Netflix Confirms Switch To Video Games As Growth Slows | Nation
SAN RAMON, Calif. (AP) – Netflix has reported its worst slowdown in subscriber growth in eight years as people emerge from their pandemic cocoons. But he has an answer for that: video games.
On Tuesday, the streaming giant announced plans to start adding video games to its existing subscription plans at no additional cost. Confirmation of the long-awaited expansion came alongside the release of its latest earnings report.
This financial breakdown showed that the video service added 1.5 million subscribers during the April-June period. This is slightly better than the modest increase expected by management after the service got off to a slow start during the winter months, but still well below its growth rate in recent years.
The 5.5 million subscribers Netflix gained in the first six months of this year marks its weakest first-half performance since 2013 – a period when the company was still rolling out more original programming instead of licensed from old TV series and movies.
Now, Netflix is taking a new step by offering video games. The Los Gatos, Calif., Company telegraphed the move last week when it revealed the hiring of veteran video game executive Mike Verdu to explore potential opportunities in another area of entertainment.
“We see gaming as another new category of content for us, similar to our expansion into original films, animation and unscripted television,” Netflix wrote in a letter to shareholders on Tuesday.
Despite slowing growth this year, Netflix remains by far the largest streaming service in the world in an increasingly competitive field that includes Walt Disney Co., HBO, Amazon and Apple. Netflix ended June with 209 million subscribers worldwide.
The weight of Netflix also generated stable profits. The company earned $ 1.35 billion, or $ 2.97 per share, almost double from the same period last year. Revenue increased 19% from last year to $ 47.3 billion.
But the lackluster first-half numbers are a dramatic reversal from last year, when lockdowns imposed by governments across the world caused people to binge-feed while locked at home. Already the world’s largest video streaming service when the pandemic began in March 2020, Netflix garnered 26 million subscribers in the first half of last year. .
While no one expected Netflix to keep up this breakneck pace, the decline in subscriber growth this year has been more severe than expected. Netflix shares are down about 10% from their high of $ 593.29 six months ago. Shares edged higher in extended trading after Tuesday’s news broke.
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