Let’s break down the budget, production costs, and what this means for Netflix’s strategy.

The Success of Squid Game Season 1

Season 1 of Squid Game was produced on a budget of $21.4 million, averaging around $2.4 million per episode. For context, this is significantly lower than the budgets for many Western dramas. Despite its modest production cost, the series generated an estimated $900 million in value for Netflix within months of its release. The return on investment was astronomical, with Squid Game becoming Netflix’s most-watched show to date, amassing 1.65 billion viewing hours within the first four weeks.

This massive success set high expectations for Season 2, both in terms of storytelling and production quality. Netflix, keen to capitalize on the momentum, made a bold decision to substantially increase the budget for the second season.

Season 2 Budget: A Giant Leap

Reports indicate that Netflix allocated approximately ₩100 billion (roughly $84 million USD) for the production of Season 2. This represents a nearly fourfold increase in funding compared to Season 1. The enhanced budget allowed for:

• More elaborate set designs, including intricate game arenas and high-stakes visuals.
• Advanced CGI and special effects to elevate the overall experience.
• Higher compensation for returning cast members and additional high-profile talent.
• Improved production quality, from cinematography to sound design.

The significant investment underscores Netflix’s confidence in the series as a flagship property capable of driving subscriber growth and retaining its existing audience.

Where Did the Money Go?

Let’s take a closer look at the specific areas where Netflix invested its increased budget:

1. Elaborate Sets and Production Design

One of Squid Game’s defining features is its visually stunning and unsettling set designs. From the pastel-colored staircases inspired by M.C. Escher to the eerie simplicity of the games, the show’s production design played a significant role in its success. For Season 2, the stakes were even higher.

The increased budget allowed for larger, more intricate game arenas. Each set was designed to be a character in itself, immersing viewers in the high-stakes world of the series. For example, one of the games in Season 2 reportedly involved a sprawling outdoor arena with complex environmental hazards, requiring weeks of construction and meticulous planning.

2. Advanced CGI and Special Effects

While Season 1 relied heavily on practical effects, Season 2 embraced advanced CGI to enhance the visual storytelling. From creating realistic explosions to digitally altering environments for maximum impact, the use of special effects added a cinematic quality to the series.

3. Talent Compensation

The success of Season 1 turned its cast into international stars, with lead actor Lee Jung-jae gaining widespread acclaim. To secure returning actors and attract new talent, Netflix significantly increased compensation for its cast. Lee Jung-jae reportedly received a substantial pay raise, reflecting his elevated status and the show’s global success.

4. Global Marketing Campaign

A portion of the budget was allocated to marketing and promotion. Netflix launched an aggressive global campaign for Season 2, including interactive events, social media campaigns, and collaborations with brands. The goal was to reignite the buzz around the series and ensure it reached even larger audiences.

The Impact on Netflix

Netflix’s decision to invest heavily in Squid Game Season 2 aligns with its broader strategy of creating must-watch content that keeps subscribers engaged. Here’s how the investment impacts Netflix:

1. Strengthening International Programming

Squid Game is a shining example of the potential of international programming. By significantly increasing the budget for Season 2, Netflix signaled its commitment to non-English content as a cornerstone of its global strategy. The move also demonstrates the company’s confidence in Korean entertainment as a driver of growth.

2. Retaining Subscribers

With rising competition from platforms like Disney+, Amazon Prime Video, and HBO Max, Netflix needs flagship content to retain subscribers. Squid Game Season 2 serves as a major draw for audiences who might otherwise explore rival services.

3. Monetizing Merchandise and Spin-Offs

The success of Squid Game has extended beyond streaming. Netflix has capitalized on the show’s popularity through merchandise, themed experiences, and potential spin-offs. The increased budget for Season 2 ensures the quality needed to sustain its cultural relevance and expand its brand.

Return on Investment

Will Netflix’s investment in Season 2 pay off? Early indicators suggest it will. The buzz surrounding the series has already boosted Netflix’s visibility in key markets, particularly in Asia. While specific revenue figures for Season 2 are yet to be disclosed, the show’s ability to attract new subscribers and retain existing ones is a significant metric of success.

Looking Ahead

As fans eagerly await the release of Season 3, Netflix’s investment in Squid Game Season 2 sets a high bar for the series’ future. With a reported $84 million budget, the second season has not only delivered a more polished and expansive viewing experience but also reinforced Squid Game’s position as one of Netflix’s most valuable properties.

The success of Squid Game Season 2 isn’t just a win for Netflix—it’s a testament to the power of compelling storytelling, innovative production design, and the growing influence of international content. If the series continues on its current trajectory, it’s likely to remain a cultural phenomenon for years to come.