The budding history between Netflix and video games reached a new milestone on March 2. The platform has announcement the acquisition of the Finnish studio Next Games for 65 million euros. Next Games is known for its free-to-play mobile games, some of which are already linked to popular franchises on Netflix like Stranger Things or The Walking Dead.
The studio’s board of directors has already validated its takeover
Next Games was founded in 2013 by Finnish video game figure Teemu Huuhtanen. He notably worked in the companies behind Angry Birds and Habbo Hotel. Its turnover reached 27.2 million euros in 2020, 95% of which came from in-app purchases.
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For Mike Verdu, vice president of video games at Netflix, “ Next Games has a seasoned management team, strong track record in entertainment franchise based mobile games and strong operational capabilities “.
The Next Games founder and current CEO displayed his enthusiasm. He has valued that in ” joining forces with the world’s largest streaming service, Netflix, we have the opportunity to logically and excitingly continue our strategy of creating interactive experiences “.
The board of directors has validated the operation and recommends that Next Games shareholders follow it. If all goes well, it should be finalized in the second quarter of 2022, at the latest in June.
Netflix’s strategy is clear: video games
As noticed TechCrunch, by relaying data from its CrunchBase platform, in its history, Netflix has made a limited number of acquisitions so far despite its success: 5 in total. All of them are directly or indirectly related to the world of video games.
Faced with increasingly fierce competition in the world of streaming, especially from Disney, Netflix has decided to bet on video games. The platform hired Mike Verdu from Facebook to build its gaming branch from scratch.
Since November 2021, the first mobile games for Netflix subscribers have been available on iOS and Android, without advertising or in-app purchases. For TechCrunch, these games, thanks to the platform’s star licenses, are above all a means of extending Netflix franchises to different media, such as Stranger Things. Another example is the sale of program merchandise through Walmart.
This strategic orientation of Netflix is mainly in line with a trend in the booming video game market. The video game giants, Microsoft and Sony, marked the news with record acquisitions, one Activision Blizzard, the other Bungie. To degrees, of course, much less Netflix is participating in it with the purchase of the Night Shool studio in September 2021 and today Next Games.
A step-by-step arrival in an extremely competitive sector
The Xbox Games Pass is seen as an attempt by Microsoft to move towards the Netflix of video games, with a monthly subscription to access the catalog of the world’s third largest video game company. The model seems to be on the way to establishing itself in the video game industry.
It seems logical that Netflix, which has participated in democratizing this model, in search of diversification, decides to extend the cultural offer of its platform. The company is still a long way from a Sony or a Microsoft, but CNBC notes that both companies shaped their success in part through the purchase of small studios. This is also true for the sector leader Tencent, which, like Netflix, has favored mobile games.
As Mike Verdu, convinced of the future success of Netflix in this new entertainment sector, declares, “ it takes time to develop games that people love “. With Night Shool and Next Games, Netflix hopes to make the task easier.