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Netflix Execs Talk Gaming; Tease Internal Game Development Studio During Q3 Earnings Call

Jeff Kotuby

Netflix’s Q3 investor call was released today and, outside of Squid Game, one of the hot-button issues has to be Netflix’s foray into gaming. Luckily, the company’s leadership discussed gaming in the broad sense and even hinted at what their future plans could be when it comes to gaming.

When asked about the mobile game tests in Poland, Italy, and Spain, chief product officer Greg Peters said that it’s so far so good for the games, but that it’s still very early in the process. “We’re incredibly early in this process, and mostly what we’ve done to date is about essentially making sure that all of our systems are working as we expect. It’s really about proving to ourselves that we can do the delivery in a way that we want. And we’re building all the systems around it the same things that have made our service very powerful for recommending movies and TV shows and connecting great content creators into this audience. That’s the capability that we need to build on the game side as well now. And that’s going well, [we’re on] a positive trajectory. But…we’re still many months, and really, frankly, years, into learning incrementally about all those details.”

Peters again reiterated a point that will make Netflix incredibly dangerous in the mobile gaming sphere — its ability to offer games without predatory ads or microtransactions, two aspects that present a difficult challenge to other companies. “we’re excited about the idea that by taking away, what we see is distractions from the core enjoyment experience associated with other models, like advertisements, or in-app monetization, per title costs…that we can really give our members, you know, a much, you know, easier direct enjoyment experience with games, just like we have with TV shows and movies.

And there’s a great flip side to that coin as well, which is that our creators can really put all of their energy, everything they’re excited about into making that maximal enjoyment experience for the users, the players of those games without having to worry about those other things that down they have to and other models in terms of monetization.”

Could Netflix Invest in an Internal Game Development Company?

While Netflix execs admit the company won’t go on a spending spree to do it, they have teased the concept of an internal game development studio to further bolster their upcoming gaming division.

During his company’s Q3 earnings interview, Netflix Peters teased the idea that his company might be interested in creating an internal games development studio in addition to partner-produced and licensed development projects, following the company’s three-pronged approach to its original video content. “[An] internal game development capability, which allows us to really push the edges on interactive storytelling and [ask the question] “How do we bridge that more tightly with linear storytelling?” on the linear side. We want to build that up, and one way we can accelerate that is, when we find the right opportunity, through acquisition, similar to what we did with Night School.”

Last month, Netflix acquired Night School Studios, a small studio started by Sean Krankel and Adam Hines in 2014, Night School Studio is best known for their critically acclaimed debut game, OXENFREE. Now, the team’s future games will fall under the Netflix banner. Outside of interactive experiences like You vs. Wild and Escape the Undertaker, Netflix stealth-released a VR game based on its Eden universe earlier this year.

Peters reiterated that future acquisitions would be “opportunistic” and said, “don’t expect us to go on a buying spree,” which was backed by CFO Spencer Neumann who said, “Based on our track record, you know we’re fairly selective…but when an opportunity presents itself where we’re aligned with the company, I think that’s an opportunity we’ll take.”

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