Netflix's Latest Acquisition Expands Gaming Footprint

Netflix (NFLX - Free Report) announced the acquisition of a Texas-based game developer and publisher, Boss Fight Entertainment. The financial terms of the deal have not yet been disclosed.

Boss Fight’s extensive experience in building popular games across all genres is expected to strengthen Netflix’s foothold in the gaming industry.

Netflix has been looking for ways to keep its existing user base engaged, and also attract new subscribers. Last year, the company had announced its plans to expand beyond its entertainment offerings and improve its mobile gaming experience.

The acquisition of Boss Fight is the streaming giant’s third studio purchase since setting sights on the gaming industry.

Netflix, Inc. Price and Consensus

Netflix, Inc. Price and Consensus

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Strategic Acquisitions and Gaming Portfolio Expansion

The streaming giant is riding on strategic acquisitions to expand its user base. Netflix is also looking to up the ante with a solid content portfolio, which is expected to keep the user base engaged.

In September 2021, Netflix acquired Oxenfree developer, Night School, founded by Sean Krankel and Adam Hines in 2014.

Earlier this month, Netflix announced that it would acquire Next Games, a developer and publisher of mobile games based in Helsinki, Finland, for €65 million ($72 million).

Next Games, founded in 2013 and led by Teemu Huuhtanen, specializes in mobile games based on popular entertainment franchises like Stranger Things: Puzzle Tales, the story-driven puzzle RPG (role-playing game) inspired by one of Netflix’s popular series.

Netflix is expanding its gaming content with new mobile games. On Mar 22, the company announced that Netflix games are now available on Android and iOS devices. With a Netflix subscription, there will be no ads, fees or in-app purchases for these games.

NFLX further expanded its gaming portfolio with the release of its first first-person shooter game, Into The Dead 2: Unleashed.

Developed by New Zealand-based developer PikPok, the game features multiple action-packed chapters, dozens of stages (oil fields and military bases) and hundreds of challenges (think burning forests and snowy mountain tops).

Netflix launched its games in November 2021 with five titles and eventually expanded it to 14 titles. Netflix’s games belong to various genres, including casual puzzleS and card games to scrolling arcade-style titles. Touted as the “ultimate runner/shooter hybrid”, Into The Dead 2: Unleashed pushes Netflix into the more serious gaming space, which is expected to attract subscribers.

Netflix will also release a couple of games this month, including This Is A True Story developed by Frosty Pop and Shatter Remastered, a PikPok production.

Netflix has a lower number of development studios compared with companies like Sony (SONY - Free Report), Nintendo (NTDOY - Free Report), and Microsoft (MSFT - Free Report), which produce gaming consoles and massively hit game franchises. Thus, Netflix’s acquisitions have been much narrower in scope.

Sony Interactive Entertainment has a video game brand, famously known as the PlayStation. PlayStation consists of two hand-held video game consoles, five home video game consoles, a media center, and a smartphone, among other things. Some of its best game franchises include Spider-Man, Crash Bandicoot, Final Fantasy and God Of War, among others.

Nintendo, which dominated the gaming landscape throughout the late 80s and 90s, has several hit franchises like Brain Age, Kirby, Super Smash Bros., Pokémon and Mario, among several others.

Microsoft’s video gaming brand is known as Xbox, which currently consists of five video game consoles, applications, streaming services and an online service names Xbox network. It also has a development arm known as Xbox Game Studios. Microsoft’s most popular gaming franchises include Halo, Age of Empires, Gears of War, Fable and Killer Instinct, to name a few.

But the major acquisitions made by Netflix —currently carrying a Zacks Rank #4 (Sell)— in the last few months only highlight its emerging strategy as it aims to catch up with its competitors.

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