Netflix considers adding in-app purchases and ads to games, report says

05.01.2024 - 21:19 / techcrunch.com

For two years, Netflix subscribers have been able to download tons of mobile games, all included for free with their subscription. Netflix has developed more than 75 mobile games, boasting popular IPs like Grand Theft Auto, Love is Blind, Monument Valley, and Oxenfree, among many others.

Now, Netflix could potentially be exploring ways to generate revenue from its gaming business, a recent report suggests.

According to The Wall Street Journal, the company has had discussions about how to make money from its games for months now, including in-app purchases, putting a price tag on more premium titles and placing ads on games that subscribers to its ad tier have access to. These methods are common (and effective) in the mobile gaming world, with consumers expected to spend $111.4 billion on mobile games in 2024.

Netflix declined to comment to TechCrunch.

A discussion doesn’t always lead to action, so the company may decide to pivot away from monetizing games. Netflix appeared to shut down the idea of ads and in-game payments during an earnings call in April 2023.

“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,” Netflix co-CEO Greg Peters told investors.

Plans do change, though. After all, Netflix was initially against launching an ad-supported tier and cracking down on password sharing, yet reversed its decision after losing thousands of subscribers in 2022, marking its first subscriber loss in over a decade.

Plus, the move to monetize games would make sense for the streamer since its growth stagnated at the beginning of 2023, laying off 3% of its workforce as a result. Netflix also recently increased its prices again, with the premium plan now costing $22.99 per month for new U.S. customers.

Also, Netflix posted a job listing in 2022 for a game director to work on an AAA PC game, which can be a considerably expensive project in the video game industry. The UK Competition and Markets Authority (CMA) reported that AAA games can have development budgets of $200 million or more. Netflix has reportedly discussed charging money for their future high-budget games, WSJ wrote, adding that analysts determined Netflix has spent approximately $1 billion on acquiring gaming studios and overall investing in its gaming business.

Netflix gets a major win with GTA: The Trilogy coming to its mobile games roster