The Mineral Resources Limited (ASX: MIN) share price has edged higher on Friday after the company announced its June quarter and full-year FY21 activities report.

Shares in the diversified mining company briefly hit an intraday all-time high of $64.25.

At the time of writing, the Mineral Resources share price is up 0.52% to $63.75.

Quarterly highlights

Record iron ore performance

Mineral Resources reported a record 5.2 million wet metric tonnes (wmt) of iron ore shipments in the June quarter, a quarter-on-quarter (QoQ) increase of 27%.

Overall shipments for FY21 increased by 23% to a record 17.3 million wmt. This is slightly below its revised full-year guidance of 17.4 million to 18 million wmt.

The issues dragging shipment expectations down were largely out of the company’s control. Its final three planned shipments were delayed due to port congestion.

In terms of iron ore production, the company delivered 5.2 million wmt in the June quarter, up 6% QoQ.

Overall FY21 production was a record 19.5 million wmt, a 38% increase compared to a year ago.

The company achieved an average realised iron ore price of US$178 per dry metric tonne (dmt) for the quarter, a 23% increase QoQ.

Lithium production ramping up

The Mt Marion project produced 144,024 dmt of lithium spodumene in the June quarter, a 5% increase QoQ.

Pleasingly, FY21 production came in at 484,984 dmt, a 34% increase compared to a year ago. This is also above the company’s guidance of 450,000 to 475,000 dmt.

Mineral Resources also operates a 40:60 joint venture for the Wodgina Lithium project.

The company cites this asset as “one of the largest known hard rock lithium deposits in the world”.

The project remains in “care and maintenance”, with both parties actively reviewing market conditions with “a view to [resume] spodumene concentrate production as and when required and as driven by market demand”.

Renewable and clean energy focus

Mineral Resources believes gas will play an important role in the company’s transition from diesel fuel to cleaner energy sources.

The company is currently undertaking a drilling program at its Lockyer Deep Prospect, located in the highly prospective northern section of the Perth Basin.

In addition, the company is committed to developing a Decarbonisation Roadmap to reach net zero emissions by 2050.

Today’s announcement highlighted that work has begun to install a 1.5MW solar array and battery at its Monmunna mine.

Mineral Resources share price snapshot

The Mineral Resources share price has stormed 65.35% higher year-to-date.

Factors likely driving the outstanding performance could include sky-high iron ore prices and the hype around the lithium sector.

The post Mineral Resources (ASX:MIN) share price hits another record high after quarterly update appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

If you’re like most 30-year-olds, you’re past the point where fun weekends take priority over buying furniture, but you might not be ready yet for the move to the suburbs. You’re no longer an entry-level employee, but you’re not quite considered management either.

This in-between time of your life is — or at least should be — evident within your investment portfolio too. You’re able to start tucking away more meaningful sums of money in your retirement account, so the crazy flyers you took on hot story stocks are a thing of the past. Yet, your holdings don’t quite look like grandma’s as you know you’ve got time to ride out the market’s rough patches and won’t need any investment income for a long while.

With that as the backdrop, here’s a closer look at three of the biggest investing tripwires 30-somethings should be sure to avoid.

1. Investing too little

You had to know it was coming somewhere on this list, but there’s a reason it’s first … because it’s the most important misstep to avoid. This is the time in your life when it’s crucial to sock away as much as you reasonably can, as this is the point when your portfolio enjoys some of its strongest momentum.

You’ve likely heard the term “compound interest” before. It just means you’re earning new interest on previous interest payments, producing exponential growth. Although the idea is typically used in reference to interest-bearing accounts or bond portfolios, the idea applies to equity investments too. You don’t just want to earn good returns on your cash contributions to your account, you also want to earn good returns on the returns you achieved on your prior investments.

Obviously the more you put in, the more you get out. You may not have to set aside a massive amount of your paycheck to build a nice nest egg though, even if you achieve average returns. Earning an average of 9% annually on an investment of just $500 per month will leave you with nearly $100,000 at the end of a 10-year stretch. Waiting another 10 years to start but then growing your portfolio for 20 years will still only leave you with something on the order of $320,000 at the end of that two-decade stretch. If you can do it for 30 straight years though, you’ll end up with around $850,000 on only $180,000 worth of your own cash contributions.

