# Netflix’s gaming foray will cost time and money – Wall St Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-07-21 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Netflix leaps into mobile gaming, analysts cautious on Meta Description: Wall Street analysts cautiously optimistic on Netflix's new venture into mobile gaming, but question the time and investment needed for success. URL: https://financedigest.com/netflixs-gaming-foray-will-cost-time-and-money-wall-sthtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-07-21t115704z1lynxmpeh6k0prrtroptp4netflix-gaming-1736838154319-compressed.jpg) By Nivedita Balu and Akanksha Rana (Reuters) – Wall Street analysts welcomed Netflix’s planned plunge into mobile gaming on Wednesday, calling it a sensible move to keep users’ eyes on screens while worrying it would take significant time and investment to pay off. Announcing the move with this week’s quarterly results, the video streaming pioneer offered little detail about the investment its plans would require, but product boss Greg Peters said it would be a “multi-year” effort that would start “relatively small”. Analysts said that to be successful the move, which aims to tap new users and prop up interest among its existing audience, would need multi-million-dollar [spending at a time when it is already pouring billions](https://www.financedigest.com/chipmaker-infineon-ready-to-spend-billions-on-acquisitions-ceo.html "Chipmaker Infineon ready to spend billions on acquisitions – CEO") into original films and TV serials. Paolo Pescatore, an analyst at research firm PP Foresight said the venture would be “a costly bold move” for the company, requiring [significant time and investment](https://www.financedigest.com/hermes-bolsters-sme-service-with-significant-investment.html "HERMES BOLSTERS SME SERVICE WITH SIGNIFICANT INVESTMENT") with no guarantee of success. Making games for free will drive users, but it is not sustainable long term as a [business model,”](https://www.financedigest.com/learning-from-the-disrupters-how-finance-brands-can-build-transformative-business-models.html "Learning from the disrupters – how finance brands can build transformative business models") he added. The gaming [plans come as Netflix faces slowing growth in new subscribers after a record surge at the height of the COVID-19 pandemic last year](https://www.financedigest.com/3-factors-to-plan-for-in-2017-a-year-like-none-other.html "3 Factors to Plan for in 2017, A Year Like None Other"). It disappointed [markets on Tuesday with an anemic set](https://www.financedigest.com/telecom-api-market-api-set-to-redefine-telecom-sector-as-telecom-2-0-gets-closer-to-reality.html "Telecom API Market – API Set to Redefine Telecom Sector as Telecom 2.0 Gets Closer to Reality") of subscriber forecasts. The company gave no timeline on the launch of its first games, [saying only they would be available to subscribers at no extra charge](https://www.financedigest.com/germany-added-35-more-electric-car-charge-points-in-2022-says-bdew.html "Germany added 35% more electric car charge points in 2022, says BDEW"). A foray into the world of gaming might simply sound like a nice idea, but it’s an important next [step in Netflix’s efforts to keep](https://www.financedigest.com/five-steps-the-uk-must-take-to-keep-its-fintech-crown.html "Five steps the UK must take to keep its Fintech crown") our eyes on its screens,” said Hargreaves Lansdown analyst Sophie Lund-Yates. “Netflix’s engine drivers need some grease.” Forrester analyst Will McKeon-White likened the [investment required in the gaming project to Apple’s $500 million](https://www.financedigest.com/sse-to-invest-122-million-in-scottish-pumped-hydro-project.html "SSE to invest 2 million in Scottish pumped hydro project") launch of its Apple Arcade videogame subscription service in 2019. “If Netflix wants to be directly competitive with Apple Arcade, this investment should be the template for them to follow/minimum,” McKeon-White said. Netflix spent almost $12 billion dollars on content last year and [plans to up that to $17 billion in 2021 as it strives to fend off competition from Disney](https://www.financedigest.com/paw-patrol-unleashed-behind-viacomcbss-plan-to-take-on-disney.html "‘Paw Patrol’ unleashed: Behind ViacomCBS’s plan to take on Disney"), HBO and others. It has hired [former Facebook executive Mike Verdu — a veteran of videogame pioneer Atari and FIFA and Battlefield publisher Electronic Arts — as its head](https://www.financedigest.com/italy-names-former-treasury-official-to-head-ita-airways.html "Italy names former Treasury official to head ITA Airways") of gaming. The global gaming market was worth an estimated $72 billion in [sales last year](https://www.financedigest.com/uk-car-sales-hit-30-year-low-in-2022-but-could-grow-15-this-year-smmt.html "UK car sales hit 30-year low in 2022, but could grow 15% this year – SMMT"), although much of that goes to blockbuster franchises like Call of Duty or social gaming platforms Minecraft, Fortnite and Roblox. I don’t [see games becoming the next](https://www.financedigest.com/britains-next-sees-lower-profit-in-2023-as-consumer-outlook-darkens.html "Britain’s Next sees lower profit in 2023 as consumer outlook darkens") revenue stream to turbo-charge Netflix’s growth,” said Investing.com senior analyst Jesse Cohen. It will need to [explore other potential](https://www.financedigest.com/oil-firms-must-step-up-exploration-off-norway-to-unlock-potential-npd.html "Oil firms must step up exploration off Norway to unlock potential -NPD") sources such as live sports broadcasting and advertising. (Reporting by Nivedita Balu and Akanksha Rana in Bengaluru, additional reporting by Tanvi Mehta; Editing by Anshuman Daga and Patrick Graham) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---