Netflix’s gaming ambitions aren’t paying off yet

Netflix’s early efforts to build a business out of mobile gaming are going through a rough patch.

The company started offering mobile games based on hit shows like “Stranger Things” or “The Queen’s Gambit” last November. Since then, it has struggled to get its subscriber base to play the 26 titles currently available.

Less than 1% of Netflix subscribers are playing its games, according to an August 6 report from CNBC. That’s based on data from Apptopia, a third-party site that tracks mobile app usage and growth. According to Apptopia, Netflix games average 1.7 million daily active users. It might not sound bad, but compared to the streamer’s solid 221 million subscriber base worldwide, it’s silly.

Netflix did not immediately respond to dot.LA’s request for comment and to verify its daily active user count. According to the Sensor Tower mobile app tracking database, Netflix’s two most downloaded games are, unsurprisingly, based on “Stranger Things.”

“NETFLIX Stranger Things: 1984” had 600,000 downloads last month, Sensor Tower reports, while “Stranger Things 3: O Jogo” was downloaded half a million times. Sensor Tower reports that Netflix games had 12 million downloads overall last month, but estimated that most of those downloads only brought in less than $5,000 in revenue.

Sensor Tower reported that Netflix mobile app revenue last month was $22 million; though it’s crucial to note that it includes its flagship Netflix streaming app, which likely accounts for the bulk of its app-based earnings.

A big gap is noticeable when you compare Netflix’s recent stats to some of the top local mobile game publishers that have been releasing games for over a decade, like Culver City or Scopely’s Jam City games. According to Sensor Tower, all Jam City games were downloaded a total of 2 million times last month, but the company made $21 million in revenue from them. Meanwhile, Scopely had just 800,000 downloads in July, but brought in $54 million in revenue.

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Perhaps the moral of the Netflix story is that less is more: Instead of forging ahead with a wide range of mobile games that can’t capture audiences (crucially, audiences willing to pay for microtransactions that generate revenue from games for otherwise free phones) might find more success with one or two hits that can be repeated for generations, like Scopely’s “Marvel Strike Force,” which released in 2018 and grossed roughly $9 million in June alone thanks to its mechanics of playing to win.

That said, Netflix VP of Gaming Mike Verdu said during a panel discussion in May that he plans to continue adding more games as part of the streamer’s monthly subscription. Under Verdu’s watch, Netflix will likely continue to buy game studios to acquire their content and development teams to release more “original” games that will then keep players coming back to the streamer’s in-app shows.

As Verdu said in the same discussion: “We’re not trying to convert you, we’re not trying to monetize you; we’re trying to bring you joy and delight to create an experience that will keep you coming back.”

(Disclosure: Jam City and co-founder Josh Yguado are investors in dot.LA.)

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