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Netflix aims to ramp up its investment in gaming as it continues to plan out its future in the segment, says co-CEO Gregory Peters.
In the streaming firm’s earnings call for its Q2 financials, Peters said the funds pumped into games is still quite small compared to its overall content investments.
The division has been underoing restructuring follow a change in leadership last year and a new strategy.
“We want to remain disciplined in not investing too far ahead of demonstrating that we know how to translate that investment into value for our members,” he said, highlighting progress in the segment with the GTA titles and Squid Game: Unleashed.
The GTA trilogy are some of the firm’s most downloaded titles on mobile, with San Andreas accumulating an estimated 51 million installs, according to AppMagic. Vice City and GTA III have both been taken offline after generating 9.7m and 4.3m downloads, respectively.
Squid Game Unleashed, meanwhile, has been installed more than 25m times.
Evolving monetisation
Peters said Netflix will continue to licence games and develop its own titles. He also teased a “whole new set of interactive experiences” that will be released over the next year.
Asked about monetisation opportunities, the co-CEO said it remained open to evolving its model.
Games are currently free to download and play for Netflix subscribers without in-app purchases or ads. The latter has proven a key growth opportunity for the streaming firm’s revenue across its film and TV content.
“But we have got to get to a lot more scale before that becomes a really materially relevant question,” said Peters.
“So we’re going to do that work first. And it’s probably worth restating the TAM for this market is very, very large. We remain convicted about our strategic opportunity and excited to make more progress.”
He added: “We look at the near-term monetisation opportunity with games very similar to how we’ve looked at other new content categories.
“You can think in scripted or film or on and on. And that’s essentially, if we deliver more value to our offering, we get increased user acquisition, we get increased retention, we get increased willingness to pay. So it drives all of the sort of core fundamentals of our business.
“We’ve seen those positive effects, albeit in a small way relative to the size of our overall business when it comes to members playing games on the service. We already have those positive proof points.”
Investors underwhelmed
In Q2, Netflix revenue rose 15.9% year-over-year to approximately $11.1 billion. It forecasted 17.3% Y/Y growth in Q3 to $11.5bn.
Full year revenue guidance increased to $44.8bn to $45.2bn, up from $43.5bn to $44.5bn.
The firm put the forecasted rise down to the weakening dollar. Shares declined 3.3% by the stock market closed on Friday, July 18th.