The point is to start as soon as possible, even if you have to start small.

2. Taking on too much risk

It’s tricky if not confusing.

As a younger investor, you’re told to use the time you have until your retirement to your advantage by taking risks you can’t afford to take when you’re older. Time, you see, unwinds much of the downside volatility that riskier growth investments tend to bring to the table. For instance, Twitter may be up by more than 300% since early 2017 and back within sight of record highs, but as of early 2017, it was down more than 30% from its IPO (initial public offering) price and down over 60% from where the stock closed on its first day of trading three years prior. That would have been a scary three-year stretch for anyone making a big bet on Twitter right before retiring, even though the stock ultimately recovered for early investors.

There’s been a curious shift in the way many investors view and embrace risk in recent years, however. Too many of them (often younger) are taking risks just for the sake of risk-taking without considering the likelihood of an actual payoff. As an example, the prospect of a 300% gain is enticing to be sure, but if there’s only a 10% chance of earning that sort of payback while there’s a 70% chance of losing everything, that’s a risk best left avoided.

Examples of story-based failures include Blue Apron and Groupon. Both had scintillating backstories based on their consumer-friendly service, but too many investors looked past the fact that neither would ever be able to generate a sustained profit.

3. Failing to make a numbers-based roadmap

Finally, add the lack of a clear financial plan to the list of big mistakes younger investors can easily avoid but often don’t.

The reasons for not hammering out such specifics are entirely understandable. Some investors are fearful a detailed look at their current savings and investment plans will make it clear they’re off track. That’s scary … so scary that some folks would just rather not know. Other investors may simply be too busy, thinking that establishing such a plan will require too much time.

Neither fear is actually merited though. A bunch of investment calculators are freely available on the web, allowing you to quickly test out several “what if” scenarios. You can get a rough idea of what kind of money you’d have to invest to reach your personal endzone in a matter of minutes — just be sure to read the Motley Fool’s quick primer on everything to consider. And if you’re looking for something more comprehensive such as a complete portfolio plan that evolves as you age, odds are good your brokerage firm or a certified financial planner can readily offer a lifetime-minded allocation plan.

Any plan is better than no plan at all — just start somewhere.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 3 investing mistakes to avoid in your 30s appeared first on The Motley Fool Australia.

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• Why the BlueBet (ASX:BBT) share price is storming 6% higher today
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James Brumley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Twitter. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The BlueBet Holdings Ltd (ASX: BBT) share price is surging higher on Friday morning.

In early trade, the sports betting company’s shares are up 6% to $2.37.

This means the BlueBet share price is now up more than 100% since its Initial Public Offering (IPO) earlier this month.

Why is the BlueBet share price surging higher again?

Investors have been bidding the BlueBet share price higher today after the release of its fourth quarter update.

According to the release, BlueBet achieved turnover of $96.5 million for the quarter, up 39.8% on the prior corresponding period. For the full year, the company’s turnover increased 83.2% to $344.7 million.

This strong growth was driven partly by a 45.7% increase in active customers over the 12 months to 32,472. This significantly exceeds its prospectus forecast of 27,925.

Also growing strongly in FY 2021 was the company’s Net Win. It increased 20.9% to $10.1 million in the fourth quarter and 92.4% to $35.6 million for the year.

As a result of the above, BlueBet expects to report full year net revenue of $32 million in FY 2021. This is just ahead of its prospectus forecast of $31.4 million.

Operating cashflow was $1.8 million for the quarter and $8.3 million for the year. This left BlueBet with a cash balance of $56.1 million at the end of the financial year. Management notes that this provides it with the fuel to fund growth opportunities.

US expansion gathers pace

Those funds will be used to support its expansion into the massive United States market, which was given a boost this month by an agreement with Dubuque. The skin agreement will allow BlueBet to conduct online sportsbook operations in Iowa as an extension of Dubuque’s existing casino licence.

