Netflix co-CEO Greg Peters offered an update on the company’s gaming initiative during its first quarter earnings call on Tuesday — and even offered some recommendations on what to play.
“We’ve got 55 games out to date and we’ve got 40 more in the queue for this year,” Peters said in an interview with Bank of America analyst Jessica Reif, in a digression from a discussion that centered on profit margins and password-sharing features. “There’s very exciting games. If you want to try a few out, I’d recommend ‘Terra Nil.’ That’s a reverse city builders sort of twist on that genre. You’ve got ‘Mighty Quest’ launching today. Our first new game from an internal studio, which is ‘Oxenfree II,’ is coming later this year.”
Peters’ enthusiasm and his detailed command of available titles reflect the company’s growing investment in games, which it offers to subscribers through its mobile apps. Netflix has acquired three gaming studios: “Oxenfree” creator Night School Studio in September 2021 and “Dungeon Boss” creator Boss Fight Entertainment and Helsinki, Finland-based Next Games in March 2022. The company revealed plans in September to establish its own internal games studio in Helsinki.
Peters’ predecessor, co-founder Reed Hastings, often talked about video games as a competitor for Netflix streaming customers’ time. Now the company is increasingly serious about competing in the field itself.
“The fundamental goal here, obviously, is to give our members a new entertainment modality and more ways to enjoy incredible universes and deepen their fandom,” Peters said. The goal, he said, was to deliver “incredible stories that people are talking about, games that are must-play games … that motivate people to sign up.”
The update comes as Netflix is seeking to speed up revenue growth in 2023 through efforts such as its ad-supported streaming tier and a password-sharing crackdown, which will roll out in the U.S. during the second quarter of 2023.
Looking ahead, Netflix is forecasting total revenue of $8.2 billion in the second quarter, a 3% year over year increase, and operating income of $1.6 billion, roughly flat year over year. It also anticipates revenue growth to accelerate over the course of the second half of 2023 as it continues to improve the service, more broadly roll out paid sharing and grow its advertising business.
Peters emphasized that there are currently no plans to monetize gaming through advertising or licensing IP to game developers.
“We think that very consistent with the work we’ve done in other parts of the business, the best thing for us to do is really focus on the core initiative, which for us right now is ‘How do we bring games and games based on our IP to our members, to fans of that IP directly?’” he said. “Also, we want to have a differentiated gaming experience and part of that is giving game creators the ability to think about building games sheerly from the perspective of player enjoyment and not having to worry about other forms of monetization, whether it be ads or in-game payment.”
