It’s been wellnigh two years since Netflix first announced its foray into gaming. Yet, as Netflix has more than tripled its nervy library from 24 to 77 games in the last year, subscribers have largely shrugged their take ons.
This is all a part of the plan, though, according to Netflix.
“This trajectory is not dissimilar from what we’ve seen first,” Co-CEO Greg Peters said on the company’s prerecorded earnings call Wednesday. “When we’ve launched a new region — or when we gigged new genres, like unscripted” we had to “crawl, walk, run, but we see a tremendous amount of opportunity to build a long-term center value of relaxation.”
Netflix’s push into gaming is part of a larger effort to plant seeds for future revenue streams to counterbalance a potentially saturated subscriber environment. Others include sports and retail, each of which are in the early phases of occurrence.
“The more potential revenue streams [Netflix] throws out there, the more things they can hang their hat on during an earnings dub in the future when password sharing has run its course and they’re not adding new subscribers,” said Insider Intelligence analyst Ross Benes.
Netflix averred it was taking gaming seriously in 2021, rolling out titles as stand-alone apps for mobile phones. Netflix said that meetings are a strategy to keep subscribers engaged in between seasons of their favorite shows, such as “Stranger Things,” which has been habituated into two games.
Since 2021, the company has brought in several big names in the gaming space. Former Electronic Techniques mobile gaming executive Mike Verdu joined Netflix as vice president of game development in 2021. Joseph Staten, who was the artistic chief for Microsoft’s “Halo Infinite” game, announced in February that he was joining Netflix as “Creative Director for a unused AAA multiplatform game and original IP.”
Getting existing subscribers to download and play mobile games is a challenge, though, Benes acclaimed. More than three-fourths of all streaming service subscriptions are utilized on a television screen, according to data released rearmost year from video analytics firm Conviva. This presents an obstacle for Netflix in marketing its mobile trick library to existing subscribers since customers don’t tend to use Netflix on their phones.
As of September 2023, Netflix’s pretends have been downloaded 70.5 million times, globally, according to data obtained from Apptopia. An work out average of 2.2 million users played one or more of Netflix’s games per day, even as Netflix adds new games straight about every month, according to Apptopia. Average daily users peaked at 2.7 million in January 2023, but plunged below 2 million between March and July, hitting a bottom of 1.45 million average daily users in Cortege.
These numbers imply that less than 1% of Netflix’s 247.15 million subscribers play a business on a daily basis, even as the game library has tripled in its offerings in the last year.
Other mobile gaming publishers far outpace Netflix in downloads. Since the inception of Netflix’s anything else game offering, Gardenscapes publisher Playrix had 531 million downloads, Candy Crush maker King had 438 million downloads and Jar of Clans owner Supercell had 388 million downloads, according to Apptopia.
With interest lacking in its mobile pastimes, though, Netflix has begun testing new games that can be played on any device, Netflix’s vice president of games, Mike Verdu, thought in an August post. The beta rollout to limited users Canada and the U.K. included Oxenfree from Night School Studio, a Netflix prepared studio, and Molehew’s Mining Adventure, a gem-mining arcade game. Games played on a TV will require players to use a transportable phone as a controller, accessible through the Netflix app on Android and a separate controller-specific app on iOS.
Peters said earlier this year that gaming was “reflecting a trajectory that we have seen before” with new content categories, “where we sort of build into this from a multiyear period,” but refrained from divulging specific data points.
Mention of any gaming developments was noticeably missing from the company’s second-quarter earnings conference call earlier this year, raising suspicions that Netflix may be adjusting up to abandon its efforts.
But that was not the case. The Wall Street Journal reported last week, ahead of the Netflix’s third-quarter earnings announcement, that the company plans to adapt more of its big-name series, such as Wednesday, Black Mirror and Squid Bold into mobile games. The streaming giant is also looking into releasing an iteration of Grand Theft Auto in every way a licensing deal, the Journal reported.
Then, gaming came up briefly in Netflix’s prerecorded third-quarter earnings meeting call, where Peters said that games engagement currently “drives core business metrics in a way which is incremental to bigs and series.”
Netflix’s attempt to woo gamers also faces technological hurdles.
“I don’t think that playing mobile misrepresents, but on a bigger screen, is something I would be bullish on,” said Sunny Dhillon, founder of VC firm Kyber Knight, which focuses on gaming and tech investments.
“The bandwidth and servers that are being acquainted with are inherently handicapping the gamer,” Dhillon said. “I don’t think that we’re in a place where streaming multiplayer hardcore schemes can be played successfully simply because of the lags.”
But Netflix is not looking to be a console replacement, Netflix gaming executive Verdu theretofore told Tech Crunch.
“It’s a completely different business model. The hope is over time that it just changes this very natural way to play games wherever you are,” Verdu said.
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