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Microsoft could benefit from a partnership with Netflix in the gaming industry in several ways. Firstly, it could lead to a seamlessly connected ad platform across Xbox and Netflix, enhancing the reach and impact of their advertising efforts. Secondly, it could lead to deeper content partnerships. Netflix could create TV shows and movies from Microsoft's library of game titles, providing new avenues for content creation and distribution. Lastly, such a partnership could potentially pave the way for a merger between the two companies in the future, leading to even greater synergies and opportunities for growth.
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There is also massive synergy in this deal based on Netflix's other vertical for growth: gaming. The gaming industry will grow to $268 billion by 2025, 2x the market size of video streaming. Netflix already hosts playable games through its mobile app, and the mobile games market is bigger than console and PC gaming combined. *Microsoft CEO Satya Nadella previously said he wants to create a "Netflix for gaming" and the company's Xbox subscription service already has 25 million subscribers. Not only could this deal lead to a seamlessly connected ad platform across Xbox and Netflix, but it could also lead to deeper content partnerships, as Netflix could create TV shows and movies from Microsoft's library of game titles. And who's to say this couldn't all lead to a merger between the two later down the line?
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