After struggling to retain its top dog position in the streaming wars, Netflix has plans to open its own video games studio.

The new studio will be based in Helsinki, Finland. Marko Lastikka, former Zynga and electronic arts executive, will be the new director for the gaming studio.

While it’s still early days, some gaming experts believe Netflix would eventually delve deeper into gaming and that the studio could help it gain a top position the video games war.

“Netflix’s push into gaming isn’t a huge surprise; the business has needed to diversify its offering and reach a wider audience given the stiff competition that entertainment streaming has seen,” Max Daniels, head of gaming at forensic consultancy firm Field Associates, tells Verdict.

Dawn Paine CEO and co-counder of creative agency Aurora, tells Verdict that the games studio announcement is clearly the next step in Netflix’s universe building strategy.

“[It is] one which morphs them beyond streaming TV and film and into a converged entertainment ecosystem,” Paine says. “And of course, it’s a smart move to further leverage their incredible user base and build proprietary IP.”

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The video games studio is not Netflix’s first gaming venture. It already has mobile games and TV shows based on popular video games such as The Witcher.

“[It] drove users to the service in the early days, but Netflix now needs a killer title to expand its appeal,” Rupantar Guha, analyst at research firm GlobalData, tells Verdict.

“Building an in-house video game studio indicates that Netflix intends to create games beyond its original content. Netflix must also explore developing esports titles and branded content to grow users and revenues in the long term.”

Netflix banks on video gaming after streaming wars setbacks

Video games initiative may be Netflix’s saving grace after its dramatic fall in subscribers during the streaming wars.

“The move reflects Netflix’s attempt to become an entertainment all-rounder in the face of its recent subscriber slump,” Francesca Gregory, analyst at GlobalData, tells Verdict. “The platform hopes the diversification will allow it to reach new audiences, but as the cost-of-living crisis bites, it may still not be enough to boost its net customer additions.”

GlobalData is the parent company of Verdict and its sister publications.