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Netflix is pioneering a new subscriber-retention strategy through gaming apps.

Date

06/12/2021

Written by

Airnow

There were some raised eyebrows at the start of November when Netflix announced that it was launching a new gaming service across both iOS and Android. At launch, Netflix subscribers gained access to five mobile games: Stranger Things: 1984 (BonusXP), Stranger Things 3: The Game (BonusXP), Shooting Hoops (Frosty Pop), Card Blast (Amuzo & Rogue Games) and Teeter Up (Frosty Pop). However, in the days since its launch, Netflix has expanded its lineup with two more games - Bowling Ballers and Asphalt Xtreme.

To play, all you need is a Netflix subscription. There’s no ads, no additional fees and no in-app purchases. Bowling Baller is the latest game from Netflix’s gaming partner, Frosty Pop, the creators of Shooting Hoops and Teeter Up. It’s another one of those addictive hyper-casual games, described as an “endless runner” - so think Temple Run but with a bowling ball rather than a character pulled straight out of Jumanji.

The other latest edition, Asphalt Xtreme, is a re-release of a fairly popular Gameloft title from a few years ago.

The video game features a lineup of rally cars, monster trucks and a vast amount of snowy tracks and mud.

Asphalt Xtreme was shut down entirely on September 30th 2021 by the developers after over five years of activity as the title was no longer generating enough revenue. However, Netflix, seeing an opportunity to add a solid game to its repertoire without the need to profit from the game, directly licenced the title from Gameloft to add to its mobile gaming collection.

This format of an all-access “gaming subscription”, where a user pays a monthly subscription for a selection of games, has swelled in popularity in recent years. Various competitors have made their own iterations of cloud gaming services such as Microsoft’s Xbox Cloud Gaming, Google’s Stadia and Apple’s Arcade.

For Netflix, their gaming service is not intended to be a fully fledged business proposition like Google’s or Amazon’s. Instead, it is used as a means to maintain and grow its current paying subscribers by offering consumers a different type of entertainment beyond its TV shows and movies.

Netflix subscribers can browse through Netflix as usual, but now games will also be listed, with directions for the user to download them as free apps on their mobile devices.

As we have covered in The Battle of the Streaming Apps, all the streaming service giants (Netflix, Disney+, Amazon Prime, HBO Max and Apple TV) saw parabolic rises in subscribers in 2020. While this of course is a great position to be in, their attention is now turning to creating ever more inventive ways to retain these new users.

The obvious strategy is to offer more entertainment in the form of big IP TV shows and films, as many of the streaming apps have done. However, Netflix’s move to incorporate gaming into its service in order to boost the overall proposition is an interesting hedge that's bound to raise a few eyebrows in the industry. According to Airnow sources, in November, Netflix’s AVG D30 RETENTION grew by 1.9% - an early positive signal for their new strategy.

The question is, will other streaming services follow suit? And how long until they do?