Tag Archives | Gamefly

The Upside of Qwikster: Video Games

Harry’s already written a bunch about Qwikster,  Netflix’s newly-named business for mail-order DVD rentals. And while I agree that it’s a silly name, and that the announcement was pretty sloppy, I’m still excited about the news simply because Qwikster will rent video games as well as movies.

Netflix–er, Qwikster–hasn’t described its game rental service in detail, but did say that it’ll be an optional upgrade to movie rentals. As someone who subscribes to both Netflix DVDs and to GameFly, that’s an appealing alternative.

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GameFly Still Seeking Postal Service Bailout

GameFly is making some scary claims about the amount of money it spends on shipping.

In a distressed letter to the U.S. Postal Service, obtained by Ars Technica, the mail-order game rental service says it pays such higher shipping rates than Netflix to mail physical media that the cost difference alone is higher than GameFly’s net monthly income. If I’m understanding correctly, that doesn’t mean GameFly is losing money — net earnings would be the amount the company earns after expenses, including shipping — it just means the Postal Service is making an awful lot from the arrangement.

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Blockbuster Guns for Gamefly's Turf

Blockbuster is finally taking its mail-order game rental service nationwide, and I’d be a little more excited if the pitch wasn’t slightly misleading.

On Blockbuster’s website, the movie and game mail-order service seems like a knockout. For $9 per month, you can rent one disc at at time. That’s the same price as Netflix, and although there’s no streaming video, you can rent video games and Blu-ray discs for no extra charge. Two discs per month costs $14, and three discs costs $17.

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Redbox May Do Gaming, But It’s a Tough Sell

Redbox wants to do for gaming what it did for movies by offering nightly game rentals from its popular kiosks.

According to Reuters, Redbox is talking with game developers (publishers, more likely) about renting games for $2 per night. The company won’t say which publishers are involved, but THQ, the company behind Saints Row, said it would consider the idea. Redbox is already testing the program in Wilmington, N.C., and Reno, Nev.

There are only two problems: Just as Blockbuster is following Redbox’s lead with movie rental kiosks, Redbox was beaten to the punch by Gamefly, which has been operating G-Box kiosks since March. More importantly, as I’ve experienced first-hand, renting video games through kiosks is unpleasant, at least with the business model that both companies are pursuing.

Game rentals are fundamentally different from movie rentals. You can watch a movie in one evening, but you can’t play an entire game in one night without a four-pack of Red Bull, and possibly the next day off from work. The real money from game rentals, I suspect, is made when you keep that game beyond the first day. That’s probably why Gamefly constantly sends me coupon codes for free rental nights. (Seriously, they’re like AOL demo discs in e-mail form.)

Unfortunately, the G-Box costs $2 per day, the same price Redbox chose for its pilot program. If either kiosk operator is serious about game rentals, it needs a weekly price scheme for considerably less than $14. As it stands, gaming by kiosk makes the most sense for people who want to try before they buy — and the G-Box does let you purchase games from it. Otherwise, you’re better off renting from a place that won’t put you under so much pressure. There’s enough of that going on in the games themselves.


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Hands-On With GameFly’s G-Box Kiosk

gameflygbox2Apparently I missed the news that Gamefly is trying to pull a Redbox with video game rental kiosks, because the first I heard of it was this morning, when an e-mail alerted me to their existence.

The e-mail — sent to me as a Gamefly subscriber, not a journalist — included an offer for a free, one-night rental, normally valued at $2. For gaming, one night is essentially nothing unless you don’t plan to sleep, but nonetheless I headed to one of the two 7-Elevens listed in the e-mail to take a look. (Strangely, Gamefly’s G-Box landing page doesn’t say where else you can find the kiosks.)

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Gamefly Accuses Postal Service of "Discrimination"

gamefly_logoVideo games tend to be frowned upon as second-class media, but the US Postal Service is taking that stance literally, according to a complaint by Gamefly, which rents video games through the mail.

In a 17-page complaint filed with the Postal Regulatory Commission (via Ars Technica), GameFly says that 1 percent to 2 percent of its games are breaking in transit. Even more interesting is Gamefly’s allegation that the postal service gives “preferential treatment” to Netflix and Blockbuster.

Gamefly takes issue with the use of an automated sorting system that has a tendency to damage discs. While the postal service manually sorts out “a large percentage” of DVDs from Blockbuster and Netflix, it refuses to do the same for Gamefly under equal terms.

Adding insult to injury, the postal service boasted in a July 2008 press release that it was helping Gamefly prosper when the company opened a new shipping center. “GameFly may be a relatively new company, but it’s using an old idea— getting USPS to help it grow,” the statement said.

Gamefly filed the complaint on four counts, among them “Unlawful Discrimination Among DVD Mailers” and “Unlawful Discrimination Among Flats Mailers.” The company says it wants the same terms and prices that Netflix and Blockbuster are getting and may seek “additional forms of relief as the evidentiary record justifies.”

With 590,000 discs going out per month, Gamefly is shelling out almost $300,000 per month to replace broken discs if you assume a cost of $50 per game. That hurts enough on its own, but as Gamefly points out, Blockbuster is getting into mail-order game rentals now, allegedly without the same shipping headaches.

This explains why I’ve received a few different varieties of mailers during my two years of membership with Gamefly. I used to get cardboard inserts in the mail, but that practice was abandoned last year at one point abandoned, and has since continued again. Apparently, it was too expensive because of the weight increase, and it didn’t the extra cost still doesn’t stop all the discs from breaking.


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