Netflix is accelerating its push 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 show releases. The games are only accessible to subscribers, but must be downloaded as separate apps.
The games have been downloaded a total of 23.3 million times and average 1.7 million users daily, according to Apptopia, an app analytics company. That’s less than 1% of Netflix’s 221 million subscribers.
The importance of games to Netflix’s overall strategy has arguably grown in recent months as the company faces intensifying competition for users’ attention. In the second quarter, Netflix lost nearly a million subscribers, after losing 200,000 subscribers in the first quarter — its first subscriber decline in more than a decade.
“One of Netflix’s many advantages in terms of pursuing strategy is the ability to drive engagement beyond the show’s first appearance on the platform,” said Prosek Partners analyst Tom Forte.
Still, Netflix Chief Operating Officer Greg Peters said last year that the company had “many months and really, frankly, years” to learn how games can keep customers on the service.
“We’re going to be experimental and try a lot of things,” Peters said during the company’s fourth-quarter earnings conference call. “But I would say that our eyes on the long-term prize are really more focused on our ability to create properties that connect to the universes, the characters, the stories that we’re building.”
The company’s current list of 24 game apps covers a variety of Netflix genres and shows, such as “Stranger Things: 1984.” Several are modeled after popular card games such as “Mahjong Solitaire” and “Exploding Kittens”.
The list 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 spokesperson.
Netflix has teased how it plans to make video gaming a core part of the company’s strategy and not just a side hobby.
“We’re still intentionally keeping things a little quiet because we’re still learning and experimenting and trying to figure out what things will resonate with our members, what games people want to play,” Leanne Loombe, head of Netflix. external games, called during a panel at the Tribeca Film Festival in June.
Netflix hinted earlier this year that it would license the popular intellectual property for new gaming additions.
“We’re open to licensing, access to great gaming IP that people will recognize,” Peters said he said in January. “And I think you’re going to see some of that happen over the next year.”
Netflix has tapped outside developers for its current slate, but has acquired three video game developers in the past year.
All this contributes to the increase in investment. Netflix hasn’t disclosed how much it’s spending to grow its video game division, but the efforts are capital-intensive. Netflix’s acquisition of Finnish developer Next Games cost the streamer about $72 million.
Forrester analyst Mike Proulx noted that Netflix has been investing in gaming of late and that it still appears to be what he would consider “more of a test and experiment at this stage.” He noted that most people don’t associate Netflix with gaming.
So far, downloads for Netflix games are far behind top mobile games — Subway Surfers, Roblox, and Among Us, to name a few — which each have more than 100 million downloads, according to Apptopia. However, downloads have been slowly increasing since May, following a downward trend that began in December.
“We need to please our members by having the absolute best in class,” Netflix co-CEO and co-founder Reed Hastings said in January. “We have to be different great at it. There’s no point in just being at it.”