Netflix has outlined its strategy around gaming, and the company is going big. The streamer said during its latest earnings briefing that it has 80+ games in development currently, with the aim of releasing at least one new game per month into the Netflix Stories app.

Netflix co-CEO and president Greg Peters began by telling people why Netflix is involved in gaming in the first place, and that's to make money. He said the global gaming market, minus Russia and China, accounts for $150 billion in annual revenue--and that's also excluding revenue from ads. A key differentiator for Netflix's video game releases is that they have no microtransactions or ads. Peters, however, alluded to the possibility of ad-based games in the future, saying ad-based revenue for games is not part of the "current" Netflix model. He didn't rule anything out for the future.

Netflix Games launched around three years ago, and so far, Peters said Netflix "happy with the progress" that the company has seen. "We've set ourselves pretty aggressive engagement growth targets. And we've met those, exceeded those in many cases," he said.

The impact of Netflix Games on Netflix's overall business remains "quite small," Peters mentioned, adding that Netflix's investment level in games relative to its overall content spend is also "quite small." In 2022, it was reported that less than 1% of Netflix's userbase has played a game on the platform. Starting slow was always the plan, Peters said, but growth is expected in the future.

"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," he said. "I think you've seen this trajectory with us before, whether it's been a new content genre like unscripted or film or maybe getting the content mix right for a particular country, you can think about Japan or India, which we're now in an amazing place through the hard work of our teams there. We continually iterate. We refine our programming based on the signals we get from our members."

Netflix has released more than 100 games thus far, and the company has taken aboard learnings from this so far in terms of "what works, what doesn't work."

"We're refining our program to do more of what is working with the 80-plus games that we currently have in development," Peters said.

The executive went on to say Netflix users are particularly enjoying "interactive narrative games," which are good for business, too, because they are "easier to build," Peters said. These games are part of the Netflix Stores hub, and some of the top releases have been the games based on the series Virgin River and Perfect Match.

"Starting this month in July, we're going to launch about one new title per month into Netflix Stories, and this is amazing IP like Emily in Paris and Selling Sunset. And we have lots more, including very different types of games yet to come in the quarters and years ahead," he said.

Netflix co-CEO Ted Sarandos added that the company is particularly excited about games because they represent a rare opportunity to give fans of a Netflix property even more ways to engage with it between seasons of the show. He also teased that perhaps one day a Netflix game will include characters and storylines that could pay off in the next season of a show or a movie sequel.

"I think our opportunity here 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 materialize in the next season or in the sequel to the film," he said.

One of Netflix's next big game releases is a Squid Game multiplayer game coming this year alongside Season 2 of the popular show. Beyond that, former Halo and Destiny boss Joseph Staten is working with Netflix on a AAA multiplatform game.

One of the most high-profile releases for Netflix Games so far was Grand Theft Auto: The Trilogy - The Definitive Edition, which came to the catalog at the end of 2023.

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