Month: July 2021

So far, Netflix has published a smattering of original games, such as a “Stranger Things” video game adaptation of its hit show. However, these efforts were not quite developed in-house, with Netflix turning to outside studios to do much of the development. Furthermore, the company’s move into the gaming world has extended to experiments such as the 2018 interactive film “Black Mirror: Bandersnatch,” along with adaptions of popular games with shows like “The Witcher” and “Castlevania.” 

Earlier this month (July 14), Netflix doubled down on its commitment to gaming by hiring Mike Verdu to head up its game-development department. Formerly vp of content at Facebook Reality Lab, where he oversaw the social network’s foray into virtual and augmented reality, Verdu reports to chief operating officer Greg Peters. Before joining Facebook, Verdu also worked as a producer and executive for companies such as EA, Zynga, TapZen and Kabam. “Mike is an exceptional leader,” said Colleen McCreary, CPO of Credit Karma and a former coworker of Verdu at EA and Zynga.

Verdu was unavailable to be interviewed for this story and Netflix declined to participate.

Hiring a longtime gaming executive with game-developer experience is a logical move for Netflix, whose long-term goals transcend streaming and non-interactive content. “They routinely point to not Disney+, or Hulu or whoever as their competitor — they’re pointing to ‘Fortnite,’ they’re pointing to gaming because they know consumer attention is a zero-sum game, and gaming is starting to take on a lot of that attention,” said Jonathan Springfield, vp of global business marketing, measurement and insights at Activision Blizzard Media. “So they want to make sure that if they’re primarily brokering their business on consumer attention, that they’re in that mix — and again, that attention is now increasingly moving towards gaming.”

Verdu’s experiences at EA, in particular, make him well-prepared to develop original games for Netflix. According to his LinkedIn page, he spent two stints at the company: first from 2002–2009, as the manager and creative leader behind games such as “Lord of the Rings: The Battle for Middle-Earth II,” and then from 2017–2018, as the head of EA Mobile. 

“He’s going to create a stellar team for them,” said Gary Cox, senior art director at mobile game studio MobilityWare. Cox, a former art director for EA, worked closely with Verdu on titles such as “Lord of the Rings.” “When we worked together, he showed great care for everyone on the team. We all had tight deadlines, had a very high-quality bar to hit — and Mike was there side-by-side with us.”

In addition to Verdu’s background as a game developer, his mobile gaming experience is a boon for Netflix, whose push into gaming is motivated by the relative strength of gaming in the mobile attention economy. Past mobile game efforts from Netflix, such as 2017’s “Stranger Things: The Game,” have been released widely on iOS and Android app stores.

“Someone like myself, who’s grown up doing gaming, I don’t even have cable television or linear television anymore. If I’m consuming television, it’s OTT, it’s through Netflix,” Springfield said. “So, already, my second screen is different. If I’m watching Netflix, secondarily, I’m not on social media — I’m playing a game. So we have the same type of behavior [as non-gaming consumers] in terms of second screening, but a new manifestation.”

Capturing a slice of the gaming market will be a difficult task for Netflix, as tech giants such as Google and Amazon have demonstrated in their own shaky efforts to enter the space. Though Netflix boasts strong brand recognition, both in the gaming world and in general, its thin backlist of original games is unlikely to entice core gamers. Fortunately for the streaming company, it owns a wealth of pre-existing intellectual properties that are ripe for game adaptations, including “The Umbrella Academy” and “Big Mouth.”

Regardless of the difficulty of his assignment, Verdu brings an unprecedented level of gaming experience to Netflix. Whether through the development of quality PC games, mobile titles or VR/AR technology, his skills are an asset to the company as it dives deeper into the gaming industry.

“He’s one of a few people in the games industry who can probably lead this kind of opportunity successfully,” McCreary said.

“We expect our growth to be principally organic because 40 percent of our services will be high-growth digital,” said Penn in an interview with Digiday. “That supplants the old model, of 90 percent traditional advertising at MDC. By fundamentally changing the mix, we’re going to change the growth pattern and go after much stronger organic growth and reach up for bigger client relationships.”

How will that astronomical number be reached? Penn said it’s done mainly by growing existing clients, citing Disney, Procter & Gamble and Google as among the biggest companies they serve. “We continue to have great strengths for tech clients,” he added. “But we do super well with new economy clients. What we’re trying to do here is to cement larger relationships.”

In a missive sent out Monday morning, Penn spelled out a four-pronged approach to landing new clients as well: digital transformation, including e-commerce, platform building, online advocacy, influencer marketing, and performance marketing; breaking down what he dubbed “the artificial divide” between brand marketing and performance media; building SaaS products “that solve for key gaps in the marketing ecosystem;” based on our industry know-how and engineering heft;” and global integrated solutions to compete with other holding companies.

The two mini-holding companies have already had some success with landing big accounts. In 2019 MDC shop Doner was able to secure some of Johnson & Johnson’s creative business, and just this past April landed J&J Baby business with Stagwell sibling Code and Theory.

But there remain issues to overcome, one reason the MDC name is being retired upon completion of the merger. For one, as Penn admitted, the MDC model for years has been based on traditional methods of servicing clients. “The MDC agencies themselves have great reputations, but the central core didn’t,” he said.

For now, no major merging of individual assets will be forced together, said Penn. “There’s $30 million of synergies [to be realized], but we’ve synergized by reducing back-office expenses, not through [the] smashing of assets,” he explained. “You’re not going to see that kind of dislocation — that’s not in the plans.”