According to an analyst, Netflix may be doing some groundwork in preparation for a potential acquisition deal with Microsoft.
In light of the company’s recent financial troubles where the streaming platform suffered a record-breaking loss of subscribers, the first of its kind since 2011, the speculation doesn’t seem very far-fetched. Not to mention the fact that Netflix even now foresees the loss of millions of more subscribers in the months to come, to the point of making the media company’s investors nervous.
The idea itself is the result of a recent discussion between Needham senior analyst Laura Martin and Yahoo, where Martin strongly suggested that Netflix choosing Microsoft as the platform to implement its new ad-supported subscription plan conceals a hidden agenda.
The ultimate goal of the new ad-supported model is to attract new subscribers with significantly lesser subscription fees. Essentially, Netflix has now strategically positioned itself as an amicable partner to Microsoft with the new deal, and this could potentially lead to an acquisition.
Laura Martin went on to conclude that out of all companies that partnered with Netflix, Microsoft is the one and only company that has both the financial, as well as regulatory backing necessary for a potential $100 billion acquisition deal.
“It could be that Netflix is looking for an exit,” said Martin. “Netflix is trying to get closer to Microsoft in hopes that, after Microsoft digests its Activision acquisition, it turns and buys Netflix next,” she added.
Whether or not this speculation will translate into reality in the future remains to be seen but we must admit that a potential acquisition by Microsoft sounds both interesting and plausible.
Firstly, Netflix is possibly the only single corporate entity in the world with the largest number of very recent video-game-related adaptations. Second, the Netflix Gaming division already exists.
Since Netflix already has a string of video-game adaptations to its credit and many more in the works, Microsoft would be acquiring an in-house production house that would allow the tech giant to make long-awaited video game IP adaptations.
Moreover, an acquisition would mean Netflix’s game division would open more doors to make Xbox’s game streaming and Game Pass subscription even better.