Exclusive: Netflix says gaming is a long-term bet, happy with low-key start

What they're saying: "Netflix doesn't make a lot of big bets," Verdu says. "The company's been patient around those bets and put the work in to get it right. And this is one of those."

• "It's not, you know, put your finger in and dabble a bit. You make a commitment, and you do it right."
• "We're really pleased with the traction that we've had so far," he says. "Members are discovering games. They're enjoying them. And and the number of people playing is growing"

Context: Last month marked the second anniversary of Netflix as a gaming provider. The company has released more than 80 games — all free to subscribers and exclusive to mobile.

• In that time, Netflix has built two game studios and purchased four others. In a year of thousands of game industry job cuts, Netflix's gaming teams have had none, Verdu says.
• The company now has more than 10 games in development in-house and, through deals with external teams, a total of 90 in the works, says Verdu.
• Existing titles range from indie darlings like Into the Breach and Storyteller to Netflix spinoffs of the hit Love is Blind and Too Hot to Handle.
• Verdu called that last one an "upside surprise," as users seemed to enjoy "playing a game where you can, like, immerse yourself in that show." (A Squid Game video game spinoff is also forthcoming.)

Between the lines: The streaming giant has more than 240 million global subscribers, but it doesn't say how big its game team is or even how many times its games have been downloaded.

• The numbers crunched by outside firms indicate that only a tiny percentage of Netflix subscribers are downloading games. The company's offerings, promoted mostly through a carousel of titles in Netflix's mobile app, are easily missed.
• "We're not going to do a giant marketing campaign to say, 'Games are on Netflix,'" Verdu says.
• Why not? "The games live inside of Netflix, which has a huge distribution footprint, for sure. The key is to connect our members with the games that they'll enjoy. And it doesn't have to come all at once."

Zoom in: Over the last two years, Netflix's gaming operation has slowly become more, well, Netflix-y. Games tied to Netflix shows have increased and will expand even more thanks to some of its first-party studios. (Verdu stresses that non-Netflix IP will continue to be part of the portfolio.)

• It has tested streaming games to subscribers' TVs and computers, as it does its shows, with players using an app that turns their phone into a game controller.

• "The results are encouraging, but it's on a very small scale and it's going to be a while before you see that deployed much more widely," Verdu says.
• It has begun harnessing its famous algorithms to offer personalized gaming recommendations.
• It's even removed a couple of games from its library. "I would expect to see movement in and out of the catalog," Verdu says.

The intrigue: Netflix has also announced that its new Los Angeles studio, helmed by developers who've made big-budget console games, is making a AAA (industry jargon for big-budget) game for PCs.

• "If you fast-forward into the future when we do have a gaming experience that's frictionless and ubiquitous and very approachable, then you know we're going to want to serve up some core experiences on that platform," Verdu says.

💭 Stephen's thought bubble: A Netflix gaming offering that is "frictionless and ubiquitous" is one that streams games onto any screen. That will put Netflix in direct competition with gaming's traditional powerhouses in the console and PC market.

What's next: Netflix gaming won't have a quiet Thursday, when it will release three iconic Grand Theft Auto titles from Rockstar Games on mobile, exclusively to its subscribers.

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