Netflix Games Engaging Less Than 1 Percent of Subscribers
Included with every Netflix subscription, Netflix Games allows users to play a handful of games on their mobile devices. Games are released as individual apps on the iOS App Store, while the full catalog of games, currently numbering 24 titles, is maintained in the Netflix app.
Similar to the way Apple Arcade operates, there are no ads, additional fees or in-app purchases included in the games, with the idea being that customers remain engaged with the streaming service while they are waiting for new installments of TV shows and series hosted by the platform.
For example, Netflix has tied in several of the available games to popular shows, such as "Stranger Things: 1984," "Stranger Things 3: The Game," and an upcoming chess game based on The Queen's Gambit. Netflix hasn't said how much it's investing in games, but the company acquired Finnish developer Next Games for around $72 million, and Netflix says the catalog will grow to 50 games by the end of the year.
Despite Netflix's investment, however, the latest engagement figures are unlikely to be warmly received by Netflix, as less than 1% of Netflix's 221 million subscribers play the games according to Apptopia. In total, the games have reportedly been downloaded 23.3 million times and average 1.7 million daily users, which is far short of leading mobile games.
Last year, Netflix's COO Greg Peters said the company was "many months and really, frankly, years" into learning how games can keep customers on the service. "We're going to be experimental and try a bunch of things, but I would say the eyes that we have on the long-term prize really center more around our ability to create properties that are connected to the universes, the characters, the stories that we're building."
Intensifying competition for user attention in recent months has likely since increased the importance of games to Netflix's overall strategy. According to data shared by the company's Q2 2022 earnings call, despite revenue increasing 9 percent year on year, Netflix lost 1.3 million subscribers in the United States and Canada over the quarter.
Netflix has also been raising its prices, which has resulted in some customers turning away from the service. In January, the company increased the prices for all of its plans. The basic standard definition plan went from $8.99 to $9.99, the Standard HD plan went from $13.99 to $15.49, and the 4K plan went from $17.99 to $19.99.
Netflix blames its subscriber loss on connected TV adoption, account sharing, and competition, and to continue to improve revenue growth, the company says that it is focusing on evolving monetization. A lower-priced ad-supported tier is in the works and is set to launch in early 2023, and the lower-cost plan could draw in some of the subscribers that have abandoned Netflix because of the rising costs.