Netflix Has Aggressive Growth Plans With More Than 80 Games in Development

More than 80 games are being developed at Netflix, which are intended to be more closely based on Netflix franchises, although different types of games are meant. The commitment to growth looks good for 2024, and the company has set a 'more aggressive growth goal' for 2025 and 2026.

Complementing the quarterly announcements, Netflix Co-CEO, President & Director Gregory K. Peters spoke to investors about the status of the gaming initiative. "Games is a big market. It's almost $150 billion ex China and Russia, and not including ad revenue, which we aren't participating in, in our current model," Peters said. The company is approaching the three-year mark of its gaming initiative, and it is pleased with the progress has been made so far. "We've had set ourselves pretty aggressive engagement growth targets. And we've met those, exceeded those in many cases. In 2023, we tripled that engagement. We're looking good in our engagement growth in '24, and we've set even more aggressive growth goals for '25 and '26."

But he said that the impact of games in the overall business of Netflix is still quite small, as is the level of investment in games relative to Netflix's overall content spend. "And we've calibrated the growth in investment with the growth in the business impact. So we're being disciplined about how we scale that. So now obviously, the job is to continue to grow that engagement to the place where it has a material impact on the Business," Peters said.  "We continually iterate. We refine our programming based on the signals we get from our members. And if you look over several years with that model, we can make a huge amount of progress."

Netflix has launched over 100 games so far. "We've seen what works, what doesn't work. We're refining our program to do more of what is working with the 80-plus games that we currently have in development." As mentioned in the quarterly report, this means that Netflix will launch more games based on its own IP, preferably in the same timeframe as the launch of new series or seasons. The company plans to focus primarily on interactive narrative games. "These are easier to build. And we place those in a narrative hub that we call Netflix Stories," Peters said and cited the already launched Virgin River and Perfect Match as examples. "Starting this month in July, we're going to launch about 1 new title per month into Netflix Stories, and this is amazing IP like Emily in Paris and Selling Sunset. And we have lots more, including very different types of games yet to come in the quarters and years ahead."

Theodore A. Sarandos, Co-CEO, President & Director Netflix, added that it's pretty rare "for the new content vertical like this to actually complement or draft off of each other. (...) But I think our opportunity here to serve super fandom with games is really fun and remarkable. I think the idea of being able to take a show and give the superfan a place to be in between seasons and even beyond that, to be able to use the game platform to introduce new characters and new storylines or new plot twist events, now you could do those kind of things and then they can then materialize in the next season or in the sequel to the film. It's a really great opportunity and a rare one where 1 and 1 equals 3 here. And to kind of replicate some of the success we've seen building fandom and with live events and consumer products, this actually fits really nicely into that."

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