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Netflix to open video game studio in Helsinki, Finland

(Washington Post illustration; Netflix; iStock)

Netflix is starting a gaming studio in Helsinki as the next step in establishing its presence in the video game industry. This is a first for the streaming giant, which had previously bought up three other studios to make mobile games and hired executives from notable gaming companies.

The in-house games studio will be led by Marko Lastikka, a former executive at Zynga and Electronic Arts. Lastikka most recently worked at Zynga’s Helsinki branch on the Farmville franchise.

Netflix said it chose Helsinki because of its proximity to other gaming talent, such as Next Games, a Finnish studio it acquired earlier this year, which makes titles like “Stranger Things: Puzzle Tales.”

“The Helsinki game industry is in many ways a ‘mobile first’ game industry, led by companies like Rovio and Supercell,” said Laine Nooney, New York University assistant professor and gaming historian. “This makes sense when you consider the outsize significance the Finnish company Nokia played at the dawn of the mobile phone industry. The popular game ‘Snake’ came preloaded on Nokia mobile phones starting in the late 1990s and is widely regarded as one of the first mobile phone games.”

Video games have grown more prominent on the streaming service, whether it’s with a TV-show-turned-game, like “Stranger Things” and “Stranger Things: 1984,” or a video-game-turned-TV-show like the “Cyberpunk: Edgerunners” animated series based on “Cyberpunk 2077.” Netflix has also delved into third-party publishing and original games, though the timeline for releasing new in-house titles is much further out.

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“We started really modestly late last year. There were very, very few games. And we were pretty clear with our members that this was going to be a long journey,” said Mike Verdu, Netflix’s vice president of games, of the company’s approach to gaming in a September interview with The Washington Post. “The pace at which we’re rolling out games is definitely increasing.”

“Netflix doesn’t take a lot of big shots like this, but when they do, they back them, and they’re committed to them,” Verdu added.

Netflix plans to add 50 games to its platform by the end of the year. The company declined to share adoption numbers for its current games. The platform has said it would not include advertisements in its games, and that the titles will be available to Netflix streaming subscribers.

While the streaming service has mostly released mobile games under its brand since its launch last year, it’s been vague about whether it could delve into console or PC titles. The latest announcement simply says it plans to build a “world-class games studio,” with no specification of platform.

Netflix’s games live within its mobile streaming app and use an inelegant workaround for Apple’s rules prohibiting the distribution of app stores within its own app store: Users can click into a game on the Netflix app, where they will be directed back into the App Store to download the game. If users already own the titles, tapping on the game icons within the Netflix app will launch those games.

As Netflix blames password sharing and high competition from platforms like Disney Plus and Hulu, it’s eyeing gaming as the next big opportunity. While the company is focused on creating more hit shows like “Squid Game” and “Bridgerton,” it’s also buying gaming studios with a future-facing blueprint.

Analysts note that Netflix’s moves into the games industry come as the streamer lost nearly 1 million subscriptions.

“Netflix is slowly making good on its promise to develop a pipeline of 50 games by acquiring and hiring from established firms and in premiere locations,” said Joost van Dreunen, a lecturer on the business of games at the New York University Stern School of Business. “Soon it will face the challenge of properly managing a growing portfolio of concurrent projects while its primary business of streaming video is taking a financial hit. Developing its own games division won’t save Netflix but it can drown it.”