Netflix’s foray into gaming, announced almost two years ago, has seen significant progress with the expansion of its game library from 24 to 77 titles within the past year. However, subscriber reception has been met with a somewhat muted response, a reaction Netflix anticipated.
Co-CEO Greg Peters emphasized on the company’s recent earnings call that this trajectory aligns with their past experiences. He drew parallels to the introduction of new regions and genres, highlighting the need to gradually build towards a long-term center of entertainment value.
Netflix’s gaming expansion forms part of a broader strategy to establish diverse revenue streams, a move aimed at offsetting potential saturation in subscriber growth. This strategy includes ventures into sports and retail, both still in early stages of development.
As Insider Intelligence analyst Ross Benes points out, introducing multiple revenue streams provides Netflix with additional foundations for future earnings calls, especially as subscriber growth plateaus and password sharing becomes less impactful.
Netflix’s gaming initiative, unveiled in 2021, saw the introduction of standalone gaming apps for mobile devices. The goal was to engage subscribers between seasons of popular shows like “Stranger Things,” which also spawned two game adaptations.
In an effort to bolster their gaming division, Netflix enlisted industry heavyweights. Mike Verdu, a former executive at Electronic Arts, joined as Vice President of Game Development in 2021. Joseph Staten, renowned for his role in Microsoft’s “Halo Infinite,” was revealed as the Creative Director for a new AAA multiplatform game and original IP in February.
Encouraging existing subscribers to download and play mobile games poses a challenge. Data from Conviva revealed that over three-fourths of all streaming service usage occurs on television screens, leaving Netflix with the task of marketing its mobile game library to an audience less inclined to use the platform on their phones.
As of September 2023, Netflix’s games have been downloaded globally 70.5 million times, according to Apptopia. An estimated 2.2 million users engage with Netflix’s games daily, even as new titles are introduced monthly. While daily users reached a peak of 2.7 million in January 2023, they dipped below 2 million from March to July, hitting a low of 1.45 million in March.
These figures suggest that less than 1% of Netflix’s 247.15 million subscribers play games on a daily basis, despite the tripling of offerings in the past year.
In comparison, other mobile gaming publishers have seen far higher download numbers. Since Netflix’s first game launch, Gardenscapes publisher Playrix recorded 531 million downloads, King, maker of Candy Crush, saw 438 million downloads, and Supercell, owner of Clash of Clans, garnered 388 million downloads, according to Apptopia.
Addressing this challenge, Netflix is now testing games playable on any device. This beta rollout in Canada and the U.K. included titles like Oxenfree and Molehew’s Mining Adventure. Games played on TV require players to use a mobile phone as a controller, accessible through the Netflix app on Android and a separate controller-specific app on iOS.
Greg Peters affirmed earlier this year that gaming was following a familiar trajectory seen with new content categories, building over a multiyear period. While specific data points were not divulged, this indicates a long-term perspective.
Recent reports indicate Netflix’s intent to adapt major series, such as Wednesday, Black Mirror, and Squid Game, into mobile games. Additionally, there are considerations for a licensing deal to release a version of Grand Theft Auto.
Despite technological hurdles in the realm of gaming, Netflix aims to establish a natural and seamless gaming experience for its subscribers. While challenges persist, the company’s steadfast commitment to diversifying its offerings showcases its determination to remain at the forefront of entertainment innovation.
