The games, initially designed for smartphones and tablets, will be added at no additional cost to existing customers.
Proof that video games are becoming essential for any self-respecting platform, Netflix is also embarking on this vein, as a means of diversifying in the face of an early saturation of its market.
“As we’ve been investing in original programs for almost ten years, we think it’s time to better understand what our members enjoy in games,” the group said Tuesday in its quarterly earnings release.
The games, initially designed for smartphones and tablets, will be added at no additional cost to existing customers. It will be “a new category for us, like our expansion into films, animation and TV shows,” Netflix detailed.
The video-on-demand veteran is approaching 210 million paying subscribers. In the second quarter, it made almost double its net profit from last year of $ 1.35 billion, but that result fell short of expectations from a market worried that the platform would slowly lose its lead. over its many competitors.
The group was pleased to be “ahead of its forecasts” in terms of subscriber growth, and recalled that the craze for video on demand during the pandemic was preventing normal comparisons. But that does not change the conclusions of analysts: “Netflix seems to have reached the saturation of its market in the United States”, asserts Eric Haggstrom of eMarketer.
He acknowledges that the company has been “able to raise prices and increase revenues despite increased competition from cheaper services”, but notes that “Netflix has lost significant market share to Disney.” From April to June, the platform garnered $ 7.3 billion in revenue, up 19%.
In 2020, Netflix benefited greatly from the lockdowns linked to the health crisis and its status as a well-established streaming pioneer. But the competition has become fierce with old ones like Amazon Prime Video, and especially the recent Disney +, Apple TV +, HBO Max or even Peacock from NBCUniversal. Not to mention all the entertainment platforms that monopolize the attention of consumers, from video games to social networks.
The Californian company ensures that its prospects for gain remain immense, because streaming still only represents 27% of the time spent in front of television screens in the United States (including 7% for Netflix), against 63% for the so-called TV channels. “Linear,” according to a study by Nielsen cited by the group.
“Knowing that we are less mature in other countries and that this does not include mobile screens (where our share of user engagement is even lower), we have confidence in our growth reserves,” explains Netflix.
But in a business model based on subscriptions, not advertising, more attention doesn’t necessarily translate into better revenue. Netflix has therefore undertaken to diversify, with an online store of merchandise and the recruitment this month of a manager in charge of video games.
“It’s a good tactic to keep and even attract new paying subscribers at the margin,” reacted on Twitter investor Gene Munsters of Loup Ventures. “In all there are about 2 billion monthly gamers in the world.” “New sources of income such as derivatives and potential future experiments such as theatrical releases, podcasts and video games could bring growth,” says Eric Haggstrom. “But success in these areas is far from assured.”
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