Why This Expert Sees Apple As A Major Roadblock In Netflix's Gaming Foray

Technology journalist Mark Gurman sees a roadblock in streaming giant Netflix Inc NFLX achieving success in its video gaming foray — Apple Inc AAPL. 

What Happened: The expert on the Tim Cook-led company noted that Netflix rolled out its video gaming service on Alphabet Inc GOOGL GOOG subsidiary Google’s Android alone and that too not as an “all-in-one” offering.

“While you can load up a Games tab in the main Netflix app, the games are actually installed individually via the Google Play Store and operate as stand-alone apps,” the journalist noted.

Gurman said that the “ideal approach” would be to let users find, download, and access content within the Netflix app, however, that would mean taking a cloud-based approach.

“I expect Netflix to eventually upgrade its gaming service by turning it into a cloud-first platform.”

See Also: How To Buy Netflix (NFLX) Stock

Why It Matters: Netflix — should it launch a cloud-based gaming service in the form of an iOS app — would hit a wall in the shape of Apple’s App Store rules, said Gurman.

Gurman pointed out discoveries by developer Steve Moser which indicate that Netflix would release its games individually on the App Store and let users launch the games through its own app.

“To be a true all-in-one service on iOS, Netflix will have to make its move to the cloud—and Apple will need to change its rules or grant Netflix an exemption,” wrote Gurman.

“That leaves the ultimate success of Netflix’s service in the hands of Apple, a longtime partner but also a growing rival.”

Apple previously prevented Microsoft Inc’s MSFT game streaming service xCloud, Google’s Stadia, and Facebook Inc’s FB service from taking a cloud-based gaming approach on the App Store.

Price Action: On Friday, Netflix shares closed almost 3.4% lower at $645.72 in the regular session. On the same day, Apple shares closed almost 0.4% higher at $151.28.

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