Netflix is ​​betting on video games amid losses

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Netflix has invested heavily in games. After announcing its intentions to explore the video game space last July, the streaming service hired several executives for significant positions on its game vertical over the past few months while releasing mobile games such as “Stranger Things: 1984.”

Netflix is ​​looking at video game content options from all directions, a source familiar with the company’s thinking told The Washington Post. The platform’s latest move is to turn the show-to-video-game pipeline upside down and announce that it will take the popular table card game “Exploding Kittens” and produce both a TV show and a mobile game.

Video games have become more prominent on the streaming service, whether it’s with a TV show that has become a game, like “Stranger Things”, or a video game that has become a TV show like the “Arcane” animation series based on ” League Of Legends.” Netflix has also dived into third-party game development and original games, though the timeline for releasing its own games is much further out.

Netflix’s latest gaming news comes just as the company’s stock lost more than a third of its value on Wednesday, a day after reporting its first quarterly loss of subscribers in a decade. The service said it lost 700,000 subscribers after withdrawing from Russia following the invasion of Ukraine.

“[Netflix’s] Wild entry into gaming was an indication that it needs to look beyond video streaming to keep its business buzzing, ”said Joost van Dreunen, who teaches gaming at the NYU Stern School of Business. “The announcement of a cross-category launch of Exploding Kittens shows Netflix’s willingness to try new things, but it’s not the type of release that’s going to save the farm.”

As Netflix blames password sharing and high competition from platforms like Disney Plus and Hulu, it sees gaming as the next big option. While the company is focused on creating more hit shows like “Squid Game” and “Bridgerton,” it is also buying game studios with a future-oriented plan.

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“We’ve made these small acquisitions to build know-how and the creative cuts to be able to make some really big gains,” Netflix CEO Reed Hastings said during Tuesday’s earnings call.

So far, Netflix has purchased three game studios. The acquisitions of Texas-based mobile company Boss Fight Entertainment and Finnish developer Next Games were announced in March. In September last year, the streaming service bought Night School Studio, which made the supernatural adventure game “Oxenfree”. Next game released “Stranger Things: Puzzle Tales” last year, ahead of their acquisition news.

The acquisitions come at a time when the gaming industry is buzzing with merger deals, such as Microsoft’s acquisition of Activision Blizzard for $ 68.7 billion or Sony’s buying Bungie for $ 3.6 billion. Analysts predict further consolidation in the gaming area as gaming publishers try to remain competitive.

Within this ecosystem, Netflix seeks to build a gaming business that can create synergies between what people watch and what they play. It includes customizing video games like “Castlevania”, “League of Legends”, “Dota”, “Cuphead”, “The Witcher” and more for shows, while also customizing shows for games and naming third-party titles. For example, Netflix labeled a “League of Legends” spinoff game made by a third-party developer, Choice Provisions, as a Netflix mobile game.

Netflix’s plan is to stick with mobile gaming for the time being as it begins to explore the gaming world, according to the source, who is familiar with its plans.

The company will offer nearly 50 mobile games by the end of the year. Netflix mobile games can be found in the Apple App Store for iOS users and the Google Play Store for Android users, though only Netflix subscribers can access the games.

The Netflix app is currently announcing its games along with TV shows and movies. To download all the games more easily, users can search for games in the app, and results for games like “Stranger Things: 1984” are displayed with a prompt to download them.

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Part of Netflix’s gaming strategy has included making key hires. Leanne Loombe, head of external gaming at Netflix, joined in November last year after working at Riot Games as a director and executive producer overseeing third-party game publishing. Mike Verdu, Netflix’s vice president of gaming, has previously headed Facebook’s virtual reality division and was director of Electronic Arts. Amir Rahimi was President of Gaming at the mobile gaming company Scopely and is now Vice President of Gaming Studies and works for Verdu.

The game division’s next big project is the adaptations of Exploding Kittens. The mobile game lands first and it is expected to be released next month.

Exploding Kitten’s CEO and co-founder Elan Lee said the mobile game adapts the Russian roulette formula from the original card game (i.e. draw a card, hope it’s not an exploding kitten). While developing the video game, Lee said he asked the question, “What would we like the physical world to be capable of that we suddenly have access to in this digital space?”

New additions to the mobile game include features like an hourglass timer or a card that lets you draw from the top and bottom of a card game without showing anyone else which card you chose, Lee said, adding that he drew from his experience of working on the Xbox as chief design officer until he left in 2014.

The Exploding Kittens TV series is an animated adult comedy produced by Mike Judge and Greg Daniels. It comes in 2023 and is about two cats coming to Earth as embodiments of God and the Devil.

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“There’s an early glimpse of where we’re trying to go with this announcement,” Netflix COO and Chief Product Officer Gregory Peters said, referring to the Exploding Kittens news in Tuesday’s call.

Peters called the new game “an initial step on a long roadmap, we have to think about how we make the film and the series’ side, and then enhance the interactive gaming experience, as well as the interaction between them, the value that our members get from. both.”

Lee, CEO and co-founder of Exploding Kittens, is convinced that the card-to-TV show pipeline gives their business a significant advantage when it comes to converting TV show viewers into Exploding Kittens fans.

“People watch the show, hopefully they fall in love with it because it’s really good, and then they go to Target or anywhere, and they want to see, ‘Oh, those exploding kittens card games, I hope it’s good. ‘ ” he said. “Well, the answer is, it’s really good because it came first, which is very unique to us. It’s going well in a way that a game like ‘Stranger Things’ can not say for sure because our path is exactly the opposite. to them.”

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