Netflix (NFLX) Bought Another Mobile Game Studio: Why?
Netflix (NFLX) has acquired its third video game studio in six months, expanding its catalog of mobile games for a service that is only a few months old.
On Thursday, Netflix announced it has purchased Boss Fight Entertainment, an Allen, Texas-based mobile game maker with studios in Austin and Seattle.
Financial details of the deal have not been released. As of 10:30 a.m. EDT (UTC-4), Netflix stock was down 1.25% at $371.03. Year-to-date, the stock is up/down 38%.
“Since we launched mobile games to our members around the world just four months ago, we have gradually expanded our catalog of games as we build our in-house creative development team,” said the Netflix vice president of Game Studios, Amir Rahimi. A declaration.
With the launch of its ad-free gaming service for smartphones and tablets late last year, Netflix is expanding beyond streaming video.
This raises the possibility that its games are tied to some Netflix entertainment content. When a show ends its season, you can continue playing the mobile game.
“Like our shows and movies, these games will all be included with your Netflix subscription, all without ads or in-app purchases,” Netflix VP of Game Development Mike Verdu said in an earlier press release.
“We believe Netflix sees mobile games as an additional vehicle to engage with their viewers and deliver more value for the same subscription price that continues to rise,” Morningstar analyst Neil Macker told Capital.com .
“From an investor perspective, there is no current revenue path for games. Netflix may add in-game purchases or on-the-road advertising, but management has provided no indication that the either way will happen in the near future.”
“We believe the video game business is a distraction from the core business and that Netflix will struggle to make a major impact in the space,” the Morningstar analyst said.
Netflix subscribers don’t pay extra for the gaming service.
Founded in 2013, key members of the Boss Fight management team have worked at Microsoft (MSFT) Ensemble Studios and Zynga (ZNGA), working on real-time strategy titles such as age of empires and Halo Wars.
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Boss Fight done Dungeon Bossa real-time strategy mobile game available on Google (GOOG) Play, Apple App Store (AAPL), and Amazon App Store (AMZN).
Earlier this month, Netflix made a share purchase offer to acquire Finland’s Next Games, a mobile games developer for a total enterprise value of €65m (£54m) .
Founded in 2013, Next Games creates mobile games based on popular entertainment intellectual property (IP) such as stranger things and The Walking Dead.
Next Games has about 120 employees and revenue of approximately €27.2 million in 2020 with 95% of revenue generated by in-game purchases.
Last September, Netflix purchased its first games studio with the acquisition of Glendale, Calif.-based indie game developer Night School Studio, creator of a critically acclaimed adventure game. WITHOUT BEEF.