The rent-games-by-mail service just got another major competitor. GameFly, which has been in the rent-by-mail business revolving around video games will start seeing Qwikster as a rival. For a quick refresher, Netflix has now broken up into two different models: Netflix, which will exclusively serve as a streaming service as before, and Qwikster, which will be serving as the “old” business model of sending physical media to customers via the postal service. In addition to films, Qwikster will also start sending out video games. Let the game begin.

Xbox 360 started being able to stream Netflix back in November and eventually, the PlayStation 3 and Wii joined in and finally were able to forgo having to use a disc to enable the service. Video game consoles being able to stream Netflix to living rooms resulted in a huge jump in use for Netflix, which helped contribute to why the service has been split in two.

The split between the two services could be seen as an unusual business shift, but seeing how many people have been using Netflix for streaming media to their consoles or Netflix-enabled devices, it’s not something that should be surprising. For a more detailed explanation, read what the CEO of Netflix had to say. That being said, how will GameFly, the leading online rental outlet for video games be viewing this encroachment on their territory? With a rather cool head, actually.

Before getting onto the official statement, let’s postulate the actual demographic who already possess Netflix and/or Qwikster. Folks were given the choice to either go one way or the other for streaming or physical media – or both for an additional price. It would be fair to say that gamers who were using their Netflix account to stream to their consoles will be staying on that side of the house. Families who might not have a Netflix-enabled device might opt to use Qwikster because that’s what they were used to and they can still get their smile-inducing red-envelope in the mail. Now, if someone who’s using Netflix already has a GameFly account, is one business really winning over the other one? Why would they switch?

Anyway, on to the official words from GameFly!

“GameFly has expanded steadily over the past nine years by focusing exclusively on video gamers. We are the only retailer offering games physically and digitally for both rental and purchase. Gamers can try before they buy, choosing from new releases and classic titles that span the last decade. GameFly has more than 8000 games for 10 console and handheld systems to choose from, and over 1500 Windows/Mac games are available for download.

GameFly is the leading video game rental service, and we have continued to grow even as Blockbuster and Redbox increased their investment in console games.”

The first half of that statement isn’t really news to anyone who already is using the service. The latter part however, does reflect how successful the service has been in the oncoming emergence of Blockbuster and Redbox’s entry into that market. However, looking at something like Redbox, which is a first come-first serve basis, it’s hard to measure against a service that mails out to people and provides queues.

Qwikster and GameFly should see some fluctuations in business sooner or later, in terms of the subscriber growth. But as talked about earlier, people who might already possess an account with both companies might just keep it that way. They might save a few bucks by activating a Qwikster account, but it might not be enough to justify the “hassle” of transitioning to another service.

The other important factor is the built-in infrastructure Quikster already possesses, with far, far more distribution centers and hence, quicker delivery of rentals. That along with the prices will be the key factors. Don’t be surprised to see Qwikster offer insanely good video game rental discounts to begin, much like how they lured in millions of streaming users before announcing the separate price on that service.

What do you have to say on the matter? Do you have an account with one service, the other, or both? Has the business model changed anything for you?

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Source: Joystiq