Netflix is on a gaming spending spree – should Nintendo, Sony and Xbox worry?

The Stranger Things mobile game from Netflix partner Next Games
(Image credit: Next Games)

Just because Netflix is cancelling another hit TV show, it doesn’t mean the streaming company isn’t investing elsewhere. In fact, Netflix’s executives’ eyes seem increasingly turned away from TV content and towards gaming, as its latest acquisition proves.

The company is buying Finnish games development studio Next Games. The developer has a track record for creating mobile games based on entertainment licenses, and has already created gem-matching RPG puzzler Stranger Things: Puzzle Tales, based on the sci-fi horror franchise, one of the best Netflix shows

It’s also put out a number of games based on The Walking Dead too, including The Walking Dead: Our World, which uses mixed-reality and augmented reality elements in a similar way to what’s already proven hugely successful in Niantic’s Pokemon Go.

The acquisition is set to complete in the second quarter of 2022.

“Next Games has a seasoned management team, strong track record with mobile games based on entertainment franchises, and solid operational capabilities,” said Michael Verdu, Vice President of Games, Netflix. 

“We are excited for Next Games to join Netflix as a core studio in a strategic region and key talent market, expanding our internal game studio capabilities. While we’re just getting started in games, I am confident that together with Next Games we will be able to build a portfolio of world class games that will delight our members around the world.”

“Joining forces with the world’s largest streaming service, Netflix, presents an opportunity for a logical and exciting continuation of our strategy to craft interactive experiences for the world to enjoy,” added Teemu Huuhtanen, Chief Executive Officer, Next Games.

“Our close collaboration with Netflix on Stranger Things: Puzzle Tales has already proven that together we create a strong partnership.” 

What Netflix’s game industry purchases mean for gamers

Though it pales in comparison to Microsoft’s $75 billion acquisition of Activision, Netflix’s purchase of Next Games, at $65 million, still represents the company’s biggest investment in gaming since it announced intent to expand its interactive entertainment output last July.

Should the likes of Nintendo, Sony and Microsoft be concerned about Netflix eating into their gaming-focussed lunches? 

Perhaps Microsoft, whose purchase of Activision also included the subsidiary mobile gaming company King. But otherwise… probably not. Netflix is looking to capture some of an (admittedly large) gaming audience on mobile, but it is one that, for the most part, the ‘core’ gaming companies still shy away from.

Instead, Netflix’s move sees it maneuvring to diversify its output, as it follows its viewership away from their TV screens and out into the real world on their other devices. Netflix is as much a technology company as it is an entertainment one, and gaming gives it an opportunity to monetize its intellectual property (and the existing baked-in audiences) in new ways. 

When you think about the buzz around the metaverse that’s happening (and apparent investment into it from juggernauts Facebook / Meta, and Apple with its upcoming headset), you can see why Netflix would be interested in partnering with a company that already has experience bringing entertainment properties to life through AR applications.

Expanding popular franchises beyond just one platform is the best opportunity to squeeze more money from them – in Next Games, Netflix has found a partner that can not only put them on smartphones, but potentially into the mixed reality worlds we’ll soon be spending our time in.

It’s worth noting that Finland is the de facto home of mobile gaming too – Clash of Clans developer Supercell is based out of the country, as is mobile gaming veteran Rovio, home of Angry Birds. So there’s a hotbed of local talent that Netflix’s gaming teams can tap into to achieve this goal.

Gerald Lynch

Gerald is Editor-in-Chief of Previously he was the Executive Editor for TechRadar, taking care of the site's home cinema, gaming, smart home, entertainment and audio output. He loves gaming, but don't expect him to play with you unless your console is hooked up to a 4K HDR screen and a 7.1 surround system. Before TechRadar, Gerald was Editor of Gizmodo UK. He is also the author of 'Get Technology: Upgrade Your Future', published by Aurum Press.