Netflix is accelerating its foray into video games with plans to double its catalog of offerings by the end of the year, but for now, few of the streaming giant’s subscribers are playing.
Since last November, the company has been rolling out the games as a way to keep users engaged between program releases. Games can only be accessed by subscribers, but they must be downloaded as separate apps.
The games have been downloaded a total of 23.3 million times and have an average of 1.7 million daily users, according to Apptopia, an app analytics company. That’s less than 1% of Netflix’s 221 million subscribers.
The importance of gaming to Netflix’s overall strategy has arguably increased in recent months, as the company faces increasingly intense competition for user attention. In the second quarter, Netflix lost almost 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 year, Netflix named Epic Games and TikTok among its biggest rivals for people’s time.
“One of the many advantages to Netflix in following the strategy is the ability to drive engagement beyond when the show first comes out on the platform,” said Tom Forte, an analyst at Prosek Partners.
Still, Netflix COO Greg Peters said last year that it took “many months and frankly years” for the company to learn how games can keep customers on the service.
“We’re going to be experimental and try a bunch of things,” Peters said during the company’s fourth-quarter earnings conference call. “But I would say that the eyes we have on the long-term prize really are more focused on our ability to create properties that are connected to the universes, the characters, the stories that we’re building.”
The company’s current catalog of 24 game apps covers a variety of genres and Netflix shows, like “Stranger Things: 1984.” Several 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.
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 things a little bit quiet because we’re still learning and experimenting and trying to figure out what things are going to really resonate with our members, what games people want to play,” said Leanne Loombe, head of Netflix. external games, she told her during a panel at the Tribeca Film Festival in June.
Netflix hinted earlier this year that it will license popular intellectual property for its new game additions.
“We’re open to licensing, tapping into big game IP that people will recognize,” Peters said in January. “And I think you’ll see some of that happen over the next year.”
Netflix has turned to third-party developers for its current catalog, but has acquired three game developers in the past year.
All of that adds up to a growing investment. Netflix has not disclosed how much it is spending to develop its video game segment, but the efforts are capital intensive. Netflix’s acquisition of Finnish developer Next Games cost the streamer around $72 million.
Forrester analyst Mike Proulx noted that Netflix has been slowly investing in games and that it still appears to be what he would consider “more of a test and an experiment at this stage.” He pointed out that most people don’t associate Netflix with gaming.
So far, Netflix game download numbers lag far behind the top mobile games: Subway Surfers, Roblox, and Among Us, for some. – which each have more than 100 million downloads, according to Apptopia. Still, downloads have risen slowly since May, following a downward trend that began in December.
“We have to please our members by having the best of the category,” Netflix co-CEO and co-founder Reed Hastings said in January. “We have to be differentially good at it. There’s no point in just being at it.”