Netflix Gaming Retreat Sends Shares to Seven-Month Low
Netflix (NFLX) shares dipped marginally after divesting Spry Fox, the studio behind 'Cozy Grove' and 'Alphabear.' The sale fueled speculation about the streaming giant's retreat from original game development—a segment it had aggressively expanded since 2021. Though the stock slipped 0.5%, it remains up 16% year-to-date, outperforming most entertainment peers.
Analysts note the MOVE reflects a strategic pivot toward licensed IP and social games rather than in-house productions. 'The calculus changed,' says Wedbush's Michael Pachter. 'Netflix realized third-party hits drive more engagement than costly originals.' The company retains six other gaming studios.
Investors remain wary of Netflix's $14 billion debt load amid content spending. Short interest climbed to 2.3% of float this week. Still, bulls highlight gaming as a long-term differentiator against Disney+ and Max—especially with 70 million global users trying its games.
