Netflix buys Next Games for approximately $72 million

Netflix has made another acquisition in its quest to build out a cloud gaming service within its broader streaming video platform.

The company today said it will buy Next Games, a Finnish video game studio behind titles like “Stranger Things: Puzzle Tales,” for approximately €65 million (or about $72 million). The transaction is expected to close in the second quarter of 2022.

Next Games had approximately 120 employees at the end of 2021 and reported sales of approximately €27.2 million in 2020, with 95% of revenues generated from in-game purchases.

"Next Games has a seasoned management team, strong track record with mobile games based on entertainment franchises, and solid operational capabilities," said Michael Verdu, vice president of games at Netflix, in a statement. "We are excited for Next Games to join Netflix as a core studio in a strategic region and key talent market, expanding our internal game studio capabilities. While we're just getting started in games, I am confident that together with Next Games we will be able to build a portfolio of world class games that will delight our members around the world."

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"We have had an unwavering focus to execute on our vision: to become the partner of choice for global entertainment businesses and craft authentic and long-lasting interactive entertainment based on the world's most beloved franchises," said Next Games CEO Teemu Huuhtanen in a statement. "Joining forces with the world's largest streaming service, Netflix, presents an opportunity for a logical and exciting continuation of our strategy to craft interactive experiences for the world to enjoy. Our close collaboration with Netflix on ‘Stranger Things: Puzzle Tales’ has already proven that together we create a strong partnership.”

Last year, Netflix acquired Night School, the gaming studio behind “Oxenfree,” and hired Verdu, a former Facebook and Electronic Arts executive.

Netflix COO Greg Peters described his company’s gaming plans as an extension of Netflix’s core entertainment offering.

“So just as we've continuously expanded the nature of our offering by adding new genres, unscripted, film, local language programming, animation, on and on, we think we have an opportunity to add games to that offering and deliver more entertainment value to our members through that,” he said. “And similar to what you've seen in that trajectory when we've added a new genre, that's what we expect will happen with games. So, this is going to be -- it's a multiyear effort. We're going to start relatively small. We'll learn. We'll grow. We'll refocus our investment based on what we see as working, and we'll just continuously improve based on what our members are telling us is working.”