Netflix plans to expand its business beyond TV shows and movies to video games, hiring former executives who worked at EA and Facebook to lead the effort, Bloomberg reported.
Mike Verdu said he joined Netflix as vice president of game development and worked under Greg Peters, chief operating officer. While working as a vice president on Facebook in the past, he led the development of incorporating games and other contents into Oculus virtual reality headsets.
According to sources familiar with the issue, Netflix plans to provide video games on streaming platforms within next year.
These games are a new genre of programs similar to those offered by Netflix as documentaries and comedy specials. It will be provided within the current rate.
The source, who spoke on condition of anonymity, said, “Netflix has no plans to charge additional fees for this content at this time.”
Netflix has been seeking ways to sustain growth in saturated markets such as the United States. This includes developing children’s programs, opening online stores, and collaborating with filmmaker Steven Spielberg.
Netflix is far ahead of its streaming competitors such as Disney+ and HBO Max, but in the most recent quarter, new subscribers fell below expectations.
Thus, making inroads into games is one of Netflix’s boldest moves. Verdu was an executive in charge of developing popular mobile games such as Sims, Plants vs Zombies and Star Wars franchises at EA before Facebook. He also served as Chief Creative Officer (CCC) of Zinga from 2009 to 2012.
Netflix plans to form a game team in the coming months, according to sources familiar with the issue. It has already started advertising its position related to game development on its homepage.
Video games are another way Netflix can attract new customers. It is also a service that is not currently provided by competitors. Walt Disney, AT&T’s Warner Media, and Amazon all offer live sports content, but there are no games.
Shares of GameStop, a video game retailer, plunged 10 percent in trading after opening, shocked by news of Netflix’s entry into the game.
Netflix has also made inroads into interactive programs such as Choice Your Adventure Style Show.
In the same format, “Carmen San Diego” and “Black Mirror” programs were produced. However, this is not enough to be seen as a true video game.
Netflix co-CEOs Reed Hastings and Ted Sarandos recently showed interest in game development in a phone call with analysts. It also pointed to Fortnite, the Battle Royale shooting game, as a competitor.
Shortly after the news report, Netflix shares rose 3.3 percent to $566 in post-opening trading.
