Can Gaming Become the Next Revenue Pillar for Netflix Stock?

Netflix's NFLX push into gaming took its highest-profile turn yet on Aug. 27, when the company aired an exclusive extended first look at Grand Theft Auto VI, giving subscribers a six-hour head start on 27 minutes of new footage before Rockstar Games released it on YouTube and its own channels. The tie-up, described by Netflix as a first-of-its-kind partnership, arrives ahead of GTA VI's Nov. 19 launch on PlayStation 5 and Xbox Series X/S and follows Netflix's earlier addition of GTA: The Trilogy to its mobile game library. The collaboration extends Netflix's strategy of aligning itself with major gaming cultural moments rather than only producing its own titles.

That strategy has shown early traction elsewhere in the games unit. In its second-quarter 2026 shareholder letter, Netflix said its cloud-based TV games notched their two most successful debuts to date in June with FIFA World Cup: Launch Edition and Unhinged. Netflix Playground, the standalone app for kids' games, launched in April, has seen daily players triple since launch, and kids' mobile game engagement is up 600% year over year, though from a small base. Netflix has organized its games effort around four categories — narrative, party and puzzle, mainstream, and kids — and continues to frame the segment as an engagement driver rather than a standalone revenue source.

On the financial side, Netflix reported second-quarter revenues of $12.6 billion, up 13% year over year, with an operating margin of 33.4%. The company narrowed its full-year 2026 revenue forecast to $51.0-$51.4 billion and reiterated a 31.5% operating margin target, with growth attributed primarily to membership gains, pricing and advertising rather than games. View hours grew 2% in the first half of 2026, and Netflix noted gameplay hours are not included in that figure. Games remain unbroken out in Netflix's financial disclosures, leaving their direct revenue contribution unquantified for now.

Gaming Peers: Take-Two Interactive and Roblox

Unlike Netflix, Take-Two Interactive TTWO and Roblox RBLX already generate the bulk of their revenue directly from gaming. Take-Two, the publisher behind GTA VI through its Rockstar Games label, reported net bookings of roughly $1.5 billion in its most recent quarter, with GTA VI positioned as its primary growth catalyst. Roblox, meanwhile, continues to scale bookings and daily active users through its user-generated content platform and virtual economy. Both Take-Two and Roblox operate gaming as a core, monetized business line, a structural contrast to Netflix, where games remain an engagement-linked feature rather than a disclosed revenue segment.

NFLX’s Price Performance, Valuation & Estimates

Shares of Netflix have plunged 12.8% year to date, underperforming the Zacks Broadcast Radio and Television industry and the Zacks Consumer Discretionary sector’s decline of 9.4% and 6.7%, respectively.

NFLX’s YTD Share Price Performance

Image Source: Zacks Investment Research

From a valuation standpoint, Netflix appears overvalued, trading at a forward 12-month price-to-sales ratio of 6.17X, higher than the industry’s 3.17X. NFLX carries a Value Score of D.

NFLX’s Valuation

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for NFLX’s 2026 earnings is pegged at $3.59 per share, unchanged over the past 30 days. This indicates a 41.9% increase from the previous year.

NFLX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research