Strategic Netflix-Gaming Partnership Makes Stock an Attractive Investment Opportunity
Streaming Giant Netflix's Leap into Gaming: A Long-Term Stock Boosting Move
Netflix, like a phoenix rising from the ashes, has faced some turbulent times in 2022. Taking a nosedive of around 50% since the start of the year, the tech colossus incredibly managed to outperform expectations in the third quarter by adding 2.41 million subscribers. The projected increase for the fourth quarter has investors grinning, with Netflix anticipating a further 4.5 million new subscribers. But will this be enough to reclaim its previous glory? Well, hold onto your hats, because Netflix might just have an ace up its sleeve: diving headfirst into the lucrative gaming industry.
While everyone's hype is centered on Netflix's plans for ad-supported streaming and curbing password sharing, the streaming juggernaut is making some splashes in a market that warrants way more attention.
Netflix, ever the secretive shark, acquired Spry Fox without disclosing the purchase price. Their more substantial investment, Next Games, set them back around 65 million euros. Currently, Netflix owns six game development studios and has 55 titles in production. Part of this expansion was acquired, while the other half was born in-house. But don't think this is the end of the game for the streaming giant. "We're thrilled to work with a studio whose core values - an unwavering dedication to workforce and player joy - mirror our own," said Netflix in a blog post. "Our gaming adventure has barely begun."
With Netflix still dipping its toes, the mobile gaming market is projected to grow by over 12% yearly until 2030. This year alone, it has generated a staggering $150 billion in global revenue – double the potential of the video streaming market.
Just as "Netflix and Chill" has become synonymous with video streaming, the streaming giant wants to become the face of gaming in the future. By integrating games into its platform with millions of users, Netflix has the potential to become a popular choice for gamers. Users are already accustomed to the Netflix interface and have their payment details set up, making the transition seamless. This also provides Netflix a competitive edge over other streaming competitors and diversifies its business. "Much like our series, films, and specials, we aim to build games for every level of player and every type of gamer, whether they're beginners or seasoned pros," Netflix declared when it announced its gaming strategy in November 2021.
The global economy remains a roller coaster for tech stocks, and it may take a few years for Netflix's gaming ambitions to fully bear fruit. But if Netflix can build a larger player base and establish itself in the gaming industry, the current low stock price might be a golden opportunity for long-term investors.
[1] "Netflix Earnings: Q3 2022 Results," CNBC, October 19, 2022, https://www.cnbc.com/2022/10/19/netflix-earnings-q3-2022.html[2] "Netflix Q3 2022 Earnings Call Transcript," Seeking Alpha, October 19, 2022, https://seekingalpha.com/ symbol/NFLX/earnings/4457310-netflix-q3-2022-earnings-call-transcript[3] "Netflix Q3 2022 Earnings Release," Netflix Investor Relations, October 19, 2022, https:// investor.netflix.com/static-files/d9baa851-69de-4893-8b1b-87fbf3a0c861[4] "Netflix Aims for $1 Trillion Valuation," Business Insider India, September 22, 2022, https://www.businessinsider.in/[5] "Netflix Stock Price Target: Can the Rebound Last?" Market Realist, November 17, 2022, https://www.marketrealist.com/
[1] With Netflix investing significantly in the gaming industry in 2022, the streaming giant aims to become synonymous with gaming, just as "Netflix and Chill" is synonymous with video streaming.
[2] The integration of games into Netflix's platform has the potential to increase its user base and diversify its business, similar to the increase in Netflix subscribers seen in the third quarter of 2022.
[3] As the global economy remains unpredictable for tech stocks, the current low stock price for Netflix could provide a golden opportunity for long-term investors, much like the potential increase in revenue from the gaming market.
[4] With the mobile gaming market projected to grow by over 12% yearly until 2030, generating a staggering $150 billion in global revenue in 2022 alone, Netflix's foray into the gaming industry could lead to a further increase in profits and artificial-intelligence-driven gadgets and technology.
