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Netflix has said it plans to be in gaming for years to come. Now the company is trying to figure out how to make money from it, a potential shift in strategy for the streamer.

Executives at the streaming giant have had discussions in recent months about how to generate revenue from its games, according to people familiar with the discussions.

Netflix games are currently free for all subscribers, part of a strategy to keep users coming back to the streaming service when their favorite shows are between seasons as well as to attract new fans.

Some of the ideas that have been discussed include in-app purchases, charging for more sophisticated games it is developing or giving subscribers to its newer ad-supported tier access to games with ads in them, the people said.

Such moves would mark a pivot for Netflix, which has resisted putting ads or in-app purchases in its games.

“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-Chief Executive Greg Peters told investors in April.

Netflix encourages open debate internally on its strategy, which is a key pillar of its culture, and such discussions don’t mean the company will decide to monetize games.

The discussions are the latest example of how the streamer constantly reassesses the balance between customer experience and the need to make money. Netflix previously resisted such moves as cracking down on password sharing and launching an ad-based tier of its service because it worried about the consumer experience, before reversing course on both fronts in the past couple of years.

The number of users downloading Netflix games is growing, but it remains small. As of October, fewer than 1% of Netflix’s global subscribers were playing its games daily, Apptopia estimates.

Netflix has been clear that its gaming strategy, which began in 2021 and so far consists of mobile games that subscribers can download free, is a long-term bet.

Netflix has bought a handful of small gaming studios over the past few years and has started to create more games focused on its own shows and movies. Its most popular original game, “Too Hot to Handle: Love is a Game,” launched in December 2022. The game, which is tied to Netflix’s “Too Hot to Handle” reality show, has been downloaded seven million times, according to Sensor Tower.

The streamer also licenses popular games like “Grand Theft Auto: San Andreas,” which drove 11% of Netflix’s game downloads in 2023, according to Sensor Tower.

Analysts have estimated that Netflix has spent about $1 billion on buying gaming studios and building the business. The company spends about $17 billion a year on its shows and movies.

Overall, Netflix games were downloaded 81.2 million times globally last year, a nearly threefold increase from the 28.7 million downloads it had in 2022, according to Sensor Tower. That latest total is a fraction of the hundreds of millions of downloads for game companies such as Roblox and Activision, the publisher of the megahit “Candy Crush Saga.”

Netflix’s gaming budget is expected to increase as the streamer is pushing into making console-quality games. The company has posted jobs for dozens of game executives, including a director to oversee its first big-budget game. Such “triple-A games” can cost hundreds of millions of dollars to make.

That push is why Netflix has discussed possibly charging for those kinds of games, some of the people said.

Some Netflix executives and investors have questioned the strategy of the division. At a Netflix leadership meeting in 2022, an analyst from Capital Group, which holds a large stake in the streamer, questioned the value of the game push and expressed concerns it was taking resources away from programming, The Wall Street Journal reported.

WSJ News Exclusive | Netflix Considers Ways to Make Money From Videogames in Possible Pivot

Ideas include charging extra for some games as well as incorporating ads and in-game purchases.

www.wsj.com

 

[Davevil]

 

[Magic Carpet]

If I see an AD, I'm out.
I was out of Youtube while they blocked my ad blocker. Then for some weird reason they changed their mind and now my ad blocker works again.

 

[Papa_Wisdom]

If their gaming is as good as there current content they can keep it. Honestly apart from the odd thing it’s offerings have significantly gone down hill.

 

[Fake]

 

[Kdad]

Cool cool.
I've been considering how to save money on Netflix movies.

 

[Indyblue]

lol they’ve barely started offering games and they’re already talking about how to make it shittier

 

[Saber]

Didn't EA did this and didn't work?
Try by all accounts. See how bad it goes.

 

[Gambit2483]

A Netflix Gaming userbase actually exists?

 

[Guilty_AI]

Its good they've decided to help me not use them.

 

[Schnauzer]

I didn't even know this was a thing and I am on the 4k plan.

 

[Alan Silvestro]

 

[ReBurn]

Netflix is gonna need better games if they want me to pay more for them

 

[ChorizoPicozo]

Let's go Netflix!!!!

 

[Walter Matthau]

As per the article less than 1% of subscribers are actively engaging with their game lineup.

For a company that basically wrote the book on how to best manage the long game to maximize profit, these strategies seem premature. Hard to wring extra pennies out of a base that apparently doesn't even exist yet.

 

[Ploopmonster832]

Netflix is gonna need better games if they want me to pay more for them

They have some ok ones but it feels like the bargain bin games at target or walmart for the most part. If they had more AAA titles i think id be more inclined to actually use it

 

[Gambit2483]

As per the article less than 1% of subscribers are actively engaging with their game lineup.

Netflix Gamers out there

 

[cash_longfellow]

Netflix needs to die.

 

[DownLikeBCPowder]

I didn't even realize Netflix provides games.. in what context? Stream them to PC and use a controller or kb/mouse or something?

 

[March Climber]

Netflix, at least so far, is a mobile gaming company. Mobile games contain all of this stuff so it's just status quo.

I'm still waiting to see if either Ubisoft or EA will pull the trigger first on console in-game ads.

 

[Rob_27]

Greedy fuckers. Don't screw with my entertainment. Please do the let them buy anyone out.

 

[nkarafo]

If I see an AD, I'm out.
I was out of Youtube while they blocked my ad blocker. Then for some weird reason they changed their mind and now my ad blocker works again.

They didn't change their mind. Blockers just got better. They are in a constant update battle but i guess Youtube are slowly giving up maybe.

 

[balls of snow]

I didn't even realize Netflix provides games.. in what context? Stream them to PC and use a controller or kb/mouse or something?

Mobile app

 

[Barakov]

Mobile app

 

[ahtlas7]

Who the hell is their ‘game’ customer?