Netflix’s Gaming Offering Is Being Largely Ignored By Customer Base

You might recall that almost exactly a year ago, Netflix announced that it would be getting into the gaming" business. While the announcement led many to believe that Netflix was going to jump into competing with Google's Stadia platform and offer streaming AAA video games, in actuality, it turns out to be... not so much. Instead, Stadia collapsed faster than a poorly maintained Miami condo building, and Netflix's plans were revealed to be a couple of movie/show-related mobile games siloed behind Netflix's mobile app. While this felt underwhelming, at least the games were free and contained no micro-transactions.

So, it's been a year; how's it going? Well, on the one hand, there are plenty of reviews of the 25 or so mobile games that are fairly positive. That's good!

Back in November, Netflix began offering games as part of its subscription service, launching with five initial titles: Stranger Things: The Game, Stranger Things 3: The Game, Card Blast, Teeter Up, and Shooting Hoops. It's since added more and now has over 25 mobile games that people can download through the Netflix app on either Android or iOS devices. Some of these games-like Into The Breach-are really good, too. And all of these games contain no ads or microtransactions.

However, that positive outlook on the quality of the games only adds to how perplexing it is that the number of Netflix subscribers who have even given a single one of those games a try is essentially a rounding error. That's bad!

As reported by CNBC, via data from app analytics company Apptopia, Netflix's games have been downloaded just over 23 million times and have an average daily audience of 1.7 million. That might sound good on paper, but it's basically nothing compared to Netflix's 221 million subscribers. What this data seems to show is that about 200 million people who have access to Netflix's library of games are currently not playing them or maybe don't even know they exist.

Still, with a solid list of games that continues to grow, Netflix is struggling to get anyone to care. Apptopia's data shows that all of these games have a combined daily audience of 1.7 million. Meanwhile, there are hundreds of crappy mobile games that have twice that alone.

This should ring as strange on multiple levels. Usually, when user adoption for a product is garbage, it's because that product is typically trash. That isn't the case here. Very few people seem to think that the problem here is the quality of the mobile games relative to the rest of the market. On top of that, while Netflix has certainly had its struggles as of late, the company's longer term success has largely been about great marketing and nimble business models that react well to change in customer demand. Yet here we are, with a mobile gaming market that's never been bigger and a company with all kinds of marketing power and name ID that can't seem to marry those two things together to get people to play its games. That's just odd.

But it appears to speak to a larger issue at Netflix, one that is less about quality of product and more about an inability to align its pricing and messaging, and, perhaps now, user experience when it comes to getting at these games through the Netflix mobile app, with consumer demand.

Netflix is currently facing a problem with keeping users. Since the beginning of this year, the streamer has lost 1.2 million subscribers. In response to downward trending numbers, Netflix has cut jobs, spending, and canceled shows. Building and supporting a library of games that can compete with Game Pass or Apple Arcade isn't cheap.

For example, earlier this year, Netflix paid over $70 million to buy up the studio behind a Stranger Things puzzle game. That ain't nothing and in a time when the company is looking to cut costs and compete against other steamers, it's questionable how long it will continue to finance this gaming experiment.

If I had to put my chips anywhere, I'd guess that by the end of 2023 there won't be a Netflix gaming offering unless something massively changes. Netflix would need to cease bleeding subscribers, would need to rework how subscribers get these mobile games (or stop siloing them with subscribers), and would have to increase the number of games on offer while still maintaining or increasing their quality.

That is what is called a heavy lift" in the gaming industry.