Netflix Might Introduce Ads To Its Games

Netflix is actively considering ways to monetize its in-app games marking a significant shift in strategy, a new report from the Wall Street Journal reveals.

These proposed ideas include in-app purchases, charging for more advanced games currently in development, or providing games to subscribers on the newer ad-supported tier with advertisements up for consideration, insiders reveal.

The company, which introduced games into its platform last 2021, is currently offering its games free of charge to all subscribers, as it aims to retain users during content breaks between their favorite shows and attract new audiences.

In recent months, Netflix executives have engaged in talks revolving around revenue generation from the gaming segment, exploring options to capitalize on the growing interest in interactive entertainment.

This potential shift represents a departure from Netflix's traditional stance of refraining from incorporating ads or in-app purchases in its games.

Netflix Co-Chief Executive Greg Peters emphasized the company's commitment to offering a unique gaming experience, free from monetization pressures, during an investor presentation in April.

"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," Peters explained.

While the number of users downloading Netflix games continues to grow, it remains a relatively small percentage of the global subscriber base, with less than 1% of Netflix's global subscribers engaging its games daily, based on Apptopia's estimates from October.

Netflix Stepped Into Gaming Space In 2021

Netflix made its gaming debut in November 2021 with "Netflix Gaming," a dedicated tab within the app offering mini-games like Stranger Things: 1984, Stranger Things 3: The Game, Teeter Up, Card Blast and Shooting Hoop.

This year, the company initiated talks about expanding its gaming presence, conducting beta tests in Canada and the U.K. Users in the beta test enjoyed titles like Oxenfree and Molehew's Mining Adventure on devices like Amazon Fire TV, LG TVs and Nvidia Shield.

One of the key factors that sets Netflix apart from competitors in the gaming space is its unconventional approach to controllers.

Netflix VP of Games Mike Verdu highlighted the use of phones as controllers for TV gaming, saying that "to play our games on TV, we're introducing a controller that we already have in our hands most of the day — our phones."

In November, the video streaming platform was reportedly exploring "higher-end games" that users can play on PC or TV.