Netflix Explores Monetizing its Free Mobile Games: Report
Netflix is reportedly deliberating on strategies to monetize its gaming division, marking a potential shift in its business approach, since these games are free on iOS and Android.
According to sources familiar with the matter, Netflix executives have been discussing various revenue-generating methods for its games, which currently are available free to subscribers, reports the Wall Street Journal.
The streaming giant’s games, part of its strategy to retain users and attract new ones, especially during show off-seasons, might soon see the introduction of in-app purchases, charges for advanced games, or ad-inclusion for ad-tier subscribers. This consideration represents a pivot from Netflix’s previous stance of avoiding ads or in-app purchases in its games.
Greg Peters, Netflix’s Co-Chief Executive, emphasized in April the company’s aim for a unique gaming experience focused on player enjoyment, free from concerns about ads or in-game payments. However, internal debates are a staple of Netflix’s culture, and such discussions don’t necessarily indicate a definitive decision to monetize games.
This reevaluation of strategy aligns with Netflix’s history of balancing customer experience with profitability. The company, which had previously opposed measures like password sharing crackdowns and ad-based service tiers, reversed its stance on these issues in recent years.
Despite the growth in game downloads, engagement remains low, with less than 1% of global subscribers playing Netflix games daily as of October, per Apptopia data. Netflix’s gaming venture, launched in 2021 with a focus on mobile games, is seen as a long-term investment.
The company’s most successful original game, “Too Hot to Handle: Love is a Game,” linked to its reality show, has seen seven million downloads since its 2022 launch. Netflix also licenses popular games like “Grand Theft Auto: San Andreas,” contributing significantly to its gaming downloads.
With an estimated $1 billion USD investment in gaming studios and development, compared to its $17 billion annual spend on shows and movies, Netflix’s gaming downloads reached 81.2 million globally last year. However, this figure is modest compared to industry giants like Roblox and Activision.
As Netflix gears up for producing console-quality games, including hiring for key gaming roles, discussions about charging for high-budget games have surfaced among executives.
Are you playing free games from Netflix? The model of offering freebies then charging money for them is nothing new. But it’s clear Netflix sees this as a possible revenue opportunity, given the popularity of mobile gaming.