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08-06-2024ENGINES OF GROWTH


NETFLIX’S VIDEO GAME STRATEGY COMES INTO FOCUS

Downloads for Netflix games have been growing as the company is betting on
gaming related to its reality TV shows.

[Photos: JESHOOTS.COM/Unsplash; Netflix]

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BY Janko Roettgers3 minute read

To Netflix, video games are a bit like the Japanese market.

When the streaming giant entered the country close to a decade ago, it faced
significant headwinds from established local competitors. Then, it learned the
language, refined its content strategy, and started signing up millions of
Japanese subscribers.

As the company is working on making its mark in gaming, it is treating the genre
just like an international market, explained co-CEO Greg Peters during the
company’s recent Q2 2024 earnings call. “You can think about Japan or India,”
Peters said. “We continually iterate. We refine our programming based on the
signals we get from our members.”

Since debuting the gaming feature in 2021, Netflix has launched around 100
titles. And it’s not slowing down any time soon: Peters told investors last
month that the company has another 80 games in development. The company also
just hired former Epic Games executive Alain Tascan as its new President of
Games, further signaling how serious it is about making a dent in the $193
billion global market. 

In contrast to its regular, detailed updates on video viewing, Netflix hasn’t
shared any data about the success of its gaming initiative yet. However,
third-party data points suggest things are indeed moving in the right direction:
The company’s 10 most popular mobile games have been downloaded a combined 68
million times to date, according to estimates from mobile app intelligence
company Appfigures.

Netflix owes its biggest success in gaming so far to the Grand Theft Auto
franchise. The company rereleased three GTA mobile titles at the end of last
year, resulting in a massive spike of more than 22 million downloads across all
of its titles in December, according to Appfigures. “Heading into that holiday
season of 2023 with the GTA releases, the Netflix catalog was lucky to break
three million monthly downloads,” says Appfigures Head of Insights Randy Nelson.
“Since that massive marketing move, we haven’t seen monthly downloads below five
million.”

But it’s not just crime that pays for Netflix. The 10-most-popular titles to
date also include a puzzler, a tower defense game, a soccer simulation, and a
car racing title, as well as two games specifically related to Netflix shows:
Stranger Things: 1984 has seen around four million downloads, while a Too Hot to
Handle game attracted close to six million downloads, according to Appfigures
estimates.




Netflix now wants to lean even further into such tie-in games. “Our opportunity
to serve super fandom with games is really remarkable,” said co-CEO Ted Sarandos
during the same earnings call. “Being able to take a show and give the superfan
a place to be in between seasons, and to be able to use the game platform to
introduce new characters and new storylines or new plot twist events: It’s a
really great opportunity.”

The company launched last year a dedicated Netflix Stories app to double down on
narrative games related to reality shows like Too Hot to Handle, Love is Blind,
and Selling Sunset, and now plans to add one new story-based game to the app per
month.

It’s not the first time Netflix has tried its hand at interactive storytelling.
Even before launching its first mobile game, the streamer experimented with a
number of interactive shows that could be played with a TV remote. But while
titles like Black Mirror: Bandersnatch garnered significant media attention,
most interactive titles never really took off with viewers; adults in particular
didn’t seem to care for the multiple-choice questions and branched narratives of
these titles. The company has since discontinued the initiative.

That’s not to say Netflix has given up on gaming on the TV altogether. The
company has been testing cloud gaming, which allows subscribers to play more
full-featured video games directly on their smart TV—and which, crucially, can
be accessed within the streaming app. (Mobile app store policies require that
Netflix offer its games via Google’s and Apple’s storefronts.) Netflix now
offers 10 cloud-ready games to a subset of subscribers in eight countries.

In the meantime, Netflix has begun to integrate some marketing for its mobile
games into its TV app, and is using QR codes to simplify discovery and
downloading from mobile app stores. However, there’s still no dedicated games
section in the company’s TV app—a missed opportunity, Nelson believes.

“Netflix Games now has something for everyone,” he says. “But the question
remains: How many subscribers are aware of this?”

Apply to the Most Innovative Companies Awards and be recognized as an
organization driving the world forward through innovation. Early-rate deadline:
Friday, August 23.


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ABOUT THE AUTHOR

Janko Roettgers is a San Francisco-based reporter who has written for Variety,
Protocol, and Gigaom, among other publications. More

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EXPLORE TOPICS

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