Netflix, the mega streaming and DVD-to-mail rental service, has been on a roller coaster of a ride in the public spotlight as of late. With the announcement that its mail order business would be split into a separate entity, Qwikster -- a project abandoned not even a month later -- Netflix dug themselves into a public relations nightmare. Now the company is uncertain whether or not they should go through with plans to offer video game rentals, as well.
In the video gaming community, many saw the company split as a positive when Netflix announced that Qwikster would rent games for Wii, PS3 and Xbox 360 systems. Video game rental service GameFly claimed not to be scared of competition from Netflix. Earlier this month, Netflix abandoned Qwikster, but somehow forgot to mention one little detail: would they still push for video game rentals?
After a few weeks of letting the dust settle, CEO Reed hastings offered an update to his investors this past Monday:
"We have yet to decide whether or not to offer video game discs. The decision will have little financial impact either way…Members have been asking for video games for many years, and now that DVD by mail has its own team, we are finally getting it done."
Well, if Hastings has the time to get it done, the decision will have no financial impact, and subscribers are continually asking for the service, why has he not made this possible yet? Given how fast Netflix ships DVDs, and how many millions of subscribers they already have, one wonders why the company doesn't just go ahead and take the leap into game rentals.
If they were to issue an upgrade offer, the company could easily compete with GameFly. In 2009, GameFly only had 334,000 subscribers. Compare that to Netflix's 23.8 million subscribers to date, and GameFly wouldn't stand a chance should Netflix begin a full scale assault, going forward with a video game rental upgrade/service. This move might be able to revitalize hope in the Netflix company after so many have lost faith in its direction. With that many subscribers and a significant amount of interest, Netflix could easily bounce back with all the profits from the additional service.
Currently, for two games out at-a-time, GameFly offers a monthly flat fee of $22.95 (plus any applicable tax), with free shipping, no due dates and no late fees. For $15.95 a month (plus any applicable tax), players can rent one game at a time.
If Netflix were able to include a video game service, would it be like their Blu-ray upgrade costs of one dollar increments per discs-out-at-a-time? (One-disc out at-a-time unlimited, the Blu-ray upgrade is $2; two-discs out unlimited, the Blu-ray upgrade is $3, etc.) Would the upgrade be at a greater cost, or would it be its own separate service plan?
I could imagine a similar upgrade fee at an additional cost, perhaps starting at $5 a month, with $3-5 increments per discs that subscribers have out. A separate service plan could start at $12.99 a month, one disc out at-a-time, to compete with GameFly's prices. But this is all just speculation on my part.
How much would you be willing to pay to upgrade or subscribe to a video game rental service from Netflix? If the company does decide to jump on board with this decision, would you jump too? If you're already a subscriber, would you cancel GameFly?
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Source: Gamasutra, BroadcastEngineering
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