Netflix Cozying Up To Apple By Letting It Have A Share Of Gaming-Revenue Pie, Says Mark Gurman

Users of some Apple Inc NFLX devices got a taste of Neftflix Inc NFLX gaming last week — but in a move termed “surprising” by journalist Mark Gurman, the streaming giant has cozied up to the iPhone maker.

What Happened: Gurman said that Netflix is allowing its users to sign up for subscriptions inside of its games through Apple’s in-app purchase system.

“That gives Apple up to a 30% cut. Even more surprising is that those subscriptions also work in the main Netflix video streaming app,” Gurman wrote in his weekly newsletter.

Gurman said that this is a signal that tensions between Apple and Netflix “seem to be cooling.”

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Why It Matters: The development surrounding in-app payments is notable, according to Gurman, because Netflix stopped letting its customers subscribe through Apple’s service in 2018.

“Now it’s providing a new way to sign up that lets Apple take a cut again,” said Gurman.

Netflix has yet to reinstate in-app purchases through its main app. Gurman said he does not anticipate that happening, terming the games concession a “major change.”

“I’m curious to see what this is a precursor to. Perhaps Netflix will ask Apple for an exemption to the ban on all-in-one gaming apps, letting the streaming giant provide a more streamlined offering to its customers.”

Last week, Netflix launched 5 games for iPhone and iPad users through an app available on the App Store marketplace. 

Gurman noted last week that the Tim Cook-led company was a roadblock in Netflix achieving success in gaming as it ultimately will have to transition the gaming service to a cloud-based one. Apple has previously prevented similar cloud-based services from listing on the App Store.

Price Action: On Friday, Apple shares closed nearly 1.4% higher at $149.99 in the regular session and fell almost 0.2% in the after-hours trading. On the same day, Netflix shares rose 3.81% in the regular session to $682.61 and declined 0.35% in the after-hours trading.

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