The Next Big Thing For Netflix: Adding Video Games To Content Arsenal

Tired of hearing about ever-rising video gaming business? Sit back and get ready to be worn out.

Video-gaming usage and revenue keeps soaring. And it’s not just because of the pandemic. It's been a while. And TV and movie companies noticed.

Take a hint. Netflix might know the right road to take -- not only saying it was getting into the video-game content business, but buying a video game studio, Night School Studio.

One might believe the future of TV content will have a wingman of sorts: Video games.

Michael Pachter, managing director of Wedbush Securities, said on CNBC he believes the video-gaming companies are set up to grow exponentially.

Could Netflix move spur other companies to move in on video-game companies? Well, for one, this is not exactly foreign territory for some major media companies.



Walt Disney and Warner Bros. have been in the game with mixed results. Disney shut down its game development business in 2016, transitioning exclusively to a licensing model. Pachter believes Warner Bros. Interactive has the better thing going.

What’s the lure? Younger demographics.

He believes there is money to be made for companies like EA Sports, Activision, Take Two, and all the rest. “They are set up in the 2020s, like health care was set up in the 1960s with Medicare when we had aging population.”

Still, he questions Netflix buying Night School Studio. He says this was like “one of the broadcast networks buying the badminton channel.”

We should have figured this was coming. Years ago, Reed Hastings, CEO of Netflix, said one of his biggest competitors wasn’t the broadcast networks. It was Fortnite.

TV and movie companies are always looking for new IP to own, which is why Disney owns Marvel and Lucasfilm, and why Warner Bros. owns DC Comics. “Netflix would like to be there one day,” says Pachter.

But not everything works. In fact, most don’t. Few pieces of original video-game centric content, like “Resident Evil” and “Lara Croft,” became successful movie franchises.

No matter. Put on your headset and start playing.

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