Technology · August 6, 2022

Only a few subscribers play along with Netflix’s video game push

Netflix is ​​accelerating its foray into video games with plans to double its catalog of offerings by the end of the year, but few of the streaming giant’s subscribers are playing right now.

Since last November, the company has been rolling out the games to keep users busy between the shows’ releases. The games are only available to subscribers but must be downloaded as separate apps.

According to Apptopia, an app analytics company, the games have been downloaded a total of 23.3 million times and have an average of 1.7 million users per day. That’s less than 1% of Netflix’s 221 million subscribers.

The importance of games to Netflix’s overall strategy has arguably increased in recent months as the company faces increasing competition for user attention. In the second quarter, Netflix lost nearly a million subscribers after losing 200,000 subscribers in the first quarter — its first subscriber in more than a decade is declining.

In a letter to shareholders last year, Netflix named Epic Games and TikTok as its biggest competitors for the time being.

“One of the many benefits Netflix has in pursuing the strategy is its ability to drive engagement beyond the show’s first debut on the platform,” said Tom Forte, an analyst at Prosek Partners.

Still, Netflix’s chief operating officer, Greg Peters, said last year the company spent “many months and quite frankly years” learning how games can keep customers on the service.

“We’re going to be experimenting and trying a number of things,” Peters said during the company’s fourth-quarter earnings call. “But I’d say the eyes we have on the long-term prize are really more focused on our ability to create properties that connect to the universes, the characters, and the stories we’re building.”

The company’s current catalog of 24 gaming apps covers a variety of genres and Netflix shows, including Stranger Things: 1984. Some are modeled after popular card games, such as Mahjong Solitaire and Exploding Kittens.

According to a company official, the catalog will grow to 50 games by the end of the year, including Queen’s Gambit Chess, which is based on the hit Netflix series.

Intentionally vague

Netflix has been reticent about how it plans to make video games a core part of the company’s strategy, rather than just a side hobby.

“We’re still intentionally keeping things a little bit quiet because we’re still learning and experimenting and trying to figure out what’s actually going to resonate with our members, what games people want to play,” Leanne Loombe, Netflix’s head of external games, said during a panel at the Tribeca Film Festival in June.

Netflix hinted earlier this year that it will license popular intellectual property for its new gaming additions.

“We’re open to licensing and access to big game IP that people will recognize,” Peters said in January. “And I think you’re going to see some of that over the coming year.”

Netflix has tapped into outside developers for its current catalog but acquired three video game developers in the past year.

All of this leads to growing investments. Netflix hasn’t revealed how much it’s spending developing its video game segment, but the effort is capital-intensive. Netflix’s acquisition of Finnish developer Next Games cost the streamer about $72 million.

Forrester analyst Mike Proulx noted that Netflix has been slow to invest in games and that it still appears to be what he would consider “more of a test and experiment at this stage.” He noted that most people don’t associate Netflix with gaming.

So far, Netflix game download numbers lag far behind the leading mobile games – Subway Surfers, Roblox and Among Us to name a few – which, according to Apptopia, have more than 100 million downloads each. Still, downloads have been slowly increasing since May, after a downward trend that started in December.

“We have to please our members by having the absolute best in the category,” Reed Hastings, co-CEO and co-founder of Netflix, said in January. “We have to be different at it. There’s no point in just being there.”