Netflix is accelerating its push into video games with plans to double its offerings by the end of the year, but few subscribers are playing from the streaming giant for now.
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.
According to Apptopia, an app analytics company, the games have been downloaded a total of 23.3 million times and have an average of 1.7 million daily users. That’s less than 1% of Netflix’s 221 million subscribers.
The importance of games to Netflix’s overall strategy has arguably increased in recent months as the company faces increasing competition for users’ attention. In the second quarter, Netflix lost nearly a million subscribers, after losing 200,000 subscribers in the first quarter — the first number of subscribers to decline in more than a decade.
In a letter to shareholders last year, Netflix named Epic Games and TikTok as one of the greatest rivals for human time.
“One of the many benefits to Netflix in pursuing the strategy is the ability to increase engagement when the show first hits 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 conference call. “But I’d say the eyes we have on the prize in the long run are more focused on our ability to create properties that are connected to the universes, the characters, the stories we build.”
The company’s current catalog of 24 game apps spans a variety of genres and Netflix shows, such as “Stranger Things: 1984.” Several are modeled after popular card games, such as ‘Mahjong Solitaire’ and ‘Exploding Kittens’.
According to a company representative, the catalog will grow to 50 games by the end of the year, including “Queen’s Gambit Chess,” based on the hit Netflix series.
Netflix has been hesitant about how it plans to make video games a core part of the company’s strategy, rather than just a sideline hobby.
“We’re still keeping it a little quiet on purpose, because we’re still learning and experimenting and trying to figure out what things will really appeal to our members, what games people want to play,” said Leanne Loombe, head of Netflix. external games, said 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 gaming additions.
“We are open to licensing and access to IP for major games that people will recognize,” said Peters in January. “And I think you’ll see that happen in the coming year.”
Netflix has tapped third-party developers for its current catalog, but has acquired three video game developers in the past year.
All this leads to growing investments. Netflix has not disclosed how much it spends developing its video game segment, but the effort is 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 slowly investing in gaming and that at this stage it still appears to be what he would consider “more of a test and experiment.” He noted that most people don’t associate Netflix with games.
So far, Netflix game download figures have lagged far behind the leading mobile games – Subway Surfers, Roblox and Among Us, for a few — each of which has more than 100 million downloads, according to Apptopia. Still, downloads have risen slowly since May, following a declining trend that started in December.
“We have to satisfy our members by having the absolute best in the category,” said Netflix co-CEO and co-founder Reed Hastings in January. “We have to be distinctively good at it. It makes no sense to just be at it.”