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According to reports, Wall Street analysts welcomed Netflix, a streaming video service provider, to enter the mobile game market, saying it was a wise move; But at the same time, it also worries that it will take a lot of time and investment to get a return.
Wall Street is optimistic that Netflix will enter the mobile game market with high investment but long return period
Earlier today, Netflix said in its second quarter earnings report for 2021 that it expected weak subscriber growth in film and TV streaming services, so it would go deeper into the field of video games. Although the details of the investment required for the plan were not provided, Greg Peters, product director of Netflix, said it would be a "multi-year" effort and the investment would be "relatively small" at the beginning.
Analysts said that in order to succeed, this initiative aimed at tapping new users and boosting the interest of existing users will require millions of dollars. At present, Netflix has invested billions of dollars in original films and TV dramas.
Paolo Pescatore, an analyst at PP foresight, a research company, said that for Netflix, this strategy is a "costly and bold initiative", which requires a lot of time and investment, and there is no guarantee of success. Peskatore also said: "providing free game services will promote user growth, but as a business model, it is unsustainable."
Netflix's entry into the game market comes as the company faces a slowdown in the growth of new subscribers. Last year, when novel coronavirus pneumonia was most serious, the number of new subscribers in Netflix increased sharply. But today, the company released a weak set of subscriber data, disappointing the market.
Today, Netflix did not give a timetable for the launch of the first games, but said that subscribers can use these games for free.
Sophie Lund Yates, an analyst at Hargreaves Lansdown, an investment consultancy, said: "entering the game market may sound like a good idea, which is an important next step in Netflix's efforts to get us to focus on its screen."
Will McKeon white, an analyst at Forrester, a research firm, believes that the investment required for game projects is comparable to Apple's $500 million launch of apple arade video game subscription service in 2019. "If Netflix wants to compete directly with apple arade, this investment should be the template they follow (at a minimum)," mckian White said
Netflix spent nearly $12 billion on content last year and plans to increase that figure to $17 billion by 2021 in an effort to resist competition from Disney, HBO and other companies.
Netflix has hired Mike verdu, a former Facebook executive, as its game director, who worked for video game pioneers Atari, FIFA and EA.
Financial website investing "I don't think games will be the next revenue source driving Netflix's growth. It also needs to explore other potential sources, such as live sports and advertising," said Jesse Cohen, a senior analyst at netflix.com