Netflix (NFLX -0.80%) has built its empire on streaming video content, but the company isn't content to stop there. While investors focus on its subscriber growth and ad revenue, Netflix is quietly laying the groundwork for new frontiers: gaming, immersive real-world venues, and live sports and other events.
These initiatives may not move the needle today, but they reveal Netflix's ambitions to be more than just a content platform. The big question for investors: Are these side bets a distraction from Netflix's core, or could they evolve into meaningful growth engines?
1. A push into gaming
Netflix's interactive experiments, such as Bandersnatch, which allowed viewers to pick the direction of the story, are fading away. Instead, the company is building an actual gaming business across four categories: party games, narrative titles, children's games, and mainstream hits.
Recent steps show Netflix is serious. It licensed blockbuster titles like Grand Theft Auto V for mobile, is developing original projects such as Thronglets -- in which "you manage an ever-growing population of the little yellow guys" -- and is testing cloud-based gaming on smart TVs, where most Netflix viewing already happens. Phones serve as controllers, lowering friction for users.
But execution remains uneven. Engagement is still limited, with only a small fraction of subscribers regularly playing games. A recent studio closure and leadership changes underscore the challenges of scaling.
For investors, the upside is clear. Gaming could strengthen engagement and open new ways to make money from online users. The risk is equally obvious. Games are expensive, and Netflix hasn't yet proven it can compete in a crowded industry.
2. Netflix House: Bringing IP into the real world
Later this year, Netflix plans to open its first Netflix House locations in Philadelphia and Dallas. These venues will feature themed dining, merchandise, virtual reality activities, and interactive experiences tied to hit franchises like Stranger Things and Squid Game.
This approach borrows from Disney's playbook, turning intellectual property into real-world touchpoints. If successful, Netflix House could deepen fan engagement and add incremental revenue beyond subscriptions.
While still niche, it demonstrates Netflix's broader goal: stretching its content into multiple formats to strengthen loyalty and brand stickiness.
3. Live events and sports
Netflix once dismissed live programming, but that stance has shifted.
The company recently signed a three-year deal with the NFL to stream Christmas Day games through 2027. It also committed $5 billion over 10 years for exclusive streaming rights to WWE's Monday Night Raw. And Netflix locked in exclusive rights to the 2027 and 2031 FIFA Women's World Cups in the U.S. and Canada.
On the entertainment side, Netflix is also leaning into variety. This year, it launched Everybody's Live with John Mulaney, a weekly live talk show airing every Wednesday at 10 p.m. ET. Add in one-off comedy specials and fan events, and the message is clear: Netflix is no longer a pure on-demand service.
Live programming offers two advantages: it attracts advertisers, and it helps reduce churn by giving subscribers reasons to tune in at specific times. The challenge, however, lies in execution. Rights are expensive, and Netflix must prove it can translate these moves into sustainable profits in a space long dominated by traditional broadcasters.
The bigger picture
Gaming, immersive venues, and live sports don't move the financial needle yet. Netflix still generates the bulk of its revenue from streaming subscriptions and is only beginning to monetize its ad-supported tier, where users pay less and see ads.
But these initiatives serve two crucial purposes:
- Reduce reliance on shows and films.
- Add future revenue streams.
What does it mean for investors?
For investors, the key is patience. Netflix is planting seeds, not harvesting profits. Some projects may fail, but even one breakout success could expand its long-term growth runway.
Netflix's quiet moves beyond streaming show a company unwilling to stand still. Gaming, live events, and real-world venues all carry execution risks, but they also highlight Netflix's ambition to evolve into a broader entertainment platform.
These bets don't change the investment thesis today, but they give Netflix long-term optionality. It's a stock that growth investors should track closely.
