Netflix acquires its first ever game studio, Night School Studio

Over the summer, Netflix confirmed its intent to enter the games business and hired EA veteran Mike Verdu to lead game development. For years, Netflix boss Reed Hastings has viewed gaming as one of Netflix’s biggest threats, but also one of its top opportunities. While Netflix growth has tapered, gaming is a multi-billion-dollar business that’s showing no signs of slowing down. The streaming giant took its first major step into the world of games at the end of September, acquiring Night School Studio, which created the indie adventure hit Oxenfree in 2016.

On the surface, it may seem like an unusual acquisition, but the team at Night School is composed of veterans from Disney and Telltale Games (The Walking Dead) who have a focus on player-driven narrative. Netflix had already been dipping its toes into this genre with its interactive programming like Bandersnatch. “Our explorations in narrative gameplay and Netflix’s track record of supporting diverse storytellers was such a natural pairing. It felt like both teams came to this conclusion instinctively,” said Night School Studio’s Sean Krankel.

Interpret’s New Media Measure® shows that content like Oxenfree is a natural fit for the Netflix base as well, since action-adventure, puzzle, and casual titles are among the top genres played by subscribers. Night School is currently working on Oxenfree II and is also developing “new game worlds” for Netflix.

It’s likely that this is just the first of several upcoming acquisitions in the games space for Netflix as it looks to bolster its development pipeline. In the company’s official post, Verdu noted that Netflix intends to “continue working with developers around the world and hiring the best talent in the industry to deliver a great collection of exclusive games designed for every kind of gamer and any level of play.” He also reiterated that gaming would be included for Netflix subscribers at no additional cost, with no ads or in-game microtransactions.

The long-term games strategy for Netflix hasn’t yet come into view. Initial reports suggested that Netflix would focus on mobile titles, but job listings have since pointed to a “long-term strategy and vision for cloud games on Netflix,” which increases the likelihood that Netflix will integrate gaming into its main app found across smart TVs and streaming devices. If the company pursues that path, it’ll be going up against giants like Microsoft, Google, and Amazon.