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Netflix to include mobile games for subscribers

Netflix has confirmed that it will include video games as part of subscription packages at no extra cost.

In a letter to investors, it said it was in the early stages of expanding into games and those for mobile would be added to the platform first.

“The time is right to learn more about how our members value games,” it said on Tuesday.

But Netflix shares dipped in after-hours trading after it missed a target on subscriptions.

The California-based company said it expects to sign up 3.5 million new customers in the three months to the end of September – less than the 5.86 million analysts had estimated.

“Covid has created some lumpiness in our membership growth (higher growth in 2020, slower growth this year), which is working its way through,” it said in its latest financial update.

“We continue to focus on improving our service for our members and bringing them the best stories from around the world.”

It now counts more than 209 million paid-up members in total, having seen a surge in sign-ups when consumers were spending more time at home during coronavirus-related lockdowns.

But the pandemic has proven a double-edged sword for Netflix, because it disrupted the production of some big titles.

“Covid and its variants make predicting the future hard, but with productions largely running smoothly so far, we’re optimistic,” it said, pointing to new seasons of the series “Sex Education” and “Never Have I Ever”.

Despite the slowdown on-set, in the three months to the end of June the firm’s revenues totalled $7.3bn – about 19% higher than a year before.

Profits dipped to $1.35bn, down from $1.7bn the previous quarter, citing additional investment in improving its apps and non-English language content.

Netflix said it is continuing to put more money into production and that it was keen to “increase our share of screen time in the US and around the world”.

Given that the firm faces increasingly stiff competition from new streaming services entering the market, such as Disney+ or Amazon Prime, gaming could provide Netflix with a unique offer, building on efforts such as an interactive episode of Black Mirror called “Bandersnatch”.

Independent telecoms analyst Paolo Pescatore said that this could prove costly: “The company will have to dedicate significant resources including time and investment with no guaranteed success.

“For sure this is a long-term play as Netflix needs to strongly think about retention and engagement.”

He also cautioned that competition in the gaming industry is even tougher and it could be years before the streaming giant could establish itself in that market.

Netflix has recently announced a number of moves in order to aid its transition, such as hiring Mike Verdu who used to work for gaming company Electronic Arts (EA) as its vice president of game development, as well as reportedly expanding its deal with the Bridgerton creator Shonda Rhimes to include gaming.

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