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Netflix eyes more game streaming with this €65m deal for Finnish studio

Next Games runs on an Azure stack. Acquisition boosts Netflix' game ambitions.

Netflix has agreed to buy Finland's Next Games for €65 million (£54 million) as it ramps up its game streaming efforts  amid increasingly hot video and content streaming competition globally.

Next Games is a mobile games specialist with ~120 employees. Founded in 2013, it makes games based on entertainment franchises like The Walking Dead and Stranger Things.

It had already partnered with Netflix to serve the latter game through its platform. (Next Games said in December 2021 that it had signed a co-development agreement on a mobile game with a "significant, global media company" worth $16.5 million but not named Netflix at the time. Its CEO today hower acknowledged that it had seen a "close collaboration with Netflix... [that had] proven that together we create a strong partnership.")

A 2020 case study suggests that Next Games' technology stack (from development to real-time gameplay) relies heavily on Microsoft Azure resources such as Azure Cosmos DB and Azure Service Fabric -- Microsoft's container orchestrator for deploying and managing microservices across a cluster of machines.

"Next Games has a seasoned management team, strong track record with mobile games based on entertainment franchises, and solid operational capabilities," said Michael Verdu, VP, Games, Netflix.

"We are excited for Next Games to join Netflix as a core studio in a strategic region and key talent market, expanding our internal game studio capabilities. While we're just getting started in games, I am confident that together with Next Games we will be able to build a portfolio of world class games..."

Next Games is behind the Walking Dead mobile game.

2021 Netflix launched a mobile game streaming service and now offers 10 games.

Asked on a January 2022 earnings call “how much” Netflix’s leaders want to push harder into more interactive experiences, co-CEO Ted Sarandos said: “We have to be differentially great at it.

There’s no point of just being in it. That’s very dilutive of the whole proposition”, he said on an earnings call. “When [our] mobile gaming is world-leading… and we are at [where we are at with] film today, two of the top 10 for our gaming, then you should ask, ‘OK, what’s next’. Because we’re definitely ‘crawl, walk, run’.”

He spoke as Netflix’s engineers revealed that they are working on an “auto-diagnosis and remediation system” called Pensive for what they described as one of the “most complex data platforms in the cloud on which our data scientists and engineers run batch and streaming workloads” – noting that as Netflix continues to build its gaming proposition the pressure on its batch workflows and real-time data pipelines is increasing rapidly.

“The data platform is built on top of several distributed systems, and due to the inherent nature of these systems, it is inevitable that these workloads run into failures periodically” engineers Vikram Srivastava and Marcelo Mayworm noted in a January 14 blog. Their new tool "Pensive" supports auto-diagnosis and remediation of failures across these workloads. For batch workflows, for example, the tool collects logs for failed jobs and then extracts the stack traces, relying on a regular expression based rules engine that has been curated over time.

"The rules encode information about whether an error is due to a platform issue or a user bug and whether the error is transient or not.” (If ransient, the scheduler retries the step.) The company is currently feeding unknown errors into a Machine Learning process that can propose new regular expressions for commonly occurring errors, the two said, in their blog admitting that this is a work in progress: “We take the proposals to platform component owners to then come up with the classification of the error source and whether it is of transitory nature.

"In the future, we are looking to automate this process.”

It was not immediately clear what the long-term plans for Next Games' gaming infrastructure were as Netflix builds and runs the majority of its own tools, which are underpinned primarily by AWS infrastructure. The investment looks set to be good news for the Finnish company however as it continues to build its stable of games.

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