a foray into video games, hiring a former Electronic Arts (
EA) and Facebook (
FB) executive to lead the effort. Mike Verdu will join the company as vice president of game development as the streaming arena gets increasingly crowded with rivals like Disney+ (
DIS) and HBO Max (
T). Verdu also served as chief creative officer for Zynga (
ZNGA) between 2009 and 2012, and has been involved with titles like
The Sims,
Plants vs. Zombies and the
Star Wars franchises.
Not a totally new push: At the E3 gaming conference in 2019, Netflix revealed it would release a console and PC title based on
Stranger Things, and later unveiled a game based on
Dark Tactics. The same year, it pointed to
Fortnite as its competition in a letter to shareholders. The company has also produced anime adaptations of popular gaming franchises, including
Dota and
Castlevania.
Netflix hopes to offer video games on its streaming platform within the next year and has started advertising for developer-related positions on its website. Gaming would appear as a new programming genre (like documentaries and stand-up specials), though the company doesn't currently have plans to charge for the extra content. The latest news dinged shares of turnaround hopeful GameStop (NYSE:
GME), which
fell 7% on Wednesday, while Netflix headed higher, finishing the day
up 1.4% and rising further in AH trading.
Analyst commentary: "This is a natural extension of Netflix's content strategy, allowing it to mine intellectual property from popular shows like
Stranger Things. Though it may not generate much additional revenue, it will help deepen engagement and increase the service's appeal and pricing power," said Geetha Ranganathan, media analyst at Bloomberg Intelligence. "Don't expect this to be a turning point, but it shows that the company will explore new formats to increase time spent on the platform." (
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