According to a CNBC report, less than 1% of Netflix’s 221 million subscribers are playing the service’s games every day.
Based on data from Apptopia, the report revealed that Netflix’s mobile games have had 23.3 million global downloads, and an average of 1.7 million subscribers are connecting to the game daily.
When Netflix announced its move into games in November, it was seen as a revenue diversification strategy at a time when it was sinking cash. Since then, the streaming service has seen a massive exodus of subscribers — 200,000 in the first quarter, nearly a million in the second — so the gaming may be even more important for the service now than it was when it initially launched.
However, it is likely that gaming will be on the back burner for some time. “Unless they stabilize subscription levels and are seeing some momentum from ad-supported levels, I expect to see a lot more aggressive movement on the game front,” said Ross Rubin, principal analyst at Reticle Research, a consumer technology advisory. hope not.” firm in New York City, told TechNewsWorld.
“This Apptopia report should be disastrous for Netflix’s senior management,” said Mark N. Venna, president and principal analyst at SmartTech Research in San Jose, Calif.
“It confirms what many industry experts have long suspected: gamers don’t see the Netflix brand as even remotely attractive for gaming versus traditional mobile, PC and console gaming platforms,” he told TechNewsWorld.
He said the lack of appeal would deprive Netflix of its ability to strengthen its subscription business and drive incremental revenue through gaming.
no need to worry
Other analysts said Apptopia’s findings won’t cause much consternation in Netflix’s executive suites.
“Netflix should be vigilant and attentive to consumer feedback as it builds out its still-nascent game portfolio, but I don’t think it should be overly concerned,” said Paul Erickson, research director at Parks Associates. Consulting company in Edison, Texas specializing in consumer technology products.
“The company is playing the long game when it comes to being a provider of connected entertainment, and it is learning the habits of its customers,” he told TechNewsWorld. “It’s still early for its gaming aspirations, and I don’t believe its current game with mobile apps is the end of its gaming strategy — just the initial phase.”
advertisement
George Zizyashvili, principal analyst at Omdia, a research and consulting firm in London, called Netflix’s approach to gaming “cautious and measured”.
“Netflix Gaming launched with just five games worldwide last November. Nine months later, it now offers 26 exclusive games, including games made by its acquired studios,” he explained to TechNewsWorld .
“Netflix recently unveiled several upcoming games as tie-ins for their respective Netflix TV series. Based on its acquisitions and activity in this area, I think Netflix remains committed to gaming,” he said.
questionable value proposition
Michael Inoue, a principal analyst at ABI Research, a global technology intelligence firm, agreed that Netflix shouldn’t be too concerned about the Aptopia findings. “If Netflix is concerned, they had unrealistic expectations,” he told TechNewsWorld.
“Entering the gaming market as a previous outsider is never an easy task, especially when you are targeting mobile games,” he said.
“While Netflix’s mobile games, which still number less than 30, can be included in subscriptions — without ads or in-game purchases — these games are essentially competing for free,” he explained.
“Most mobile games are still free to play and most consumers accept both advertising and in-game purchases, as long as it’s not a ‘pay to win’ – meaning you don’t have to go ahead or win.” have to pay for it,” he added.
Vena pointed out that Netflix is competing in a space with strong competitors who are offering a strong value proposition. “It’s very difficult to promote and defend Netflix’s value proposition in the gaming space,” he said. “Unless it offers some brand tie to their streaming content properties — which may be a non-starter — it’s hard to understand how Netflix can differentiate itself in any meaningful way.”
need more marketing
“Netflix is a company known for streaming video entertainment, not gaming,” Eriksson said. “Neither the brand nor service resonates with the public as a known quantity when it comes to gaming. Without an active marketing campaign and branding push, the change in consumers’ brand perception will be slow and gradual.
“Right now, in the early stages of their gaming strategy, game content is ranked as the value addition to its video content,” he continued. “Whether mobile gaming remains a value-add to increase subscriber stickiness and perceived value of Netflix subscriptions in the long run, or the company creates a broader content and brand push around gaming, it remains to be seen.”
Inouye notes that even though it has a link to Netflix’s game at the bottom of its app, it hasn’t generated a significant amount of marketing. “It makes sense given the current size of its gaming library,” he said, “but as it fills up, or when new titles based on hit shows launch, I’m looking for more direct marketing on their behalf. I look forward to your efforts.”
advertisement
Rubin agreed that Netflix could do a lot to promote its games and suggested that might change when the company launches one of its proposed new services. “With the launch of the ad-supported tier of Netflix, this could provide them with some inventory to promote their games,” he said.
Zizyashvili cited three reasons for the low response by gamers to Netflix’s offerings: small selection, low customer awareness, and mobile device exclusivity.
“Smart TVs, monitors, set-top boxes and digital media players are the preferred devices for watching Netflix at home,” he explained. “I believe that’s why many Netflix subscribers rarely visit their mobile app for this reason.”
“If Netflix were to bring its games to more devices — for example, through cloud gaming — I think it could significantly increase customer engagement with its games,” he said.
‘Destined to fail’
Inouye agreed that content is a problem with Netflix games at this time. “Netflix doesn’t have enough unique content yet,” he said. “While some titles may be exclusive, many have game archetypes similar to other popular mobile games.”
“Netflix needs more unique IPs that take advantage of its most popular video franchises,” he continued. “The Stranger Things games are a prime example here, with Netflix needing more games of this type, rather than reimagining mobile games with little ties to their exclusive library of content.”
“That’s probably the goal, but it takes time to develop these games and build a library,” he said. “The challenge is finding a way to get the right timing between the life cycle of the video franchise and the time to development and the investment on the gaming front.”
Still, there are those who argue that Netflix made a big mistake in gaming in the first place. Michael Pachter, managing director of equity research at Wedbush Securities in Los Angeles, said, “Nobody needs Netflix to provide games, just like someone doesn’t need to sign up for video on demand at a sporting event. “
“There’s no natural connection between Netflix’s business and games, and their foray into gaming is set to fail,” he told TechNewsWorld. “It’s like McDonald’s selling groceries, because they serve half the population and the population eats there. It’s not logical that they would include groceries in their offering. Adding a Netflix game is similarly misleading. .
