As Netflix Delves Deeper into Gaming, Monetization Strategies Emerge for Discussion
Netflix is reportedly contemplating a shift in its gaming strategy. According to The Wall Street Journal, discussions among executives are underway to explore ways to monetize its gaming platform further. Among the options being considered are introducing advertisements and microtransactions, a potential departure from the current model that emphasizes a premium, ad-free gaming experience for subscribers.
The recent addition of the GTA: The Trilogy – Definitive Edition to Netflix’s gaming catalog illustrates the streaming giant’s foray into gaming partnerships. While Netflix subscribers enjoy free access to all three games, non-subscribers on iOS and Android must pay $20 for each title.
This potential shift in strategy marks a departure from the company’s previous stance, where the absence of ads and microtransactions was positioned as a differentiator for its gaming platform. The company had emphasized a commitment to providing free, ad-free gaming experiences to its members. However, the evolving nature of the business landscape prompts ongoing discussions and strategic considerations.
The Wall Street Journal’s report also suggests that Netflix is contemplating offering “sophisticated” games for purchase, potentially introducing a new revenue stream. Another option under consideration is allowing subscribers to Netflix’s ad-supported plan access to games featuring integrated advertisements.
The company’s entry into the gaming space has been relatively recent, with the company primarily focusing on mobile games. As of October 2023, only 1% of Netflix’s global subscriber base actively engages with its gaming offerings, according to Apptopia. Despite being a newcomer, Netflix games experienced a surge in downloads, with 81 million downloads globally in 2023, up from 28.7 million in 2022, as reported by Sensor Tower.
Netflix’s interest in diversifying its gaming portfolio is evident in its aggressive hiring initiatives, aiming to bring in talent capable of developing AAA games with substantial development costs. The company recently hired Joseph Staten, a former executive at Bungie and Microsoft, to contribute to the development of a AAA multiplatform game.
With internal studios such as Night School Studios and newly established studios in Finland and California, Netflix is poised to expand its gaming content. The potential monetization strategies under discussion align with Netflix’s broader goal of funding its ambitious AAA game projects. While debates continue internally, Netflix members can currently download games, and the streaming giant has hinted at the possibility of venturing into its cloud gaming service in the future.