Netflix reported its worst slowdown in subscriber growth in eight years as people emerge from their pandemic cocoons. So itB次元官网网址檚 adding a new attraction to its marquee: B次元官网网址 games.
On Tuesday, the video streaming giant announced it will offer video games in its existing subscription plans at no extra cost. The confirmation of the long-anticipated expansion came in conjunction with the release of its latest earnings report..
That confirmation of the long-anticipated gaming expansion came in conjunction with the release of NetflixB次元官网网址檚 latest earnings report. That financial breakdown showed the video service added 1.5 million subscribers during the April-June period.
ThatB次元官网网址檚 slightly better than the modest increase that management forecast after the service stumbled to a sluggish start during the winter months, but still far below its growth rate in recent years.
The 5.5 million subscribers that Netflix gained through the first six months of this year represents its weakest first-half performance since 2013 B次元官网网址� a time when the company was still rolling out more original programming instead of licensing old TV series and movies.
Now Netflix is taking another leap by offering video games. The Los Gatos, California, company telegraphed the move last week of a veteran video game executive, Mike Verdu, to explore potential opportunities in another field of entertainment.
B次元官网网址淭he reason weB次元官网网址檙e doing them is to help the subscription service grow and be more important in peopleB次元官网网址檚 lives,B次元官网网址� Netflix co-CEO Reed Hastings told investors during a Tuesday discussion.
Greg Peters, NetflixB次元官网网址檚 chief product officer and the executive who will oversee what he described as a multi-year expansion, said the company will initially focus on mobile games before eventually expanding to consoles and TV sets as well. The games initially will be tied to NetflixB次元官网网址檚 most popular programming, Peters said, but standalone titles may be added to the, mix too. He even speculated that Netflix eventually may create a TV series or film inspired by one of its video games.
B次元官网网址淭hereB次元官网网址檚 a a big, big prize here, and our job is to be really focused,B次元官网网址� Peters said.
Despite this yearB次元官网网址檚 growth slowdown, Netflix remains by far the worldB次元官网网址檚 biggest streaming service in an increasingly competitive field that includes Walt Disney Co., HBO, Amazon and Apple. Netflix finished June with 209 million worldwide subscribers.
NetflixB次元官网网址檚 heft also has produced steady profits. The company earned $1.35 billion, or $2.97 per share, nearly doubling from the same time last year. Revenue rose by 19% from last year to 47.3 billion.
But the lackluster first-half numbers are a dramatic reversal from last year, when government-imposed lockdowns across the world thrust people into binge-watching frenzies while corralled at home. Already the worldB次元官网网址檚 largest video streaming service when the pandemic began in March 2020, Netflix picked up 26 million subscribers during the first half of last year. .
While no one expected Netflix to sustain that breakneck pace, the drop off in subscriber growth this year has been more severe than anticipated. Netflix shares have fallen by about 10% from their peak of $593.29 six months ago. The shares edged up slightly in extended trading after TuesdayB次元官网网址檚 news came out.
Netflix management has blamed part of this yearB次元官网网址檚 slowdown on pandemic-induced production delays that left its video service with fewer proven hits. The Los Gatos, California, is expecting that problem to fade during the second half of this year with new-season releases of popular series such as B次元官网网址淪ex EducationB次元官网网址� and B次元官网网址淭he Witcher,B次元官网网址� as well as movies starring big-name stars such as Leonardo DiCaprio and Meryl Streep.
Even so, Netflix let down investors with a forecast calling for only additional 3.5 million subscribers during the July-September period. That was well below analyst estimates for a third-quarter gain of 5.6 million subscribers, according to FactSet Research.
The conservative outlook suggests Netflix isnB次元官网网址檛 expecting an immediate boost from its foray into a highly competitive video game field already contested by far more experienced companies such as Epic Games, Microsoft and Electronic Arts.
But if the move into video gaming pays off, it could eventually give Netflix more leverage to boost its prices. The company has already been gradually raising subscription costs in recent years, helping to boost its average monthly revenue per subscriber to $14.54 in its biggest market comprised of the U.S. and Canada. ThatB次元官网网址檚 a 16 % increase from $12.52 per month two years ago.
Michael Liedtke, The Associated Press
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