Netflix expands into cloud gaming, opens new studio in Southern California • TechCrunch
At TechCrunch Disrupt, Netflix VP of Gaming Mike Green has released two pieces of news about the streaming giant’s foray into gaming. Verdu said Netflix is ”seriously exploring cloud gaming offerings.” The company will also open a new gaming studio in Southern California.
“It is an added value. We’re not asking you to subscribe as a console replacement,” Verdu said on stage. “It’s a completely different business model. We hope that over time it will become a very natural way to play games wherever you are.”
Google’s Stadia and Amazon’s Luna have made the same play, trying to sell video games that people can play even if they don’t have an expensive gaming PC or console of their choice. But these services have struggled to reach mainstream users. Google recently said it would turn off Stadia in January.
“While Stadia’s approach to consumer game streaming is built on a strong technological foundation, it hasn’t gained the user traction we expected, so we’ve made the difficult decision to begin phasing out our Stadia streaming service,” Stadia VP and GM Phil Harrison wrote in a blog post.
Verdu believes that these products had problems because of their business models, not the technology itself.
“Stadia was a technical success. It was fun to play matches at the Stadia,” said Verdu. “There were some problems with the business model, of course.”
Both Stadia and Luna have dedicated controllers — but Verdu was reticent to say whether we can expect a Netflix gaming controller in the future.
However, he did reveal that Netflix is ramping up game development by opening an in-house studio in Southern California. This is the company’s fifth studio – just last month, Netflix set the action in Helsinki, Finland with former Zynga GM at the helm. Others include Boss Fight Entertainment, Night school studio and Finland Next gameseach designed to develop games for different tastes.
The new Californian studio will be headed by Chacko Sonny, former executive producer of the “Overwatch” series. At Blizzard Entertainment, “Overwatch” was a huge success, bringing in billions of dollars. Sonny announced his departure from Blizzard last year following an SEC investigation into sexual harassment and discrimination at the dominant gaming company.
“He could have done anything, but he chose to come here,” Verdu said. “You can’t get people like that to come into your organization to build the next big thing in gaming unless there’s a sense that we’re really in it for the long haul and in it for the right reasons.”
Since announcing its foray into gaming, Netflix has 14 games in development at its own studios and now has 35 games on the service. In total, Verdu said he currently has 55 games “on the fly.” These games include experiences based on original IP such as “Stranger Things” as well as licensed IP such as “Spongebob Squarepants.” Netflix also develops original games.
“We hope that over time the balance will be 50% of Netflix IP,” said Verdu.
The company is still considered to be in the very early stages of its gaming initiative, but hasn’t ruled out expansion beyond mobile – although we understand it won’t be going to console or VR at this point.
News of gaming studio startups and plans for cloud gaming comes like Netflix announces its third quarter earnings, which sees the streamer beat expectations with the addition of 2.41 million subscribers, bringing its total to 223.09 million. Netflix forecast a net profit of just one million subscribers in the third quarter. The company also reported Q3 2022 revenue of $7.93 billion, while analysts were forecasting $7.85 billion.
Update 10/18/22 5:54 PM ET to clarify that 14 titles are “in development” not “developed”.
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