But it won’t be stopping there. The company has identified up to five priority states in the US – Virginia, Iowa, Colorado, Tennessee and Maryland – for its initial market entry as a wagering provider.

Like rival PointsBet Holdings Ltd (ASX: PBH), BlueBet sees a major growth opportunity in the market as regulations change. Which goes some way to explaining why investors have been bidding the BlueBet share price higher this month.

In respect to its US expansion, BlueBet’s Chief Executive Officer, Bill Richmond, previously told the Motley Fool: “Breaking into the US is a once in a lifetime opportunity. It’s not often you come across an industry where the US is not first in both people and technology but it’s the case with sports betting because it’s been underground until recently.”

“We have the technology and the expertise to take advantage of this greenfield prospect. With tremendous investor support we have raised a very substantial amount of growth capital to attack the emerging US market, which according to some estimates could be orders or magnitude larger than the Aussie market. We feel we are on the cusp of something very big here,” he added.

The post Why the BlueBet (ASX:BBT) share price is storming 6% higher today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Amazon.com, Inc. (NASDAQ: AMZN) share price has fallen in after hours trade following its second-quarter results.

Shares in the e-commerce giant plunged in extended trade, despite reporting sales growth across all segments.  

At the time of writing, shares in Amazon are sitting at US$3,338.92, down 7.2% after hours.

Unpacking this delivery

Sometimes having high expectations can lead to disappointment. This appears to be the case for analysts and Amazon’s quarterly results. Analysts had pencilled in estimates of US$115.20 billion in revenue and US$12.30 in earnings per share (EPS).

While Amazon’s revenue grew by 27% year-over-year (YoY) to US$113.08 billion, it came in under estimates. For comparison, the online mega-company dealt a 41% YoY growth rate in 2020. However, Chief Financial Officer Brian Olsavsky said:

We’re starting to lap that [COVID-19 boosted quarter] and that’s why you see some of the growth rate coming down

Similar to Facebook’s results yesterday, Amazon expects a slowing of growth to continue in the next few quarters due to these difficult periods of comparison. This was likely a heavy dampener on the Amazon share price.

While growth might be momentarily ‘slowing’, the increase in dollar figures is quite impressive considering the company’s large size. For instance, operating income for the quarter increased 32.8% to US$7.7 billion.

Furthermore, subscription and Amazon Web Services sales experienced a 32% and 37% uptick.

The result marks the last of Jeff Bezos being CEO, with the reins now handed over to Andy Jassy. As of 5 July, Bezos has shifted to being executive chairman.

Amazon share price snapshot

The Amazon share price has been more subdued during the past 12 months than it has been at other times in history. The past year has witnessed an 18% appreciation, which fails to outperform the 22.6% return from the S&P/ASX 200 Index (ASX: XJO).

However, on a 5-year timeframe, the Amazon share price has pulled a 370% return for long-term shareholders.

The post Amazon (NASDAQ:AMZN) share price drops 7% despite growth appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Motley Fool Australia Chief Investment Officer Scott Phillips joined Nine’s Late News on Thursday night to discuss a takeover offer for Iress Ltd (ASX: IRE), a bounceback for the Zip Co Ltd (ASX: Z1P) share price and a boom for export prices.

The post Zip share price booms, IRESS gets a takeover offer. Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Boral Limited (ASX: BLD) share price is falling following the end of Seven Group Holdings Ltd‘s (ASX: SVW) grab for the company and the beginning of a leadership shakeup.

Seven Group’s takeover bid finished at 7pm last night with Seven Group left holding 69.6% of Boral’s voting power. This morning, Boral announced several changes to its board.

Right now, the Boral share price is $7.29. That’s 0.68% lower than its previous close and 8 cents less than Seven Group was paying for Boral shares only yesterday.

At the same time, the Seven Group share price is up 0.13% with its shares trading for $23.34 apiece.

Let’s take a closer look at the finale of Seven Group’s takeover of Boral.

Seven Group wins takeover battle

The Boral share price is falling after changes rumoured to be facing Boral’s board following Seven Group’s takeover turned out to be true.

