Netflix pressed “Start” on Netflix Games in fall 2021 — not that most of the streamer’s 247 million global subscribers know about the service, let alone play it. However, betting against Netflix hasn’t made for a lot of wins.
It would be “foolish” to “write off Netflix’s plans as non-consequential,” MoffettNathanson gaming analyst Clay Griffin wrote in a November 6 note to clients (and obtained by IndieWire). The film and TV industries once did that “at their own peril.”
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Right, Blockbuster Video? Right, linear television? Right, Aaron Jacobson?
Jacobson, who is the CEO of indie game studio Zollpa (“RoboSquad Revolution”), admits he’s one who has “questioned Netflix at every decision they’ve made.” The results? “I’ve always been wrong.”
What may be confusing here is Netflix gaming probably will not look like the Netflix of Gaming. And past streaming attempts to rival Microsoft’s Xbox console or Sony’s PlayStation — looking at you, Amazon Luna and Google Stadia — have fallen far short.
“Netflix’s dreams of disrupting the $100 billion-plus AAA game market are probably just that for now,” Griffin wrote. “In addition, it seems like too far a reach to think that Netflix will be able to build a streaming gaming service a.k.a. ‘The Netflix of Gaming.'”
Netflix, like Apple, is after young, mobile-first gamers, who represent the largest and most profitable sector of the video games industry. But Netflix isn’t adding games to add to its profits — it’s not even adding games to add subscribers. Wouldn’t work anyway.
Netflix has “some cool games, but none of them are cool enough that it’s going to convince somebody to subscribe to Netflix just for that,” Jacobson said.
The more-robust Apple Arcade costs $6.99 per month; Netflix plans, all of which include unlimited mobile games, start at $6.99 with ads and $15.49 without. (PlayStation Plus and Xbox Game Pass both start at $9.99 per month.)
Rather, the payoff for Netflix is engagement, which reduces churn (the rate of subscription-cancellation). Netflix already has industry-best churn rates; Netflix Games can expand that lead.
“Even simple and cheaply made video games allow fans to interact with IP for hours beyond the
run time of any show or film it may derive from,” Griffin said. “Fans may be forced to wait months or even years between the release of new seasons or films set within an IP universe. Games can help sustain them through that wait.”
Take “Stranger Things,” for example. While usage of the mobile-gaming adaptation “Stranger Things: 1984” peaked with the release of “Stranger Things 4,” the “1984” game sustained an elevated performance “far longer” than viewership of the TV did, according to data from SensorTower.
The trend was even more apparent for Netflix’s most-successful game to date, “Too Hot to Handle: Love Is a Game,” which coincided with the fourth season of the “THTH” reality dating show. (The streamer’s no. 2 game, somewhat strangely, is “SpongeBob: Get Cooking,” which is a Netflix Games exclusive based on Paramount IP.)
Netflix has released only 75 games so far, 11 of which are based on its films and TV series; Apple Arcade, which come installed on all Apple devices and is feature in the App store, has 333.
The mobile gaming industry sees 4.5 billion monthly downloads across Apple iOS and Android; monthly downloads for Netflix’s mobile games recently approached 6 million. Of course that 4.5 billion includes an undetermined portion of pure crap, but the math means Netflix games currently account for 0.1 percent of all mobile-gaming downloads.
As Jacobson put it, Netflix Games is still just “trying to establish a foothold.” Netflix execs would like to turn that into a stranglehold — and they’re willing to pay for you to play.
“We’re in games for the long term,” Netflix CFO Spence Neumann said during September’s Bank of America conference. “It’s a relatively small percentage of our overall content budget today, but it’s still, on an absolute basis, a pretty meaningful set of dollars in order to really go after this adjacency for us and this big new content category.”
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