Netflix (NFLX) – Get the Netflix, Inc. (NFLX) report hinted at a potential video game based on its flagship show “Squid Game” on Tuesday night and added that it has made progress in building its offline consumer product offerings as it seeks other sources of revenue to add to its subscription service in order to compete with its rival Disney (SAY) – Get the Walt Disney Company report.
Netflix co-CEO Reed Hastings, who wore a Squid Game-inspired tracksuit during the earnings call with investors following a stronger-than-expected third-quarter report, told investors the new seasons of the dystopian hit could include play options.
“… imagine maybe three years from now and a future Squid Game launches, it comes with an incredible array of interactive options or games and it’s all built into the service,” Hastings said. “And then of course you have your non-Netflix aspects, the experiences we build, the consumer products, it all comes together.”
“So a company like Disney is always ahead of us in some of these dimensions of setting up this whole experience, but boy are we making progress,” he added. “And so exciting over the next three to five years to kind of bridge that gap.”
Shares of Netflix were down 1.1% at midday on Wednesday to change hands to $ 632.05 each.
Netflix reported earnings of $ 1.44 billion or $ 3.19 per share, well ahead of Street’s consensus forecast of $ 2.56 per share and up 83% from last year . For the three months ended September, Netflix said revenue rose 16% from a year ago to $ 7.5 billion, largely in line with analyst estimates.
The success of his hit Korean show, seen by 142 million households, could bring Netflix nearly $ 900 million, more than 40 times its cost of production, Bloomberg News reported last weekend.
The Los Gatos, Calif., Company said it has started testing its gaming offering in select countries in a letter to shareholders. Netflix executives at the call also said the company will definitely want to be part of the intellectual property rights for its games.
“And mostly what we’ve done so far is basically making sure all of our systems are working the way we want them to. So it’s really about proving to ourselves that we can deliver the way we want,” said the chief operating officer. Officer and Product Manager Greg Peters, also present on Tuesday night’s earnings call.
Netflix hired former Electronic Arts alumnus (EA) – Get the report from Electronic Arts Inc. and Facebook (FB) – Get the Class A report from Facebook, Inc. Peters in July to lead its games division.
“So we’re really checking the first few elements of this process, and it’s going well. We have a positive trajectory,” Peters added.
Netflix has a long list of big-name movies that will be arriving in the next few months, including “Red Notice,” starring Dwayne Johnson and Ryan Reynolds, and “The Power of the Dog,” starring Benedict Cumberbatch and Kirsten Dunst. There will also be new seasons of hit shows “The Witcher” and “Cobra Kai”.
“We create all of these amazing universes, worlds, characters and stories, and we can get attached to the passion and fandom that our members have to watch those on the video side with gaming experiences and allow them to go more. away and explore spaces they wouldn’t have seen otherwise from the video side, ”Peters said in a video recording.
Netflix bought video game maker Night School Studio in September and launched five mobile game titles in select European markets. The company said the games will be included as part of a Netflix subscription with no ads or in-app purchases.
“We’re excited that by removing what we see as distractions from the core enjoyment experience associated with other models like ads or in-app monetization, the costs per title we can really give our members a much easier, straightforward fun experience with games, just like we have with TV shows and movies, ”said Peters.
Peters added that Netflix will take everything from licensing and partner-produced approach to self-production of games, including in-house game development capability.
Last week, the company partnered with retail giant Walmart (WMT) – Get the report from Walmart Inc. to sell merchandise related to blockbuster shows like Squid Game, Stranger Things, etc.
“I believe consumer products are really a great way to improve the relationship with content and fans… we have it in our wheelhouse so we can do that and grow,” said Co-GM and Chef L content officer Ted Sarandos in response to a question from Fidelity analyst Nidhi Gupta.
“The demand for consumer products to celebrate Squid Game’s fandom is high and these items are being retailed now,” the company told shareholders after releasing its third quarter results.