Netflix Expands Into Video Game Development

Netflix (NASDAQ:NFLX) is expanding into video games.

Making its first big move beyond television shows and films, the streaming giant is planning an expansion into video games and has hired a former Electronic Arts (NASDAQ:EA) and Facebook (NASDAQ:FB) executive to lead its effort into gamming.

Mike Verdu will join Netflix as Vice President of Game Development, reporting to Chief Operating Officer Greg Peters, the company said in a news release. Verdu was previously Facebook’s vice president in charge of bringing games and other content to Oculus virtual-reality headsets.

Netflix plans to offer video games on its streaming platform within the next year. The games will appear on the platform as a new programming genre, similar to what Netflix did with documentaries and stand-up comedy specials.

Netflix has been seeking ways to keep growing, especially in more saturated markets such as the U.S. That’s included building out its kids’ programming, opening an online shop to sell merchandise, and tapping Steven Spielberg to bring more prestigious movies to its lineup.

Netflix remains ahead of streaming rivals such as Disney+ (NYSE:DIS) and HBO Max, but it added fewer subscribers than expected in the most recent quarter.

In Mike Verdu, the company has an executive who worked on popular mobile games at Electronic Arts, including titles in the Sims, Plants vs. Zombies and Star Wars franchises.

Video games give Netflix another way to lure new customers and also offer something none of its direct competitors currently provides. The move may also make it easier for Netflix to justify price increases in coming years.

Netflix shares gained 3.3% to $566 U.S. after the news was announced. The stock is up 1.3% year-to-date.