Streaming giant Netflix Inc (NASDAQ: NASDAQ:NFLX) has seen its base of subscribers decline in 2022. Video games and an ad-supported plan could be among the growth areas for the company. A new report shows the company’s early role in the video game sector might be underwhelming.
What Happened: Data from Apptopia shows that Netflix has 1.7 million daily active users for its mobile games and has seen 23.3 million downloads for its games since launching in November 2021. Data shared by CNBC highlights that 99% of Netflix users have not tried mobile games from the company yet.
Netflix was rumored to be exploring the games space in early 2021 and released its first five games in November 2021. The company now has over two dozen mobile games available for users to play for free.
Games include a take on the Exploding Kittens card game and a “League of Legends” spinoff called “Hextech Mayhem” in partnership with Tencent Holdings (HK:0700) ADR (OTC: TCEHY).
Android users can download Netflix games from the Google Play Store from Alphabet (NASDAQ:GOOGL) Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) or directly from the Netflix app. Apple Inc (NASDAQ: NASDAQ:AAPL) users have to download the games from the iOS store and are redirected from the Netflix app.
The latest data comes after Apptopia showed eight million downloads for Netflix games in January and SensorTower showed 13 million downloads in June, according to The Verge. Games based on the Stranger Things franchise from Netflix were among the company’s top mobile titles.
The company has a planned game coming based on its successful “The Queen’s Gambit” show as well.
Netflix is using a strategy of releasing games based on its own hit shows along with some other titles.
Related Link: Netflix Turns To Video Games Again, Making Mega Man Movie
Why It’s Important: Netflix has acquired several video game companies as part of its gaming strategy, which was highlighted by CEO Reed Hastings on an earnings call earlier this year.
“We’ve been doing these small acquisitions to build up the know-how and the creative chops to be able to make some really great gains,” Hastings said.
The company plans to have 50 games live by the end of 2022 as part of its gaming push.
Netflix ended the second quarter with 220.67 million subscribers, down from 221.64 million in the first quarter. After posting its first quarterly subscriber loss in over 10 years in the first quarter, Netflix has now posted two straight quarters of subscriber losses.
Gaming has been listed as one of the company’s key catalysts to expand its growth outside of domestic streaming subscribers. The new figures could show the company is still in the early days of getting people excited about its games and may need to rethink its gaming strategy.
NFLX Price Action: Netflix shares are down 2.12% to $228.53 on Tuesday afternoon at publication.
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