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Netflix opens new studio in Southern California to expand into cloud gaming TechCrunch

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At TechCrunch Disrupt, Netflix Vice President of Gaming Mike Verdu broke two bits of news about the streaming giant’s foray into games. Verdu said that Netflix is ​​”seriously investigating a cloud gaming offering.” The company will also open a new game studio in Southern California.

“This is an added value. We’re not asking you to subscribe instead of a console,” Verdu said on stage. “It’s a completely different business model. There’s hope that over time, gaming will become such a natural way to play wherever you are.”

Google’s Stadia and Amazon’s Luna have made the same game by trying to sell video games that people can play even if they don’t have an expensive gaming PC or coveted consoles. But these services have struggled to drive mainstream user adoption. Google recently said it will shut down Stadia in January.

Stadia Vice President and Stadia Vice President, “While Stadia’s approach to game streaming for consumers is built on a strong technology foundation, it hasn’t received the attention we expected from users, so we made the difficult decision to begin ending our Stadia streaming service.” GM Phil Harrison wrote in a blog post.

Verdu thinks these products are being challenged by their business model, not the technology itself.

Netflix Vice President of Gaming Mike Verdu talks about “whether gaming streaming can go mainstream” at TechCrunch Disrupt in San Francisco on October 18, 2022. Image Credit: Haje Kamps / TechCrunch

“Stadia was a technical success. Playing on Stadia was fun,” Verdu said. “He had some issues with the business model, of course.”

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

Still, he announced that Netflix is ​​accelerating game development by opening an in-house studio in Southern California. This is the company’s fifth studio – just last month, Netflix opened a store in Helsinki, Finland, under the direction of a former Zynga GM. Others include Boss Fight Entertainment, Night School Studio and Finland’s Next Games, each designed to develop games for different tastes.

The new California studio will be led by Chacko Sonny, former executive producer of “Overwatch.” At Blizzard Entertainment, “Overwatch” was a net success of billions. Sonny announced he was leaving Blizzard last year, following an SEC investigation into sexual harassment and discrimination at his dominant gaming company.

“He could have done anything, but he chose to come here,” Verdu said. “You can’t have people like this coming into your organization to build the next big thing in the game unless you have a feeling that we’re in it for the really long-term and for the right reasons.”

Since announcing that it’s stepping into the game, Netflix has 14 games in development at its own studios and 35 games currently on the service. In total, Verdu said there are currently 55 “flying” games. These games include original IP-based experiences such as “Stranger Things” as well as licensed IP-based experiences such as “Spongebob Squarepants”. Netflix also develops original games.

“We expect the balance to be like 50% Netflix IP over time,” Verdu said.

The company still thinks it’s in the very early stages of its gaming venture, but it hasn’t ruled out expansion beyond mobile – but we understand it won’t be making its way to console or VR at this point.

News of the game studio launch and cloud gaming plans came as Netflix announced its third-quarter earnings, which saw it beat expectations by adding 2.41 million subscribers, bringing the total to 223.09 million. Netflix had forecast net earnings of just 1 million subscribers in the third quarter. The company also reported revenue of $7.93 in the third quarter of 2022, while analysts estimated $7.85 billion.

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

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