Netflix is set to significantly increase its investment in gaming, exploring new avenues for monetization. This strategic shift comes as the company recognizes the substantial growth potential within the gaming market, aiming to enhance user acquisition and retention by delivering more value through its gaming offerings. Despite past adjustments to its gaming strategy, Netflix remains committed to expanding its presence in this lucrative sector.
Netflix’s Renewed Gaming Ambitions
Netflix co-CEO, president, and director Greg Peters outlined the company’s renewed focus on gaming during a recent earnings briefing. Peters emphasized that while Netflix’s current investment in gaming is relatively small compared to its spending on film, TV, and live sports, the opportunity for growth is immense. The company views gaming as a critical component for driving core business fundamentals, including increased user acquisition, improved retention, and a greater willingness to pay among subscribers.
Key Takeaways
- Netflix plans to significantly increase its investment in gaming.
- The company sees gaming as a key driver for user acquisition and retention.
- Monetization models for games are being explored, though current games are ad-free and lack microtransactions.
- Netflix is focusing on party games, kids games, narrative games, and mainstream games.
- Games will be available on mobile and streamed to TVs, not on Xbox or PlayStation consoles.
Strategic Growth and Monetization
Peters highlighted the positive effects already observed from Netflix’s gaming investments, citing the success of licensed titles like Grand Theft Auto and internally developed games such as Squid Game: Unleashed. The company aims to be disciplined in its investment, ensuring that value is created for members before scaling up significantly. While current Netflix games are included with a subscription and are free of ads or microtransactions, Peters indicated an openness to evolving the monetization model as the gaming segment achieves greater scale.
Expanding Game Categories and Platforms
Netflix is concentrating its efforts on four primary game categories: party games, kids games, narrative games, and mainstream games. These titles are designed for mobile devices and for streaming directly to TVs via Netflix’s own systems, rather than traditional console platforms like Xbox or PlayStation. This approach aligns with Netflix’s long-standing efforts to stream games directly to various devices.
Finding Netflix’s Voice in Gaming
Alain Tascan, Netflix’s gaming boss, likened the company’s journey in gaming to a musician finding their voice. He expressed optimism about Netflix establishing its unique identity in the gaming space. Regarding the closure of a AAA studio and the cancellation of a game from Halo veteran Joe Staten, Tascan clarified that this decision was not a retreat from ambitious games but rather a recognition that the studio’s genre did not align with Netflix’s platform strategy. Netflix remains committed to developing immersive, narrative games based on its intellectual property, as evidenced by titles like Thronglets for Black Mirror Season 7 and new content for Squid Game: Unleashed.
