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Netflix's (NFLX) Latest Hire Signals Its Video Game Plans
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Netflix (NFLX - Free Report) has appointed former EA and Facebook executive Mike Verdu as its vice president of game development, per a Bloomberg report. The appointment reflects the company’s seriousness in developing games, a move that will help it expand its footprint beyond streaming.
Verdu has been a video game industry veteran. Apart from stints in EA and Facebook, he also served as the chief creative officer for Zynga between 2009 and 2012. The appointment of Verdu will certainly provide momentum to Netflix’s video game ambitions.
The company currently operates in a saturated streaming market in the United States, and is facing stiff competition from the likes of The Walt Disney (DIS - Free Report) , Amazon, Comcast (CMCSA - Free Report) , Apple (AAPL - Free Report) , ViacomCBS and AT&T.
Netflix has witnessed sluggish subscriber growth in recent times, primarily due to rising competition. For instance, in first-quarter 2021 Netflix added 3.98 million paid subscribers globally against the addition of 15.77 million in the year-ago quarter. The company also missed its guidance of 6 million paid-subscriber addition.
For second-quarter 2021, Netflix expects to add 1 million subscribers against 10.09 million it added in the year-ago quarter.
In contrast, Walt Disney’s streaming app Disney+ added 8.7 million subscribers between Jan 2 and Apr 3. Disney+ remains on track to achieve its prior guidance of 230-260 million paid subscribers by the end of fiscal 2024.
Comcast’s Peacock has also gained significant traction within a short span (launched on Jul 15, 2020) of time. At the end of a year of its launch, Peacock had 42 million sign-ups.
The intensifying competition has also been reflected in the latest Emmy Award nominations list. While Netflix received the highest number of Emmy nominations for the second year in a row, its number of nominations, 129, declined from 160 in 2020, per Quartz.
On the other hand, Disney+ received 71 nominations compared with 19 last year. Apple TV+ received 34 against 18 last year. First-time eligible streaming services – HBO Max, Paramount+ and Peacock – received 36, six and two nominations, respectively.
Will Video Game Expansion Aid Prospects?
Netflix has been taking a number of initiatives to keep its growth prospects strong in the long haul. Its focus on developing regional content and expansion into different genres, including kids’ programming, has been laudable. Addition of celebrity content creators like Steven Spielberg and Shonda Rhimes has been a game changer.
However, other streaming service providers, particularly Disney+ and HBO Max, are catching up fast with Netflix. Stiff competition has been an overhang on its shares. Year to date, shares of this Zacks Rank #3 (Hold) company are up 1.3%, underperforming the Zacks Broadcast Radio and Television industry’s return of 10.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Netflix’s plan to expand beyond streaming was evident from its e-commerce initiative. Last month, the company launched its first owned-and-operated online retail outlet, Netflix.shop, to sell products directly to consumers.
Markedly, Netflix is not new to video games or interactive video formats on its service. In 2017, the company launched an interactive video format that allowed users to choose story options for its original productions Black Mirror: Bandersnatch and You vs. Wild.
Video games have also been created based on its shows Stranger Things and La casa de Papel (Money Heist). The appointment of Mike Verdu is now expected to prioritize Netflix’s video game development endeavors, thereby opening up a new source of revenues.
Netflix expects second-quarter 2021 revenues to grow 18.8% year over year to $7.30 billion. The Zacks Consensus Estimate for the quarter is pegged at $7.31 billion, indicating 19% growth from the figure reported in the year-ago quarter.
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Netflix's (NFLX) Latest Hire Signals Its Video Game Plans
Netflix (NFLX - Free Report) has appointed former EA and Facebook executive Mike Verdu as its vice president of game development, per a Bloomberg report. The appointment reflects the company’s seriousness in developing games, a move that will help it expand its footprint beyond streaming.
Verdu has been a video game industry veteran. Apart from stints in EA and Facebook, he also served as the chief creative officer for Zynga between 2009 and 2012. The appointment of Verdu will certainly provide momentum to Netflix’s video game ambitions.
The company currently operates in a saturated streaming market in the United States, and is facing stiff competition from the likes of The Walt Disney (DIS - Free Report) , Amazon, Comcast (CMCSA - Free Report) , Apple (AAPL - Free Report) , ViacomCBS and AT&T.
Netflix has witnessed sluggish subscriber growth in recent times, primarily due to rising competition. For instance, in first-quarter 2021 Netflix added 3.98 million paid subscribers globally against the addition of 15.77 million in the year-ago quarter. The company also missed its guidance of 6 million paid-subscriber addition.
For second-quarter 2021, Netflix expects to add 1 million subscribers against 10.09 million it added in the year-ago quarter.
In contrast, Walt Disney’s streaming app Disney+ added 8.7 million subscribers between Jan 2 and Apr 3. Disney+ remains on track to achieve its prior guidance of 230-260 million paid subscribers by the end of fiscal 2024.
Comcast’s Peacock has also gained significant traction within a short span (launched on Jul 15, 2020) of time. At the end of a year of its launch, Peacock had 42 million sign-ups.
The intensifying competition has also been reflected in the latest Emmy Award nominations list. While Netflix received the highest number of Emmy nominations for the second year in a row, its number of nominations, 129, declined from 160 in 2020, per Quartz.
On the other hand, Disney+ received 71 nominations compared with 19 last year. Apple TV+ received 34 against 18 last year. First-time eligible streaming services – HBO Max, Paramount+ and Peacock – received 36, six and two nominations, respectively.
Will Video Game Expansion Aid Prospects?
Netflix has been taking a number of initiatives to keep its growth prospects strong in the long haul. Its focus on developing regional content and expansion into different genres, including kids’ programming, has been laudable. Addition of celebrity content creators like Steven Spielberg and Shonda Rhimes has been a game changer.
However, other streaming service providers, particularly Disney+ and HBO Max, are catching up fast with Netflix. Stiff competition has been an overhang on its shares. Year to date, shares of this Zacks Rank #3 (Hold) company are up 1.3%, underperforming the Zacks Broadcast Radio and Television industry’s return of 10.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Netflix, Inc. Price and Consensus
Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote
Netflix’s plan to expand beyond streaming was evident from its e-commerce initiative. Last month, the company launched its first owned-and-operated online retail outlet, Netflix.shop, to sell products directly to consumers.
Markedly, Netflix is not new to video games or interactive video formats on its service. In 2017, the company launched an interactive video format that allowed users to choose story options for its original productions Black Mirror: Bandersnatch and You vs. Wild.
Video games have also been created based on its shows Stranger Things and La casa de Papel (Money Heist). The appointment of Mike Verdu is now expected to prioritize Netflix’s video game development endeavors, thereby opening up a new source of revenues.
Netflix expects second-quarter 2021 revenues to grow 18.8% year over year to $7.30 billion. The Zacks Consensus Estimate for the quarter is pegged at $7.31 billion, indicating 19% growth from the figure reported in the year-ago quarter.