Netflix To Pivot on Video Games in Attempt to Make Money; Is New Gamily Subscription Tier on Its Way?
Mobile games have long been a focus of growth for Netflix, but the streamer might be on the verge of changing its philosophy.
Netflix has put a substantial amount of resources into its mobile games division over the past few years with the assumption that if the world’s largest streaming company could also become a leading platform for video games, it would be even more indispensable to consumers than it already is. However, a recent report by the Wall Street Journal indicates that a pivot may be coming that would change the way that Netflix approaches video games moving forward. The company has long resisted putting ads and in-app purchases into its games as a way to distinguish it from other mobile game providers, but just as it did by introducing ads to shows and movies, the streaming giant might reconsider this stance.
- Netflix has offered video games for mobile users since its strategy began in 2021.
- However, a pivot may be on the horizon as the company aims to make the project profitable.
- Netflix may decide to start charging for games, or introducing ads into previously ad-free games to offset costs.
According to WSJ's Jessica Toonkel, Netflix execs have discussed how their games division can generate additional revenue for the company. Some ideas include introducing in-app purchases, charging extra for more sophisticated games, or adding a new subscription tier specifically for gamers. However, Toonkel notes that according to data collected by Apptopia, as of October, fewer than 1% of Netflix’s global subscribers play their games daily; this percentage was unchanged from 2022 to 2023. If these numbers are true, it might render the creation of a gaming-specific tier unviable.
“We want to have a differentiated gaming experience, and part of that is giving game creators the ability to think about building games purely from the perspective of player enjoyment and not having to worry about other forms of monetization, whether it be ads or in-game payment,” Netflix Co-CEO Greg Peters told investors in April.
A History of Netflix Gaming
This potential pivot comes after Netflix has invested a substantial amount into its games division. In March 2023, the company announced that it had 40 titles ready for release that year, with 86 more in some stage of development. The service also announced its largest acquisition ever in December with “Grand Theft Auto: The Trilogy — The Definitive Edition,” which hit the service on Dec. 14.
However, in 2023, questions started to arise from investors about the gaming division. One investor from Capital Group, which has a large stake in Netflix, expressed concerns that the gaming segment was drawing money away from its programming arm, which is currently far more valuable; but execs within Netflix insisted that gaming was essential for gaining new subscribers. Now, it looks like the gaming division will change to maintain its place within Netflix.
Not only has Netflix invested heavily in the creation of individual games, including some based on their most popular series and movies, but the company has also acquired multiple gaming studios, meaning that any pivot that the streamer could take regarding gaming would be more about further monetization, rather than jettisoning the division altogether.
Netflix
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.