As was previously assumed, Seven Group’s CEO and managing director Ryan Stokes has taken over as chair of Boral’s board as of this morning.

Additionally, Seven Group’s chief financial officer Richard Richards has, indeed, been appointed to Boral’s board.

Now-former chair Kathryn Fagg has stepped down effective immediately.

Using his new title publicly for the first time, Stokes commented on Fagg’s time with Boral. He said:

On behalf of my fellow directors and shareholders I would like to thank Kathryn for her contribution to Boral… Kathryn leaves Boral in a strong position, with an actionable transformation strategy and a well-progressed program of strategic divestments for its US businesses including continuing to assess options for the Fly Ash business. The board is very grateful for her service.

Board members Peter Alexander and Deborah O’Toole will follow Fagg out the door after Boral’s annual general meeting in October.

Seven Group has reiterated its commitment to retaining a majority of independent directors on Boral’s board.

An Independent Director’s Committee has also been put in place at Boral. The company plans to instate a lead independent director to act as chair of the committee in the future.  

Boral share price snapshot

Despite the recent drama, the Boral share price is having a good year on the ASX.

Right now, it has gained 47% since the start of 2021. It is also 95% higher than it was this time last year.

The company has a market capitalisation of around $8 billion, with approximately 1.1 billion shares outstanding.

The post Boral (ASX:BLD) share price falls as Seven wins takeover and outs chair appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Ampol Ltd (ASX: ALD) share price is in the red today. This comes after the fuel retailer announced it has partnered with the Australian Renewable Energy Agency (ARENA) to fund a national electric vehicle fast-charging network.

The arrangement will see fast-charging stations installed at more than 100 Ampol service stations all over Australia.

Right now, the Ampol share price is $28.43, 0.18% lower than its previous close.

Let’s take a closer look at today’s news from Ampol.

Fast charging coming to Ampol

The Ampol share price is down today after the company announced electric vehicle owners will soon be able to charge their cars quickly with Ampol.

As part of the Ampol Addressing Blackspots Fast Charging project, Ampol will be installing fast-charging bays at service stations in the Greater Sydney, Melbourne, Perth, and Brisbane regions.

Newcastle, Wollongong, Geelong, the Sunshine Coast, and the Gold Coast will also see fast-charging bays pop up in the near future.

Each station to receive fast charging will have at least 2 bays available to customers. The charging stations will use renewable energy or electricity covered by green certificates.

ARENA’s Future Fuel Fund is putting $7 million towards the electrified additions to Ampol’s stations.

According to ARENA, the total cost of Ampol’s fast-charging bays will be $26.81 million.

Ampol believes electricity will be the “primary mobility energy source by 2050”.

The news follows the announcement of Ampol’s Future Energy and Decarbonisation Strategy. The strategy, which was made public in May, outlines the company’s goal to reach net zero emissions by 2040.

As part of the strategy, Ampol partnered with clean energy producers and tech giant Tesla Inc to make use of hydrogen energy and solar power. The Ampol share price gained 4.2% over the three trading days following the release of its strategy.

Work to construct Ampol’s fast-charging network will begin before the end of the year.

Ampol is one of 5 applicants to receive a share of ARENA’s Future Fuel Fund’s first round of funding. Round 1 saw $24.55 million handed out by ARENA today.

Combined, the 5 applicants will use the funds to build 403 new fast-charging stations in 8 Australian regions.

Commentary from management

Ampol’s CEO and managing director Matt Halliday commented on today’s news that might be affecting the Ampol share price. He said:

E-mobility infrastructure is a central pillar to capturing our existing customer base through the energy transition, as we look to expand our role in electricity to make the ease of the current liquid fuels era translate into the future (battery electric vehicle) environment. This includes exploring ‘at-forecourt’, ‘at-home’ and ‘at-destination’ solutions.

Ampol share price snapshot

Ampol is in the green on the ASX by the skin of its teeth. Right now, the Ampol share price is 0.74% higher than it was at the start of the year. It has also gained 4.44% since this time last year.

