Netflix May Monetize Its Games Platform with In-App Purchases and Ads

Renowned streaming giant Netflix is allegedly looking into new ways to make money as it prepares to add in-app purchases and adverts to its gaming platform. The business has been having constant conversations about ways to monetize its gaming platform. For the past two years, a ton of mobile games have been available for free download for Netflix subscribers.

Netflix games might introduce ads and in-app purchases

Since entering the market, Netflix has increased its presence in the gaming industry and released a significant number of games. Since players have paid for the premium membership, the game is free of charge. However, the company is looking to change its current business model. In recent months, internal discussions have been held to discuss how to proceed with this plan. Netflix has been investigating different approaches to making money off its gaming platform. These consist of choices like implementing in-app purchases, setting a price for premium games, and adding advertisements to games that are available to subscribers in the ad tier.

The company has over 75 mobile games available, including Grand Theft Auto, Love is Blind, Monument Valley, and Oxenfree. The report claims that Netflix intends to charge for premium game titles and monetize game placement. The business declared last year that it didn’t worry about in-game and advertisement payments. In the world of mobile gaming, where consumers are predicted to spend $111.4 billion on games by 2024, these strategies are widespread (and successful).

Netflix games in public tests

Netflix has also established studios in Southern California and Finland, as well as acquired several IPs and development facilities. Additionally, there are rumors that the company is working on a PC game, which may be the reason it needs to increase revenue to finance the project and make more investments in the company. It would be a significant departure from the current revenue model if it proceeded with this plan and put the aforementioned into practice. As it stated during the April 2023 earnings call that it does not want to add in-app purchases and advertisements to the games on the platform, Netflix has so far offered all of the games for free.

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Current games hosted by Netflix

There are 86 games on Netflix right now. Furthermore, there are almost 90 more in development, some of which are based on Netflix’s original series. Over the previous year, the company released about 40 games, including third-party games like Football Manager 24 Mobile, and developed titles like Oxenfree 2: Lost Signals and Netflix Stories: Love is Blind.

Grand Theft Auto: The Trilogy – The Definitive Edition, which the company released last month, also brought the well-known GTA franchise to the platform. The company is creating video games based on the well-liked television program Squid Games. In this viewers will engage in competitive gameplay. Additionally, Super Evil Megacorp is developing a game based on the recently released Netflix film Rebel Moon, and a game based on Money Heist was just released.

Slow Netflix games subscriber rate 

However, not many people have played the games and their adoption has been sluggish. Only 1% of subscribers played the games, according to data that was made public after the service’s first year of launch. This percentage hasn’t changed much. Even after more games have been launched, and despite Netflix Games having spent close to $1 billion, the company intends to increase revenue to succeed with these new concepts.

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Netflix’s recent password-sharing stint

According to the report, the streaming service originally opposed enforcing strict password-sharing policies and launching an ad-supported tier. For the first time in more than a decade, they lost thousands of subscribers in 2022. This led them to rethink their decision. It would make sense for Netflix to include in-game purchases and advertisements to monetize its game content. At the beginning of 2023, the company’s growth slowed, which resulted in a 3% reduction in its workforce.

Here’s what they said

Netflix co-CEO Greg Peters says the company wants to provide a unique gaming experience. It will provide creators with the flexibility to make games that are only intended for player enjoyment. They will be free from the worry of other revenue streams like in-game purchases or advertisements.

We want to have a differentiated gaming experience and part of that is giving game creators the ability to think about building games purely from the perspective of player enjoyment and not having to worry about other forms of monetization, whether it be ads or in-game payment.

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