San Francisco Chronicle
Netflix to turn to video games
Netflix reported its worst slowdown in subscriber growth in eight years as people emerge from their pandemic cocoons. But it has an answer to that: video games.
On Tuesday, the streaming giant announced plans to begin adding video games to its existing subscription plans at no extra cost. The confirmation of the longanticipated expansion came in conjunction with the release of its latest earnings report.
That financial breakdown showed the video service added 1.5 million subscribers during the AprilJune period. That’s 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 marks its weakest firsthalf performance since 2013 — a period 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 company telegraphed the move last week when it disclosed the hiring of a veteran video game executive, Mike Verdu, to explore potential opportunities in another field of entertainment.
Despite this year’s growth slowdown, Netflix remains by far the world’s 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.
Netflix’s 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 $7.3 billion.