Netflix Plans to Offer Video Games in Push Beyond Films, TV

They're probably referring to GOG, which is owned by CD Projekt. Purchasing CD Projekt would give Netflix the distribution rights of the GOG catalogue.

There's already a bit of a connection- Netflix has the Witcher show, CDPR has the games (and are building some crossover DLC apparently)

Seems like merchandizing with posters, t-shirts, and action figures would be the quicker, easier, least risky way to do this.

Video games (which compete both in IP _and_ gameplay) seems like a much riskier proposition, relatively speaking.

It's deceptively tricky to build out this kind of strategy. IP builds product awareness, but it doesn't lead to a sustained gaming audience, which needs something more akin to a platform strategy per franchise(a Madden, Mario, Guitar Hero, GTA, etc.) - you don't want to just make a "Stranger Things" game, because even if it's a deeply realized experience, it doesn't loop into another franchise in the way that, say, playing a Queen song on Guitar Hero will lead you towards seeking out the game's recommendation for other songs; neither will it have the kind of premise that is as self-contained and enabling for player projection as a GTA.

Netflix has become known for optimizing content against the algorithm's feedback and not really letting a show run to a natural conclusion before killing it. This is going to be troublesome if applied directly to gaming, since it won't create platform reinvestment.

Until I see more announcements I'm going to guess that this will turn out like Amazon Game Studio - lots of investment without results.

That isn't an automatic indication of them having any real success. See Instagram's attempts to become Tick Tock. Their failures would be pathetic if I mourned their decline.