Venturing into the gaming industry! Netflix considers strategic transformation to gain new profits from video games.

Netflix, the streaming media giant, is planning to further diversify its business and generate new profits from the gaming industry.

According to The Wall Street Journal, Netflix executives have been discussing how to generate revenue from gaming in recent months.

Some ideas that have been discussed by Netflix management include in-app purchases, charging for more complex games currently in development, or offering ad-supported games for users who purchase low-cost advertising packages.

If these measures can be implemented, it would signify a major shift in Netflix's business. The company has previously emphasized that it would not include in-app purchases or advertisements in its games.

It should be noted that Netflix has always openly discussed its corporate strategy, but this does not mean that the decision to monetize games will be implemented.

Netflix entered the gaming industry several years ago, mainly with small games based on popular shows as a supplement to the content, serving to attract fans and maintain interest. These games are all available for free.

Currently, Netflix's user base in gaming is still relatively small. According to Apptopia, as of October, less than 1% of Netflix's total user base played games on a daily basis. According to Sensor Tower, Netflix's global downloads last year reached 81.2 million, nearly triple the 28.7 million in 2022. However, this is far from the hundreds of millions of downloads achieved by major game companies.

In the past few years, Netflix has acquired some small game studios and started producing more games focused on its own shows and movies. Its most popular original game, "Too Hot to Handle: Love is A Game," was launched in December 2022 and has been downloaded approximately 7 million times.

Analysts estimate that Netflix has spent around $1 billion on acquiring game studios and establishing its gaming business, compared to an annual expenditure of around $17 billion on shows and movies.

However, job postings indicate that Netflix is actively recruiting gaming executives, with one position responsible for overseeing the development of Netflix's first "AAA game." As is customary, the production cost of such games can reach hundreds of millions of dollars.

In April last year, Netflix Co-CEO Greg Peters stated during an earnings call that they hoped to create a pure gaming experience for Netflix players. He pointed out that the Netflix design team creates games solely from the perspective of player enjoyment, without considering monetization through advertising or in-app purchases.

In an earlier article, Wall Street News pointed out that in an inflationary year, the cost of living for Americans is high, and it is becoming increasingly difficult for streaming services to retain customers. Many companies are under tremendous pressure to reduce costs and increase efficiency, while also trying to lower service prices and improve value for money in order to survive in the market. Although Netflix's business performance is still relatively good compared to its competitors, it also faces tremendous pressure to improve profitability.

For example, Netflix was previously reluctant to crack down on password sharing and introduce ad-supported subscription tiers due to concerns about consumer experience, but later reversed its stance due to performance pressure.

Therefore, it is not surprising if Netflix's gaming strategy also undergoes a transformation against the backdrop of intensifying streaming competition.