Netflix Aims to 'Crawl, Walk, Run' When It Comes to Video Games: It's Still Crawling

Key insights

6 slides

User Engagement

Daily game engagement remains low among Netflix subscribers.

Less than 1% of Netflix's 247.15 million global subscribers engage with its games on a daily basis. This is despite the game library expanding from 24 to 77 titles over the past year.

Long-term Vision

Netflix views gaming as a 'crawl, walk, run' strategy for future growth.

This multi-year, incremental approach mirrors the company’s previous expansion into new content genres and regions.

Like learning to ride a bike, Netflix is taking it one step at a time.

Strategic Approach. Netflix views gaming as a 'crawl, walk, run' strategy to create future revenue streams and keep subscribers engaged between show seasons.

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Summary

Netflix continues to pursue a cautious, long-term strategy for its gaming division, characterizing its current progress as a "crawl" phase. Despite expanding its library from 24 to 77 titles over the past year, the company has struggled to achieve significant user adoption. Data indicates that less than 1% of Netflix’s 247.15 million global subscribers engage with its games on a daily basis. As of September 2023, the service recorded approximately 70.5 million total downloads, with daily active users fluctuating between 1.45 million and 2.7 million throughout the year.

The company’s gaming initiative is intended to serve as a secondary engagement tool to retain subscribers between seasons of popular television series. However, the strategy faces structural hurdles, most notably that the vast majority of streaming consumption occurs on television screens, while Netflix’s current gaming offerings are primarily mobile-based. To address these challenges and improve engagement, Netflix is testing cloud-based gaming that allows users to play on televisions using mobile devices as controllers.

Management maintains that this multi-year, incremental approach mirrors the company’s previous expansion into new content genres and regions. To bolster its position, Netflix is increasingly leveraging its intellectual property by adapting hit shows like Squid Game and Black Mirror into games. Furthermore, the company is exploring high-profile licensing deals, including potential iterations of the Grand Theft Auto franchise. While industry analysts note that Netflix lags significantly behind established mobile gaming publishers in terms of total downloads, the company remains committed to building gaming as a distinct, long-term revenue stream to diversify its business model beyond traditional video streaming.