When you visit the Help Center page for Netflix Games on the streamer’s website, the first bullet point says: “No ads. No extra fees. No in-app purchases.” All three promises might be broken in the near future as Netflix looks for new ways to generate revenue.
According to The Wall Street Journal, Netflix executives are determined to make money from the mobile games they have been giving away for the past two years. Currently, every title on Netflix Games is fully free for subscribers. Netflix even retroactively removed all of the in-app purchases and ads from some of these games before relaunching them as part of the service. You couldn’t pay for more levels or new characters even if you wanted to.
In order to start turning a profit on games, Netflix executives have floated ideas such as adding back in-app purchases, charging for bigger releases, and placing ads in the games for Netflix subscribers on the Standard with ads plan.
As the report notes, this wouldn’t be the first time Netflix has reversed course on long-standing policy. For years, the company resisted ads, but once growth stalled out, an ad-supported plan was quick to follow. The same was true of Netflix’s password-sharing crackdown.
Personally, I was always rather confused about Netflix’s long-term plans here. In-app purchases are the bread and butter of the industry. Free-to-start games with IAP, like Honor of Kings, PUBG MOBILE, Pokemon Go, and Genshin Impact generate hundreds of millions of dollars every year through nothing but these transactions.
As appreciative as I am that I can get Dead Cells, Grand Theft Auto: San Andreas, and Terra Nil for free with my subscription, I never understood how it made sense for Netflix. Now, it’s starting to sound like the reason I couldn’t figure it out is because it never did make sense.
For better or worse, if Netflix wants its mobile games to generate revenue, bringing back in-app purchases is all but necessary. As flashy as the addition of three Grand Theft Auto games might be, it’s not going to move the needle for anyone on the fence about joining or dropping Netflix. On the other hand, if Netflix had its own Pokemon Go, Honkai: Star Rail, or Candy Crush Saga, it might actually become a measurable percentage of the company’s revenue.
