For the past two years, people with a Netflix subscription could get many mobile games for free. Netflix made over 75 mobile games, featuring popular titles like Grand Theft Auto, Love Is Blind, Monument Valley, and Oxenfree, among others.
Currently, there’s a possibility that Netflix is looking into ways to make money from its gaming business, as per a recent report.
Netflix Plans to Make Money from Games
The Wall Street Journal mentions that the company has been talking for several months about how to earn money from its games. This includes things like in-app purchases, charging for higher-quality games, and adding advertisements to games available for subscribers on its ad-supported tier. These methods are standard and successful in the mobile gaming industry, where it’s predicted that people will spend $111.4 billion on mobile games in 2024.
Talking about something doesn’t necessarily mean it will happen, so Netflix might choose not to make money from games. In April 2023, it seemed like Netflix dismissed the idea of using ads and in-game payments during a earnings call.
“We aim for a unique gaming experience, and part of that involves letting game creators focus solely on making games enjoyable for players. They shouldn’t have to be concerned about other ways of making money, like ads or in-game payments,” explained Greg Peters, co-CEO of Netflix, to investors.
However, plans can change. Initially, Netflix opposed introducing an ad-supported subscription tier and taking strict measures against password sharing. Yet, the company reversed its decision after experiencing a significant loss of subscribers in 2022, which was the first time it had lost subscribers in over a decade.
Workforce Reduction and Price Increases
The decision to earn money from games would be logical for the streaming service as its growth plateaued in early 2023, leading to a 3% reduction in its workforce. Netflix also recently raised its prices once more, with the premium plan now priced at $22.99 per month for new U.S. customers. Furthermore, last year Spotify and YouTube increased their premium service fees.
Furthermore, in 2022, Netflix advertised a job opening for a game director to lead the development of an AAA PC game. Such projects are known to be quite costly in the video game industry, with the U.K. Competition and Markets Authority (CMA) stating that AAA games can have development budgets exceeding $200 million.
According to The Wall Street Journal, Netflix has been considering charging fees for its upcoming high-budget games. Analysts estimated that Netflix has invested around $1 billion in acquiring gaming studios and making overall investments in its gaming business.
Netflix, which initially provided free mobile games, is now considering ways to make money from gaming. The company is exploring different strategies, such as in-app purchases and ads, to adapt to industry trends and generate revenue. Netflix’s flexible approach reflects its response to changing subscriber patterns, workforce adjustments, and financial considerations, signaling a dynamic evolution in its gaming initiatives.