An analyst believes Netflix could be trying to get acquired by Microsoft. Netflix has been facing some financial trouble as it had lost subscribers for the first time since 2011. Netflix also confirmed that it expects to lose millions of additional subscribers in the coming months, something that caused concern for investors after Netflix religiously dominated the stock market for years.
Microsoft would be supporting Netflix’s new ad-supported subscription model with technology and an ad marketplace. This will allow Netflix to offer a subscription at a lower cost and increase subscribers. Needham senior analyst Laura Martin stated that no other company that Netflix could have partnered with would be able to complete the $100 billion acquisition necessary for the company for either financial or regulatory reasons, but Microsoft could.
“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.”
Firstly, Microsoft gains an in-house film division allowing for adaptations of its various video game IPs like The Elder Scrolls, Gears of War, and soon-to-be Call of Duty thanks to the Activision deal. Secondly, it also allows possibly another avenue for Xbox’s game streaming and Game Pass model by introducing it to Netflix’s game division. So, it makes sense for people to speculate a possible acquisition.