February 7, 2023

Netflix is ​​accelerating its push into video games with plans to double its catalog of shows by the end of the year, but for now, only a handful of the streaming giant’s subscribers are playing.

Since last November, the company has been rolling out games as a way to keep users engaged between show releases. The games are only available to subscribers, but they must be downloaded as separate applications.

Games have been downloaded a total of 23.3 million times and average 1.7 million daily users, according to Apptopia, an app analytics company. That’s less than 1% of Netflix’s 221 million subscribers.

Arguably, the importance of games in Netflix’s overall strategy has increased in recent months as the company faces intense competition for users’ attention. In the second quarter, Netflix lost nearly a million subscribers, after losing 200,000 subscribers during the first quarter — its first subscriber decline in more than a decade.

in a Letter to Shareholders last yearNetflix ranks Epic Games and TikTok among its biggest competitors for people’s time.

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

However, Netflix chief operating officer Greg Peters said last year that the company had spent “many months and, frankly, years” learning how games could keep customers in service.

“We’ll be experimental and try a bunch of things,” Peters said during the company’s fourth-quarter earnings conference call. “But I would say that our eyes on the long-term prize are really more centered on our ability to create properties related to the universes, characters, and stories we build.”

company The current catalog of 24 game applications It covers a variety of genres and Netflix shows, such as “Stranger Things: 1984.” Many of them are modeled after popular card games, such as “Mahjong Solitaire” and “Exploding Kittens”.

The catalog will grow to 50 games by the end of the year, including “Queen’s Gambit Chess” based on the hit Netflix series, according to a company representative.

deliberately vague

Netflix has been cautious 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 quiet a bit because we’re still learning and doing experiments and trying to figure out things that will actually resonate with our members, and what games people would like to play,” said Leanne Loombe, president of Netflix outdoor games, during a Painting at the Tribeca Film Festival in June.

Netflix hinted earlier this year that it would license the popular intellectual property for new game add-ons.

“We are open to licensing, accessing an IP address for a big game that people will recognize,” Peters said in january. “And I think you’ll see some of that happen over the next year.”

Netflix has hired third-party developers for its current catalog, but it has acquired three video game developers last year.

All this adds up to the increased investment. Netflix has not disclosed how much it is spending to develop its video game segment, but the effort is capital-intensive. Netflix’s acquisition of Finnish developer Next Games has cost the streaming device about $72 million.

Mike Proulx, an analyst at Forrester, noted that Netflix is ​​slowly investing in games, and that it still looks like what he might consider “more of a test and try at this point.” He noted that most people don’t associate Netflix with gaming.

So far, the download numbers for Netflix games are not quite up to the leading games on mobile devices – Subway Surfers, Roblox, In Us, for a few. — which each has more than 100 million downloads, according to Apptopia. However, downloads have slowly risen since May, after a downtrend that began in December.

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

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