Netflix is Expanding to PC Titles Despite Weak Demand for Mobile Games

It’s been over a year since Netflix first ventured into video games. Starting with a stream of mobile titles based on its hit TV shows like “Stranger Things” or “The Queen’s Gambit,” the streaming colossus hoped that it could extend the life of its most popular properties while also making some extra cash by capitalizing on the record-breaking gaming sales earlier in the pandemic.

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But the markets have changed drastically since last summer, and Netflix is finding that it’s hard to get gamers to keep playing.

Overall spending on video games and hardware is trending downward, and industry analysts at NPD Group reported that consumers spent 9% less on mobile titles this quarter. Plus, in August, third-party analytics firm Apptopia estimated that only 1.7 million people were engaging with Netflix’s games—less than 1% of its global subscriber base of 221 million.

So it’s clear why Netflix executives are rethinking their strategy on gaming. App analysis from SensorTower indicates Netflix had only 11 million game downloads less month. Netflix didn’t immediately respond to dot.LA’s request to verify this count.

The company, however, is hoping that a “brand-new AAA PC game” could boost downloads and lure in a more loyal, hardcore gaming crowd. No doubt inspired by the recent blockbuster sales at Activision Blizzard – its “Call of Duty: Modern Warfare 2,” game netted $800 million in its first three days of sales – Netflix is now targeting a live-service shooter title for PC, led by a former Blizzard producer Chacko Sunny.

In addition to having 55 games in development, earlier this year Netflix also went on a spending spree earlier this year, buying up gaming studios and recruiting them to develop games under the Netflix Games banner. At a conference in May, Netflix Vice President of Games Mike Verdu promised a crowd “richer and deeper experiences,” including cloud gaming titles that could draw in a new generation of gamers.

Details on the upcoming PC title are sparse and there’s no release date yet. But for once, it’ll be a true Netflix Original game.

It helps too that Netflix didn’t expect this first year expanding into gaming to go seamlessly. In its recent third quarter earnings report the streamer said “our first year was about establishing our gaming infrastructure and understanding how our members interact with games.”

Clearly, the company has the cash to invest in this new venture. But given that the top-selling games last month were all from big-name console and PC developers like Activision, Warner Bros., EA and Ubisoft, Netflix will have a steep hill to climb to catch up.