Netflix tried to get ahead of some bad news this week by hyping a gaming announcement, part of the company’s strategy to pep up investors worried about the streaming giant’s future.

Why it matters: Netflix reported its first-ever quarterly loss of subscribers yesterday, triggering a full season’s worth of takes to binge-read.

• Execs are floating offering cheaper ad-supported tiers and cracking down on password sharing.
• They’re also talking a lot about games.

The details: Netflix announced a mobile game and animated series based on the card game Exploding Kittens on Monday, which offers “an early glimmer” of its gaming strategy, company COO Gregory Peters told investors yesterday.

• The mobile game is set to launch via Netflix’s phone app next month, with the animated series to follow next year.
• Future versions of the game will have elements from the series, and “all art and design will be inspired by the show,” a Netflix rep told Axios.
• That kind of “interplay,” as Peters put it yesterday, is “an initial step on a long road map” for linking its show and movie content to its games.

Netflix currently offers 17 games, with four more announced for May.

• Gaming is not yet based on the splashy originals model, as Netflix initially builds its mobile gaming library with titles that mostly have or will appear on other platforms too.
• The May offerings include a new release of casual dragon-hatching game Dragon Up and a port of the more complex Moonlighter, a 2018 indie game about owning a magical weapons shop by day and going on monster-slaying adventures at night.
• The company has acquired three game studios since September, setting up potential for homegrown exclusives. (Yesterday, Co-CEO Reed Hastings called them “small acquisitions to build up the know-how and the creative chops to be able to make some really great games.”)

Between the lines: Netflix’s gaming plans currently look like a subscriber retention effort and marketing play rather than a plunge into direct competition with gaming’s biggest companies.

• Netflix’s initial moves are focused on giving people more to do with their Netflix app.

Be smart: Gaming is a notoriously hard business to make money in, but Netflix sees gold there.

• “We think that we can build a big revenue and profit stream by adding games,” co-CEO Theodore Sarandos told investors.
• It’s a more viable move at the moment, he added, than adding live sports.

Meta’s second annual showcase of virtual reality games for its Quest headset included titles involving Ghostbusters, The Walking Dead and the NFL.

Driving the news: The company formerly known as Facebook is leveraging some very famous brands to try to improve adoption of the headset formerly known as the Oculus Quest.

Some of the games showcased:

• NFL Pro Era, which puts gamers virtually on the field, seeing a game through the eyes of a football player.
• Moss: Book II, a Quest version of an adventure game that stars a mouse and had otherwise only been playable on PlayStation VR.
• Ghostbusters VR, a ghost-catching game that can be played with up to three other people.
• The Walking Dead: Saints & Sinners — Chapter 2: Retribution, a sequel to the first-person zombie game.
• Ruinsmagus, a “narrative-driven action Japanese role-playing game,” a genre that is rare in VR gaming.

Not shown today was the previously announced VR version of Grand Theft Auto: San Andreas, which could indicate that it won’t be out until next year.

Between the lines: Meta doesn’t share sales numbers for its headset, but its Quest 2 headset is considered its most successful product by industry observers, reaching several million users.

• That's sizable but far from a number that would classify VR as mainstream.
• Meta nevertheless has pitched VR as crucial to its overall metaverse push.

Be smart: Meta wants momentum for its VR games, but its biggest rival in the field, Sony, is set to release PlayStation VR 2 sometime in the next year or two.

The Nintendo labor claim we covered yesterday alleges the gaming company and contracting agency Aston Carter “discharged” (read: dismissed) an employee due to the worker's efforts to join or form a labor organization, according to a redacted copy of the filing obtained by Axios.

Why it matters: The document slightly narrows the still-vague claims, which will now be investigated by the National Labor Relations Board.

• The alleged infractions include surveillance and interference with the employee’s legally protected right to conduct “concerted activities” like discussing wages in a manner that's part of labor organizing.
• A potential sticking point, beyond the merits of the contentions, is who would be culpable, Nintendo or Aston Carter. Contact information for both was used in the filing, but big companies often use contract agencies in part to not have to deal with these types of entanglements. (Neither has commented on the matter.)

What’s next: The redacted document is all the public will likely see for now unless the charging party comes forward.

• A regional office of the NLRB will investigate, with results of that investigation expected in 7-14 weeks, according to organization estimates.
• At that time the board could dismiss the charges or pursue a case.

👩🏻‍⚖️ The state of California is proceeding with its effort to appeal the misconduct settlement between Activision and the federal government, according to a new court filing.

• That’s despite the recent firing of California's top lawyer on the case, which had been followed by the resignation of another lawyer who expressed concern about the state’s commitment to pursuing Activision.

💰 A showdown is looming over planned “golden parachutes” for top Activision executives, as proxy firm Glass Lewis is advising stockholders to approve Activision's acquisition by Microsoft next week but to vote against the exec payment plan. It says the plan makes it too easy for leaders to cash out. In an SEC filing, Activision pushed back.

🎬 Dwayne Johnson will executive produce the movie version of 2021 hit co-op game It Takes Two, according to Variety. He might even star in it.

🎵 Microsoft and original Halo composer Marty O’Donnell have settled their lawsuit over music for the franchise, Eurogamer reports.

🧱 The walls in Elden Ring that would break after 50 hits were a glitch that has since been patched, IGN reports

Esports stars have shorter careers than NFL players. Here’s why. [Jonathan Lee, The Washington Post]

“When you’re a 20-year-old, you can be all in games 24/7 and be super happy, right?” [former professional gamer Dennis “Thresh”] Fong said. “But when you’re in your 30s and 40s, you’ve got more real life responsibilities. You may have a family, you may have a kid, you may have stuff going on in your life. … I still love games, I still play games, but it’s not a priority for me.”

Many of the professional gamers from the early 2000s retired for those very reasons. As they got older, the time they put into training didn’t justify the meager winnings and salaries they received in return. And now with the rise of streaming, many pro gamers opt out of the big leagues to capitalize on familiarity and fanbases developed during their esports days to become content creators.

The newly announced Sonic Origins may be a remaster of four classic Sonic games, but it's thoroughly modern in presenting players with a complicated purchasing decision.

• The game will be sold in a basic version or one that includes three optional downloadable packs of extra content, two of which can be bought separately.
• The additional packs include features like "hard missions," "character animation in the main menu" and "camera controls over the main menu islands."
• Players are used to being asked to pay extra for additional characters or music, but making added menu animations a premium addition is ... innovative.