The company has a market capitalisation of around $6.7 billion, with approximately 238 million shares outstanding.

The post Ampol (ASX:ALD) share price falls on $7m funding for EV fast charging appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Janus Henderson Group CDI (ASX: JHG) share price is charging higher on Friday morning.

At the time of writing, the fund manager’s shares are up 9% to a multi-year high of $58.50.

This means the Janus Henderson share price is now up 39% since the start of the year.

Why is the Janus Henderson share price charging higher?

Investors have been bidding the Janus Henderson share price higher following the release of an impressive second quarter update.

According to the release, the company reported a 95% increase in second quarter adjusted operating income to US$269.3 million. This was also a 33% increase on its first quarter adjusted operating income.

This allowed the Janus Henderson Board to declare a quarterly dividend of US$0.38 per share and approve a US$200 million share buyback.

Management advised that this strong result was reflective of growth in assets due to positive markets and good investment performance, which translated into significant performance fees.

In respect to its investment performance, the company notes that 66% and 63% of assets under management are outperforming relevant benchmarks on a three- and five-year basis, respectively, as at 30 June 2021.

Management commentary

Janus Henderson’s Chief Executive Officer, Dick Weil, stated: “Second quarter financial results were extremely strong, reflecting growth in assets due to positive markets and good investment performance which translated into significant performance fees, adjusted operating income and EPS.”

“Our strong balance sheet, cash flow generation and financial discipline allow us to increase the return of excess cash to shareholders with the US$200 million accretive buyback announced today.”

“While we continue to make progress towards sustained organic growth, we are winning high-quality new business which is driving our net management fee rate higher during a period of fee compression in the industry. I am confident that our strategy of Simple Excellence has us on the right path to a stronger, more profitable and resilient company positioned well for long-term growth and value creation,” he concluded.

The post Janus Henderson (ASX:JHG) share price jumps 9% to multi-year high appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Mesoblast limited (ASX: MSB) share price is under pressure again on Friday.

In morning trade, the allogeneic cellular medicines developer’s shares are down over 1% to $1.89.

Why is the Mesoblast share price on the move?

The Mesoblast share price is trading lower ollowing the release of its fourth quarter update this morning. That update revealed further significant cash burn during the three months by the embattled biotech.

According to the release, Mesoblast recorded Temcell royalties of US$1.9 million for the quarter. However, this was nowhere near enough to stop the company from burning through significant cash again.

Mesoblast reported net cash usage of US$20.7 million for the three months ended 30 June. This includes an investment of US$10.8 million related to remestemcel-L for steroid refractory acute graft versus host disease (SR-aGVHD) and COVID-19 acute respiratory distress syndrome (ARDS).

Mesoblast had a cash balance of US$136.9 million at the end of the period, down from $158.3 million at the end of March.

COVID ARDS update

The Mesoblast share price has been sold off this year due to concerns over its COVID-19 ARDS trial. It was halted in December following analysis by the Data Safety Monitoring Board. This put its game-changing deal with pharma giant Novartis under threat.

Today’s update reveals that Mesoblast met with the FDA this week in relation to COVID-19 ARD and to determine the registration pathway for approval of remestemcel-L in this indication. No details were provided, but formal minutes are expected in the coming weeks

Management also advised that its agreement with Novartis remains in place but continues to be subject to certain closing conditions. This includes time to analyse the results from the COVID-19 ARDS trial.

The Mesoblast share price has lost over half of its value since this time last year.

The post Why the Mesoblast (ASX:MSB) share price is dropping on Friday appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Streaming giant Netflix (NASDAQ: NFLX) recently hired a gaming-industry veteran as part of its plan to add a video game collection to its platform. Shortly after that hire, the company’s second-quarter shareholder letter revealed some detail about its strategy for this medium, but there are still questions left unanswered.

Analysts and reporters have had a field day sharing their theories on what Netflix games could look like. A senior analyst at Wedbush has already called Netflix’s foray into gaming “dead on arrival” in an interview with Yahoo! Finance. More hopeful fans and investors think the company will prove the doubters wrong by innovating where other tech giants have failed in the gaming industry.

Realistically, there are only a few paths the company can take based on the information Netflix leadership has provided. Here’s the likelihood of each path and what each of them would mean for the company.

Interactive experiences instead of games

There’s a case to be made that Netflix’s gaming ambitions could look less like traditional video games and more like a whole new genre of “interactive experiences” for its intellectual property. A search of recent job openings at Netflix reveals some fresh insight — a director-level job opening in the company’s new “Interactive initiative” refers to building “game-like experiences” as an opportunity for the role.

However, digging further into other postings reveals a totally separate initiative called “Game Studio” (or just “Games”). The separation of “Interactive” and “Games” departments in the company’s recruiting language implies two budding departments. Netflix seems to be developing more content like Black Mirror: Bandersnatch, which is a good, low-risk path for the company, but these efforts will likely be separate from its foray into gaming.

The company’s remarks in its recent shareholder letter and earnings call reinforce this separation with Netflix COO Greg Peters calling ad-free mobile gaming a “primary focus” — at least initially. In the long term, the company sees all Netflix-compatible devices, including your TV, as “candidates for some kind of game experience.”

Sticking to mobile-only gaming

If we look at the history of the IP-based mobile gaming space, we can find a few examples of companies that succeeded in growing out this medium. We can also find examples of failures. Walt Disney comes to mind as an example of both success and failure over the course of its history.

While Disney has developed some successful mobile games on its own, the company made a shift around 2016 toward a greater reliance on third-party development for its IP. This shift included the shutdown of multiple in-house projects in favor of seeking partnerships with outside parties.

That said, Disney’s decision to shut down in-house mobile games was based on their performance, and Netflix’s definition of a high-performing game will undoubtedly be different than Disney’s. Netflix will have a massive differentiator in free-to-play mobile gaming — not relying on ads and in-app purchases in a space where virtually all major competitors do. Because Netflix doesn’t need to directly monetize its mobile games, it can succeed where Disney failed. For this reason, the streaming company’s efforts are likely to be lower risk than what its peers attempted.

Licensing content from third parties

In Netflix’s second-quarter earnings call, COO Greg Peters claimed Netflix will also license games as part of its offerings. This brief comment has been overlooked in most discussions about the news so far, but it could have big implications for its success.

In addition to developing mobile games in-house, Netflix may license existing mobile games to build an attractive lineup before investing heavily in first-party content. If that strategy sounds familiar, it’s because that’s exactly how the company succeeded in streaming movies and TV series. Such a move would bolster the company’s initial video game offering, familiarize subscribers with its gaming platform, and offer lessons to support the roll-out of in-house titles.

Avoid console and PC games

The Netflix-compatible devices that the company sees as candidates for its gaming platform include consoles, smart TVs, and PCs. However, it’s no secret in the gaming industry that major tech companies fail often in their pursuit of the console and PC gaming markets.

For example, recall Amazon Game Studios’ inability to create a single hit game despite flashy industry hires. And don’t forget Alphabet, which hired hundreds of developers to support the growth of its Google Stadia gaming platform only to shut down in-house development soon after.

While these failures don’t necessarily doom Netflix, they don’t paint a picture of a promising opportunity in console and PC gaming. Netflix is more suited to develop less complex, lower-budget mobile games that can differentiate themselves from the competition.

Now what

Netflix subscribers could be playing games on the platform as soon as next year, according to Bloomberg. That aggressive timeline makes sense assuming the first games to roll out will be licensed or in-house mobile games.

Overall, this risky bet on gaming could pay off, and it makes sense as the streaming giant’s next step to take advantage of its valuable IP and massive subscriber base. As long as Netflix sticks to the three viable strategies outlined above — interactive experiences, mobile gaming, and third-party licensing — investors should be optimistic about this next chapter of the company’s growth story.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 3 ways Netflix can make gaming work –and 1 way it can’t appeared first on The Motley Fool Australia.

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• Are Netflix’s growth days over?
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Taylor Weldon has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Netflix, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Netflix, and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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