How Netflix’s co-CEOs are calibrating games investment growth with its business impact

Engagement with Netflix games continues to have a small impact on the streaming giant’s overall business despite tripling growth last year, the co-CEOs of the firm have said.

Speaking to investors, Gregory Peters and Theodore Sarandos provided some insights into the company’s gaming ambitions and the level of investment they are prepared to make in the sector.

Peters claimed that the company, which launched its games division nearly three years ago, set out “pretty aggressive engagement growth targets” from the outset. He said the company had since met and exceeded those goals “in many cases”.

“Aggressive growth goals”

Last year, the company tripled engagement with games, and Peters noted the company was “looking good” for 2024 growth. He suggested Netflix plans to stick with games for the long-term, having set “even more aggressive growth goals” for its games arm for 2025 and 2026.

Last year Netflix splashed out on bringing the GTA trilogy Definitive Edition – which includes GTA 3, GTA: San Andreas and GTA: Vice City – to Netflix. The titles have generated more than 33 million downloads to date, according to AppMagic estimates.

It’s worth noting that Netflix has yet to publicly state exactly what engagement levels it has or what its goals are. The firm’s VP of games Mike Verdu, who was leading the division, recently stepped away from the role, with the company now searching for a replacement.

“[It’s] worth noting that, that engagement and that impact on our overall business at the current scale, it’s still quite small,” said Peters.

“And it’s also probably worth noting that the investment level in games relative to our overall content spend is also quite small. And we’ve calibrated the growth in investment with the growth in the business impact. So we’re being disciplined about how we scale that.

“So now obviously, the job is to continue to grow that engagement to the place where it has a material impact on the business.”

Super fandom

To date, Netflix has launched over 100 games on its subscription service, and has more than 80 games in development.

Peters noted that one of its focuses right now is in the interactive fiction space, particularly through Netflix Stories, which he claimed are “easier to build”. Historically, successful titles in the space require regular updates to ensure they keep up with player consumption and avoid churn.

Co-CEO Sarandos added that the opportunity he sees for Netflix is to “serve super fandom with games is really fun and remarkable”.

“I think the idea of being able to take a show and give the superfan a place to be in between seasons and even beyond that, to be able to use the game platform to introduce new characters and new storylines or new plot twist events, now you could do those kind of things and then they can then materialise in the next season or in the sequel to the film,” he said.

“It’s a really great opportunity and a rare one where one and one equals three here. And to kind of replicate some of the success we’ve seen building fandom and with live events and consumer products, this actually fits really nicely into that. So I’m really excited to see where this goes.”

We recently caught up with Netflix Stories director of story Sarah Springwater to discuss how the streaming giant is using interactive fiction to engage with fans of its shows – and also bring in new ones.

Last month, PocketGamer.biz also spoke with VP of External Games Leanne Loombe about the entertainment firm’s plans for games and why it remains a “long-term bet” for the company.