Streaming content leader Netflix (NFLX) punched higher in soft trade Monday, easily leading its FANG stock peers and climbing further up the right side of a developing base pattern.
The gain came despite news from video content developer Telltale Games on Friday that it was paring back to a skeleton crew, preparing to fulfill certain obligations before shutting its doors for good. Loss of the developer for content tied to such high-profile series as “Walking Dead” (AMC) and “Game of Thrones” (HBO), and films including “Guardians of the Galaxy” (Marvel Studios) rattled the industry.
A statement from Netflix said its “Minecraft: Story Mode” title, under contract to Telltale, “is still moving forward as planned.” Industry news sources reported that plans for Telltale to develop Netflix' “Stranger Things” interactive series had been scrapped.
Netflix grew up around renting movie DVDs, delivered by mail to subscribers' homes. It was among the very first major names to dive full-flung into online video streaming services. And as the industry has shifted toward higher-quality original content, Netflix has duked it out with AT&T's (T) HBO and Amazon.com (AMZN) for creative precedence.
Minecraft: A More Mature Interactive Series
The “Minecraft: Story Mode” project with Telltale reveals another advance in creative content. It reportedly aims to develop a five-episode narrative feature allowing users to “choose-their-own-adventure” path through the series. Netflix had previously developed and launched several similar series based on children's titles, including “Stretch Armstrong”, “Puss In Boots” and “Buddy Thunderstruck.”
Although not really games, the series use gamelike programming to offer “branching points,” at which users can make choices from optional plot lines through which the protagonist will move forward. This provides users multiple optional narrative adventures from each branching point.
The Telltale shutdown gives a sense of how challenging and talent-consuming the new medium might be. Despite its high-profile contract wins, the company apparently still could not remain afloat.
The “Minecraft: Story Mode” and “Stranger Things” deals with Telltale appeared to be Netflix' first efforts to present the interactive storytelling technique to a slightly more mature audience.
In an interview with IndieWire in May, Netflix writer Kevin Burke said Netflix' interactive efforts have grown increasingly complex, offering more options at each branching point, requiring multiple layers of writing, and of animated footage.
“Your experience could be from, I believe it's like 13, 14 minutes is your shortest way to get to an ending, and I think it goes up to about 44 or 45 minutes to play the longest path connecting. And then there's a lot of variations in between that,” Burke told IndieWire.
Netflix' New “Diablo” Series Builds On Castlevania Success
In another video game-related angle, on Friday, Variety reported that Netflix was also fattening up its original content lineup by developing a series based on Activision Blizzard's (ATVI) successful video game “Diablo.” The hack-n-slash video game is on its third edition, “Diablo III.”
The project will be Netflix' second series based on a video game. It is just preparing to release the second season of the vampire thriller “Castlevania”, a game developed by Japan's Konami Holdings. The Netflix release is scheduled for Oct. 27.
The 2.3% advance of Netflix shares Monday hauled the stock about 4% above its 50-day moving average. That put it a bit less than 20% off its Aug. 20 low, and above the midpoint of the left side of a developing base pattern.
Netflix has been battling to hold support at its 10-week line since mid-September. Monday's move, like the other two advances in that struggle, came in very weak volume. That is part of the reason the stock's Up/Down Volume Ratio has slipped to a subpar rating below 1.0.
Fortunately, all of the losses since mid-September have also occurred in weak trade. That suggests institutional investors are neither selling nor buying, but waiting for the stock to find its direction.
Netflix' Accumulation/Distribution Rating corroborates that reading, holding at a better-than-average B-. This suggests institutions are holding steady, but not exiting the stock.