Can Gaming Become the Next Revenue Pillar for Netflix Stock?

Netflix NFLX offers games to keep its audience engaged. The streaming giant serves more than 300 million paid households, offering ample engagement opportunities through its “no-cost” gaming titles. Netflix focuses on offering immersive narrative games based on its content, with the most recent example being the launch of Squid Game: Unleashed, which came alongside the release of Squid Game Season 3. Even non-members can play the game — a strategic move to attract new users to Netflix’s platform.The company is focusing on mainstream titles like Grand Theft Auto and expanding into kids' games with the launch of the Peppa Pig game. Moreover, socially engaging party games represent a category that Netflix plans to penetrate over the long term.Netflix plans to invest in game development, but in a measured way. Over the long term, the company expects games to generate roughly $140 billion in consumer spending, excluding ad revenues.Increasing engagement trends driven by a more diverse entertainment offering and a strong games portfolio bodes well for Netflix’s prospects. For the second quarter of 2025, NFLX forecasts revenues to increase 15.4% (+17% F/X neutral) to $11.035 billion. Netflix continues to forecast 2025 revenues of $43.5-$44.5 billion, which assumes healthy member growth, higher subscription pricing and a rough doubling of ad revenues.Netflix Faces Stiff Competition in GamingNetflix faces stiff competition from players like Take-Two Interactive TTWO and Electronic Arts EA. Take Two Interactive benefits from a solid portfolio that includes NBA 2K25/2K24, Grand Theft Auto Online, Toon Blast, Empires & Puzzles, Red Dead Redemption 2 and Words With Friends. Take-Two Interactive's future release slate holds significant growth potential. The announced lineup includes major titles spanning multiple genres. The titles include Mafia: The Old Country, Borderlands 4, NBA 2K26, WWE 2K26, CSR 3, Civilization VII for Switch, and the immensely anticipated Grand Theft Auto VI, scheduled for May 2026.Electronic Arts expects continued growth in live services, as well as the launch of new non-annual titles in fiscal 2027. Its popularity is primarily driven by its well-known franchises, which will continue to fuel the top line. EA SPORTS titles, along with Madden NFL, The Sims and Apex Legends, are some of its biggest franchises. Electronic Arts is positioned for strong growth with two major franchise launches in fiscal year 2026 — Battlefield and Skate.NFLX’s Share Price Performance, Valuation and EstimatesNFLX shares have appreciated 45.7% year to date, outperforming both - Zacks Consumer Discretionary sector’s return of 11.8%, as well as the Zacks Broadcast Radio and Television industry’s 37.7%.NFLX Stock's Performance Image Source: Zacks Investment Research From a valuation standpoint, Netflix trades at a premium with a forward 12-month P/S ratio of 12.11X compared with the broader sector’s  2.32X. NFLX has a Value Score of D.NFLX Valuation Image Source: Zacks Investment Research The Zacks Consensus Estimate for NFLX’s 2025 earnings is pegged at $25.32 per share, unchanged over the past 60 days. This indicates a 27.69% increase over 2024’s reported figure.Netflix, Inc. Price and Consensus Netflix, Inc. price-consensus-chart | Netflix, Inc. QuoteNetflix currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Netflix, Inc. (NFLX): Free Stock Analysis Report Take-Two Interactive Software, Inc. (TTWO): Free Stock Analysis Report Electronic Arts Inc. (EA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks