Netflix buys the next games
Netflix has made an offer to acquire Next Games, a mobile game developer, as the streaming behemoth expands its gaming presence. Next Games is the Finnish firm behind “Stranger Things,” a mobile game based on Netflix’s famous program.
Netflix intends to pay 2.10 euros ($2.33) in cash per share of Next Games, for a total value of about 65 million euros ($72 million), according to a joint announcement from the two firms.
Next Games is a publicly-traded company in Helsinki, and the transaction is an all-cash share acquisition for €2.10 per share. The gambling company’s board of directors has already authorized the transaction and is recommending it to shareholders, but it has yet to be executed. It is anticipated to be completed in the second quarter of 2022.
The agreement is part of Netflix’s larger aim to expand its gaming content as a supplement to its film portfolio, and Next Games is an ideal match. The free-to-play mobile games developer has previously created products based on some of Netflix’s most popular shows, like “Stranger Things” and “The Walking Dead,” indicating that the two firms already had a strong relationship. This agreement will solidify that, as well as increase Netflix’s profits beyond merely licensing the brands, by integrating Next Games’ IP, talent, and established company selling in-app purchases in-house. Acquisitions of smaller gaming studios are one method that businesses such as Sony’s PlayStation and Microsoft’s Xbox have found success. Tencent, the Chinese internet titan, has also been active in investing in and purchasing smaller mobile gaming companies. This is a method that Netflix is attempting to duplicate, with intellectual property and blockbuster titles being critical to gaming success.
According to Michael Verdu, Netflix’s VP of gaming, “Next Games has a seasoned management team, great track record with mobile games based on entertainment properties, and solid operational skills. We are thrilled that Next Games will be joining Netflix as a core studio in a crucial region and significant talent market, hence extending our internal game studio capabilities. While we are only getting started in gaming, I am certain that we will be able to establish a portfolio of world-class games that will thrill our members all around the world in collaboration with Next Games.”
Next Games had 120 workers by the end of 2021, and their most recent annual statistics revealed sales of €27.2 million in 2020. That year, in-game (in-app) purchases accounted for 95 percent of its sales. It will now have additional resources to reinvest in existing titles and expand its presence in Netflix’s repertoire. Teemu Huuhtanen, the CEO of Next Games, is a product of Finland’s enormous gaming environment, which has been instrumental in forging new ground in gaming throughout the years. He was an executive at Rovio, the Angry Birds publisher, prior to joining Next Games. Before that, he worked at Sulake, a pioneer in the online virtual worlds area with the establishment of Habbo Hotel.
In a statement, Huuhtanen stated, “We have had an unbroken focus on executing on our vision: to become the partner of choice for global entertainment enterprises and build authentic and long-lasting interactive entertainment based on the world’s most beloved properties.” Joining up with Netflix, the world’s largest streaming service, is a natural and exciting extension of our approach to create interactive experiences for the whole globe to enjoy. Our tight work with Netflix on Stranger Things: Puzzle Tales has already demonstrated that we can form a powerful alliance. This is a once-in-a-lifetime chance to improve the studio on all fronts while continuing our purpose together.”
Despite its scale, Netflix has only made a few acquisitions throughout the years, according to CrunchBase statistics. Next Games is its first gaming acquisition, despite the others including a visual effects firm, two interactive content creators for younger audiences, an anime comics publisher, and the Roald Dahl estate, implying that a gaming element has been there in its M&A plan all along. And, at a time when firms like Disney may continue to pull the rug out from under Netflix by stealing crucial video material to boost the choices on their streaming video services, this is one method for Netflix to cultivate its walled garden. Purchasing Next Games underlines a strategy to create or acquire exclusive content and then build out larger franchises based on it across numerous devices and experiences.
Click here to know more about Razer Keyboard.