Netflix confirmed Tuesday that it'll expand into video games, starting with ad-free games for mobile devices like phones and tablets that it'll offer on its existing service at no added cost to subscribers. In what represents the biggest expansion into a new kind of entertainment since it started streaming in 2007 and released its first original show in 2012, Netflix sketched out broad ambitions for gaming generally, indicating that it ultimately envisions pursuing console games too.
Mobile games will be the primary focus, but executives said Tuesday that all the devices that Netflix already supports are candidates for its games. That would include gaming consoles PlayStation and Xbox, as well as desktop computers and connected TVs.
"There's a rich opportunity to continue to deliver and advance the technical capability to improve the quality of game experiences we can deliver across the range of devices," Greg Peters, Netflix's chief operating and product officer, said Tuesday during a discussion of the company's second-quarter earnings.
Tuesday, Netflix didn't specify timing of its gaming initiative, noting only that it was in the "early stages" and that it was a "multiyear effort." A report last week said Netflix planned to expand into games within the next year.
The company said it'll experiment making games based on existing Netflix franchises so fandoms dive deeper into their favorite stories and characters, but it'll try standalone games that are wholly original, potentially spawning spin-off shows or movies themselves. It'll explore making games based on media existing outside Netflix's galaxy -- imagine a Netflix game based on a book series or comic.
Netflix was clear about one thing that gaming won't be, at least not at first: a new way to charge you money.
"We're a one-product company," co-CEO Reed Hastings said, and that product is an all-in-one subscription.
Netflix games won't have ads, they won't include in-game purchases, and you won't have to buy individual titles. Netflix games will be part of your overall subscription, in the same way that horror movies, reality TV shows and award-winning drama series are all part of the same Netflix membership.
Last week, Bloomberg reported that Netflix was planning an expansion into video games on its service at no extra cost within the next year. At the time, Netflix confirmed it had hired Mike Verdu, who previously had stints at Oculus, Electronic Arts and Zynga, as vice president of games development, but declined to comment further.
The move into gaming widens Netflix from its bedrock business of TV shows and movies as the world's biggest subscription video service. It isn't alone in the gaming-expansion area. Amazon has invested in Luna, its cloud gaming service, and has its own gaming studio, while Google has put money into its own Stadia game-streaming service.
Netflix had hinted recently that it was interested in stepping up its pursuit of gaming. The company has flirted with games before, through its interactive, choose-your-own-adventure-style programming like Bandersnatch and through some licensing and merchandising partnerships. But in April, Peters signaled that Netflix's interest in gaming may be advancing.
"We're trying to figure out what are all these different ways ... we can deepen that fandom, and certainly games are a really interesting component of that," Peters said at the time. "There's no doubt that games are going to be an important form of entertainment and an important modality to deepen that fan experience."
As Netflix has grown, it's long pointed out that its competition extends beyond the traditional TV and movie companies that go head-to-head with it. The company has repeatedly called out gaming phenoms like Fortnite, as well as user-generated-video powerhouse YouTube, as some of its toughest competition, for the massive collection of entertainment hours they command worldwide.
"We think the time is right to learn more about how our members value games," the company said Tuesday.
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