Netflix expands into cloud gaming and opens new studio in Southern California • TechCrunch

At TechCrunch Disrupt, Netflix VP of Gaming Mike Verdu dropped two pieces of news about the streaming giant’s foray into games. Verdu said Netflix is ​​”seriously investigating any cloud gaming offering.” 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. The hope is that over time it will become this very natural way to play games wherever you are.”

Google’s Stadia and Amazon’s Luna have played the same game, trying to sell video games that people can play even if they don’t have an expensive game console or coveted console. But these services struggle to achieve mainstream user adoption. Google recently said it will close Stadia in January.

“While Stadia’s approach to streaming games for consumers is built on a strong technology foundation, it hasn’t gained the traction with users we expected, so we’ve made the difficult decision to phase out our Stadia streaming service,” he said. Stadia VP and GM Phil Harrison wrote in a blog post.

Verdu thinks these products struggled because of their business models, not because of the technology itself.

Mike Verdu, VP Games at Netflix talks about “whether game streaming can go mainstream” at TechCrunch Disrupt in San Francisco on Oct. 18, 2022. Image Credits: Haje Kamps / TechCrunch

“Stadia was a technical success. It was fun to play games on Stadia,” said Verdu. “It had some issues with the business model, sure.”

Both Stadia and Luna have dedicated controllers, but Verdu was hesitant to say whether we can expect a Netflix game controller in the future.

However, he revealed that Netflix is ​​ramping up its game development by opening an in-house studio in Southern California. This is the company’s fifth studio – last month Netflix set up shop in Helsinki, Finland with a former Zynga GM at the helm. Others include Boss Fight Entertainment, Night School Studio, and Finland’s Next Games, each of which is designed to develop games for different tastes.

The new California studio will be headed by Chacko Sonny, the former executive producer of Overwatch. At Blizzard Entertainment, ‘Overwatch’ was a huge success, grossing billions of dollars. Sonny announced his departure from Blizzard last year in the wake of an SEC investigation into sexual harassment and discrimination at the dominant gaming company.

“He could have done anything, but he chose to come here,” said Verdu. “You don’t get people like that into your organization to build the next big thing in gaming unless we feel like we’re really in it for the long haul and for the right reasons.”

Since announcing its foray into gaming, Netflix has 14 games in development in its own studios and now has 35 games on the service. In total, Verdu said it currently has 55 matches “on the air”. 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 the balance is about 50% Netflix IP over time,” Verdu said.

The company still sees itself in the very early stages of its gaming initiative, but isn’t ruling out expansions beyond mobile – although we understand it won’t be heading to console or VR at this point.

News of the gaming studio’s launch and cloud gaming plans comes in as Netflix announces its Q3 revenue, pushing the streamer to exceed expectations with the addition of 2.41 million subscribers, bringing the total to 223.09 million. Netflix had forecast net profit of just 1 million subscribers for the third quarter. The company also reported revenue of $7.93 in the third quarter of 2022, with analysts forecasting $7.85 billion.

Update, 10/18/22, 5:54 PM ET to clarify that the 14 titles are “in development”, not “developed”.

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