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Netflix Enters the Gaming Market, But Only 1% Participate Daily

In November 2021, Netflix launched Netflix Gaming with five titles out of the gate. It has since grown its library of games to the current offering of over two dozen titles, with ambitions to offer 50 titles by the end of 2022. Netflix currently has about 221 million subscribers globally, but according to data from the app tracking software Apptopia, only 1.7 million of those users are accessing Netflix’s library of games per day – less than 1 percent of the streaming giant’s subscribers.

Paul Erickson, Research Director of Entertainment and Consumer Electronics at Parks Associates, commented on the discrepancy, stating, “The primary, fundamental reasons are that its game portfolio is relatively new, and that Netflix is a company known for streaming video entertainment, not gaming – neither the brand nor the service resonate with the public as a known quantity when it comes to gaming.”

When asked about whether Netflix should be concerned about these numbers, Erickson replied, “Netflix should continue to be vigilant and observant of consumer response as it builds out its still-nascent games portfolio, but I don’t believe it should be overly concerned. The company is playing the long game when it comes to being a provider of connected entertainment, and it is learning its subscriber base’s habits as it progresses. It is still early for its gaming aspirations, and I don’t believe that its current play with mobile apps is the end of its gaming strategy – only the initial stage.”

Netflix is the first streaming video service to offer gaming as an included part of its subscription. “Their play remains unique within the space. It is unlikely there will be competition for some time; many who might be interested are almost certainly waiting to see how Netflix fares before committing their own capital to a similar strategy,” said Erickson.

Netflix’s current gaming strategy is based on standard downloadable apps for mobile devices, but has been actively surveying subscribers and investigating the prospect of also delivering cloud gaming to devices such as game consoles and smart TVs. The service’s potential expansion of its gaming strategy may come at a good time, as the service looks to reinvent itself and expand its subscriber base.

Parks Associates’ data from a recent industry report written by Erickson, Evolution of Gaming: The State of Cloud Gaming, revealed that 35% of households found cloud gaming appealing or extremely appealing.

Together, this puts Netflix in an optimal position to offer something other video streaming services are not and potentially persuade subscribers to stick around – if the streaming service can effectively incorporate gaming into the Netflix brand and begin resonating with the public.

To stay up to date on the ever-evolving North American OTT video services market, subscribe to Parks Associates’ OTT Video Market Tracker.

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