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July 15, 2021, 8:13 a.m. EDT

Game on? Netflix hires first videogame executive, signaling a new approach

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By Jon Swartz and Jeremy C. Owens

Netflix Inc. announced its first major videogame hire Wednesday, potentially signaling a move beyond its streaming-video roots.

Netflix /zigman2/quotes/202353025/composite NFLX -2.36% hired Mike Verdu as vice president of game development, poaching him from Facebook Inc. /zigman2/quotes/205064656/composite FB -2.47% , where as vice president of content for Reality Labs, he oversaw Oculus Studios as well as the teams bringing second- and third-party virtual-reality games and other apps to Oculus virtual-reality headsets. Before joining Facebook, Verdu was senior vice president of mobile for Electronic Arts Inc. /zigman2/quotes/206954087/composite EA -2.83% , responsible for mobile game studios that operated franchises like “The Sims,” “Plants vs. Zombies” and “Star Wars: Galaxy of Heroes.”

Bloomberg News, which first reported the hire , also reported that the move was a step toward offering videogames on the streaming service within the next year. Citing a single source, Bloomberg reported the videogames would appear alongside current programming, and that there are no current plans to charge extra for games. Netflix declined to comment beyond confirming Verdu’s hiring Wednesday.

Netflix has dabbled with videogames in the past, producing games with their intellectual property mostly as marketing efforts, as well as offering interactive content on its popular streaming service. As recently as 2018, when asked about an interactive offering and whether it signaled a move into gaming, a Netflix spokesperson flatly stated, “We don’t have any plans to get into gaming.”

Executives’ tones have shifted amid greater competition in the streaming-video arena — Netflix /zigman2/quotes/202353025/composite NFLX -2.36% is navigating blistering competition from media giants Walt Disney Co. /zigman2/quotes/203410047/composite DIS -2.65% , Apple Inc. /zigman2/quotes/202934861/composite AAPL -2.14% , AT&T Inc. /zigman2/quotes/203165245/composite T -1.16% , Comcast Corp. /zigman2/quotes/209472081/composite CMCSA -1.09% , and Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN -3.08% — as well as continuing mass adoption of videogames. In the company’s most recent earnings-related conference call, Chief Operating Officer Gregory Peters, who will be Verdu’s new boss, responded to a question about the potential for videogames by noting Netflix’s early licensing and interactive efforts.

“There’s no doubt that games are going to be an important form of entertainment and an important sort of modality to deepen that fan experience. So, we’re going to keep going and we’ll continue to learn and figure it out as we go,” Peters said in April.

Co-Chief Executive Reed Hastings answered a similar analyst question in July 2020 by referring to videogames as “a great and interesting area.”

“It’s got a number of aspects in terms of multiplayer that are changing, esports that are changing, PC-based gaming. So it remains a very interesting area,” he said.

Apple is among several tech companies that sell gaming options in addition to video services. But Apple charges extra for games on Arcade.

Netflix is scheduled to report its second-quarter earnings on Tuesday afternoon.

Netflix shares gained 3% in after-hours trading Wednesday following the news. After spiking along with new subscribers early in the COVID-19 pandemic, Netflix stock has suffered in recent months as subscription additions slowed down. Shares are up 1.3% so far in 2021, as the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.70% has increased 16.5%.

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