By Lisa Richwine and Akanksha Rana
(Reuters) -Netflix Inc said it would make a deeper dive into video games as the movie and TV streaming service projected weak subscriber growth amid growing competition and the lifting of pandemic restrictions that had kept people at home.
The company’s shares were about even at $531.10 in after-hours trading on Tuesday.
Earnings for April through June came in at $2.97 per share, below the average forecast of $3.16, according to analysts surveyed by Refinitiv.
Netflix is weathering a sharp slowdown in new customers after a boom in 2020 fueled by stay-at-home orders to curb the COVID-19 pandemic.
The company said it was in the early stages of expanding its video game offerings, which would be available to subscribers at no extra charge. It will initially focus primarily on mobile games.
“We view gaming as another new content category for us, similar to our expansion into original films, animation and unscripted TV,” the company said in its quarterly letter to shareholders.
Some analysts have said Netflix needs to find new ways to jump-start subscriptions after years of rapid expansion.
“Netflix delivered another underwhelming quarter as competition in the streaming space heats up,” said Investing.com senior analyst Jesse Cohen. “The absence of any new looming growth catalysts has been one of the main reasons for Netflix’s relatively mild performance this year.”
The company projected it would add 3.5 million customers from July through September. Wall Street had expected a forecast of 5.5 million.
For the just-ended quarter, Netflix added 1.54 million customers, reaching 209 million in total. Wall Street had expected 1.039 million new sign-ups.
A year ago, Netflix added 10.1 million subscribers in the second quarter.
This year, Netflix felt the impact of COVID-19 on TV production, which left the company with a small menu of new titles. At the same time, Walt Disney Co’s Disney+, AT&T Inc’s HBO Max and other services attracted customers, and summer blockbusters returned to movie theaters.
Netflix promises a heavier lineup in the second half of 2021, including new seasons of “You,” “Money Heist” and “The Witcher.”
(Reporting by Eva Mathews and Akanksha Rana in Bengaluru and Lisa Richwine in Los Angeles; Editing by Shounak Dasgupta and Lisa Shumaker)
