Netflix leverages mobile games for new revenue

For the past two years, Netflix subscribers have had the opportunity to download many mobile games, included free with theirsubscription. Netflix has developed more than 75 mobile games, boasting popular IPs such as Grand Theft Auto, Love Is Blind, Monument Valley, and Oxenfree, among many others. However, according to a recent report, Netflix may be interested in finding ways to generate revenue from its games business.

Exploring new opportunities

According to The Wall Street Journal, the company has had discussions about how to make money from its games for months, including in-app purchases, putting a price on more premium titles, and placing advertisements in games that subscribers to the version with ads have access to. These methods are common (and effective) in the world of mobile games, with projected consumer spending of $111.4 billion on mobile games in 2024.

Netflix declined to comment to TechCrunch. However, it is important to note that a discussion does not always lead to concrete action, so the company may decide not to monetize games. During an earnings conference in April 2023, Netflix appeared to have ruled out the idea of including ads and in-game payments.

Netflix’s approach

Greg Peters, Netflix‘s co-CEO, told investors, “We want to offer a differentiated gaming experience, and part of that is giving game creators the ability to think about building games solely from the perspective of player enjoyment, without having to worry about other forms of monetization, such as ads or in-game payments.” However, plans may be changing. Netflix was initially against launching a version with ads and fighting against password sharing, but has since changed its mind after losing thousands of subscribers in 2022, marking its first loss of subscribers in more than a decade.

A growth opportunity for Netflix

The move to monetize games would make sense for the streaming platform, considering that its growth stagnated in early 2023, leading to the layoff of 3 percent of its staff. Recently, Netflix raised prices again, charging $22.99 per month for the premium plan for new customers in the United States.

In addition, in 2022 Netflix posted a job advertisement for a game director to work on a AAA PC game, which can be a sizable project in the video game industry. According to the U.K. Competition and Markets Authority (CMA), AAA games can have development budgets of $200 million or more. According to the WSJ, Netflix has discussed charging money for its future high-budget games, adding that analysts have estimated that Netflix has spent about $1 billion to acquire game development studios and invest generally in its games business.