Netflix is planning to add video games to its streaming services as the company plans to counter a slowdown in its subscriber numbers.
The company announced that it will offer video games in its existing subscription plans at no extra cost. It did not give any indication as to when they will launch the service.
Netflix CEO Reed Hastings said: “The reason we’re doing them is to help the subscription service grow and be more important in people’s lives.”
The lockdown and the pandemic-related issues made 2020 one of the biggest years for Netflix. It got 16 million new customers in just three months, but as expected, it is struggling to keep pace in 2021.
Netflix added 1.5 million subscribers during the April-June period and had a net gain of 5.5 million subscribers through the first six months of this year – its weakest first-half performance since 2013.
Netflix has forecast it would add 3.5 million subscribers during the July-September period, which fell well below analyst estimates for a gain of 5.6 million subscribers in the third quarter.
While the subscription numbers are slowing down, Netflix says it was confident of getting to a tally of 54 million over the last two years. Its revenue was up 19% year-over-year at $7.3 billion for the quarter. The company earned $1.35 billion, or $2.97 per share, nearly doubling from the same time last year.
“We view gaming as another new content category for us, similar to our expansion into original films, animation and unscripted TV,” the company said in a letter to shareholders.
“We’re excited as ever about our movies and TV series offering and we expect a long runway of increasing investment and growth across all of our existing content categories, but since we are nearly a decade into our push into original programming, we think the time is right to learn more about how our members value games.”
The move was widely anticipated after Netflix recently hired Mike Verdu, who had earlier worked with Oculus and EA, as its vice president of game development. Verdu was the VP of augmented and virtual reality games and content at Facebook. From 2017 to 2018, he was also the head of EA Mobile and oversaw the studios that worked on Star Wars: Galaxy of Heroes, SimCity BuildIt, Plants vs. Zombies and Sims Free Play, among others.
Greg Peters, Netflix’s chief product officer, said the company will initially focus on mobile games before eventually expanding to consoles and TV sets as well. The games initially will be tied to Netflix’s most popular programming, but standalone titles may be added later.
Microsoft also announced recently that it intended to start a streaming service for games.
