Technology
Monday, October 23rd, 2023 2:21 pm EDT
Key Points
- Netflix has significantly expanded its game library from 24 to 77 games in the past year. While subscriber engagement with these games has been relatively low, Netflix sees this as part of its long-term strategy to build a sustainable center of entertainment value.
- The company’s push into gaming is part of a larger effort to diversify and create future revenue streams beyond its saturated subscriber base. Other areas of exploration include sports and retail, with the aim of providing more value to investors when the growth in subscriber numbers slows down.
- Despite initial challenges in getting existing subscribers to engage with mobile games, Netflix is testing games that can be played on any device. The company is exploring adaptations of its popular series into mobile games and licensing deals with titles like Grand Theft Auto, signaling its commitment to the gaming space. While there are technological hurdles, Netflix’s gaming efforts aim to offer a distinct gaming experience that complements its core business of movies and series.
Netflix’s venture into the gaming industry, initiated almost two years ago, has seen its game library grow from 24 to 77 games over the past year. While subscriber engagement with these games has been somewhat lackluster, Netflix sees this as part of its long-term strategy. The company’s Co-CEO, Greg Peters, explained that they are following a familiar trajectory, much like when they expanded into new regions or genres, and they remain committed to building a long-term center of entertainment value.
Netflix’s push into gaming is a part of a broader effort to establish future revenue streams to counter a potentially saturated subscriber environment. This diversification includes forays into sports and retail, both still in the early stages of development. As the streaming service considers its future beyond subscription growth, adding more revenue streams becomes a strategic priority.
While Netflix has rolled out games as standalone apps for mobile phones, getting existing subscribers to download and play them has been challenging. Most streaming service subscriptions are used on television screens, making it difficult to market mobile games to existing subscribers who primarily watch Netflix on TV. Data reveals that fewer than 1% of Netflix’s 247.15 million subscribers play games daily, despite the library’s expansion.
In contrast, other mobile gaming publishers have seen much higher download numbers, with titles like Gardenscapes, Candy Crush, and Clash of Clans registering hundreds of millions of downloads. In response, Netflix has begun testing games that can be played on any device. This approach includes using a mobile phone as a controller when playing on a TV, enhancing accessibility.
The Wall Street Journal reported that Netflix plans to adapt more of its popular series, such as Wednesday, Black Mirror, and Squid Game, into mobile games. Additionally, the company is exploring licensing deals, including a potential iteration of Grand Theft Auto.
While Netflix’s foray into gaming faces technological challenges, particularly when it comes to streaming multiplayer hardcore games due to lag issues, the company is not positioning itself as a console replacement. Instead, Netflix aims to provide a different business model for gaming, hoping that over time, it will become a natural way to play games on various devices. Ultimately, Netflix sees gaming engagement as an incremental contributor to its core business metrics, complementing its movies and series.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/10/23/netflix-takes-slow-approach-to-video-games.html
