Scan to Download ios&Android APP

Netflix (NFLX) bought another mobile games studio: Why?

14:28, 25 March 2022

Share this article
In this article:
  • AMZN

    106.78 USD
    -2.61 -2.400%
  • MSFT

    257.91 USD
    -2.72 -1.050%
  • NFLX

    177.28 USD
    -1.79 -1.000%

Have a confidential tip for our reporters?

A man plays a game on a smartphone
Netflix launched an ad-free gaming service for smartphones and tablets late last year – Photo: Shutterstock

Netflix (NFLX) has bought its third video game studio in six months, expanding its catalogue of mobile games for a service which is only a few months old.

On Thursday, Netflix announced that it bought Boss Fight Entertainment, an Allen, Texas-headquartered mobile games maker with studios in Austin and Seattle.

Characters from Boss Fight's Dungeon Boss gameCharacters from Boss Fight's Dungeon Boss game – Credit: Boss Fight Entertainment

Financial details of the deal were not released. As at 10:30 am EDT (UTC-4) Netflix stock was down 1.25% at $371.03. For the year to date, the stock is up/down 38%.

“Since we launched mobile games to our members around the world just four months ago, we’ve been expanding our games catalogue bit by bit as we build out our in-house creative development team,” Netflix VP of Game Studios Amir Rahimi said in a statement.

Gaming service

With the launch of its ad-free gaming service for smartphones and tablets late last year, Netflix is expanding beyond streaming video.

This raises the possibility its games could tie-in with some of Netflix’s entertainment content. When a show ends its season, you can continue to play the mobile game.

“Like our shows and films, these games will all be included as part of your Netflix membership, all with no ads and no in-app purchases,” Netflix VP of Game Development Mike Verdu said in an earlier press release.

"We think that Netflix views mobile gaming as an additional vector to engage with their viewers as well as provide more value for the same subscription price which continues to rise," Morningstar analyst Neil Macker told Capital.com.

"From an investor viewpoint, there is no current revenue path for the games. Netflix could add in-game purchases or advertising down the road but management has not provided any indication that either path will occur in the near future." 
 
"We think that the video game business is a distraction from the core business and that Netflix will struggle to make a major impact in the space," the Morningstar analyst said.

Netflix subscribers are not paying extra for the games service.

Founded in 2013 key members of the Boss Fight’s management team worked at Microsoft’s (MSFT) Ensemble Studios and Zynga (ZNGA), working on real-time strategy titles such as Age of Empires and Halo Wars.

What is your sentiment on AMZN?

106.78
Bullish
or
Bearish
Vote to see Traders sentiment!

Boss Fight makes Dungeon Boss, a mobile real-time strategy game available on Google (GOOG) Play, Apple (AAPL) App Store and Amazon’s (AMZN) app store.

 

Other studios

Earlier this month Netflix made an all-share stock offer to acquire Finland’s Next Games, a mobile games developer for a total enterprise value of €65m (£54m).

Video game characters from Next GamesVideo game characters from Next Games – Credit: Next Games

Founded in 2013, Next Games creates mobile games based on popular entertainment intellectual property (IP) such as Stranger Things and The Walking Dead.

Next Games has around 120 employees and reported sales of approximately €27.2m in 2020 with 95% of revenues generated from in-game purchases.

Last September Netflix purchased its first games studio with the acquisition of Glendale, California-based independent game developer Night School Studio, maker of critically-acclaimed adventure game OXENFREE.

Read more:

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?


Join the 400.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account

2. Make your first deposit

3. You’re all set. Start trading