GameFly Gets Into Mail-Order Movie Rentals

Netflix’s DVD business is about to get some competition from GameFly, which is testing mail-order movie rentals on top of its existing games service.

GameFly confirmed to VentureBeat that it will offer DVDs and Blu-ray discs to subscribers, with a beta program beginning on April 4. Customers with a two-disc or higher game rental plan will get into the beta first, and movies will count against their disc limit at no extra charge. GameFly’s game rentals are twice as expensive as Netflix’s movie service, though, starting at $16 per month for one disc at a time.

Combining game and movie rentals seems like a no-brainer, but no one’s been able to make it work so far. Blockbuster added games to its mail-order DVD service in 2010, but the effort was widely panned for having a three-month delay on new releases. (Blockbuster finally scrapped the entire mail-order service late last year, while also closing all of its U.S. stores.)

Netflix also planned to add game rentals a few years ago, as part of an ill-conceived plan to create a separate company for the mail-order business, called Qwikster. The Qwikster spin-off never happened, and game rentals died along with it.

The problem with game rentals is that they’re much more expensive to carry than movies, with most new games selling for $60. GameFly is in a better position to add movies because the costs are lower, and customers are already paying a higher price for game rentals.

As VentureBeat points out, GameFly’s biggest weak point is its limited supply — and resulting long wait times — for newer games. Subscribers may feel burned by the company’s investment in movies rather than more games, but at the same time, movie rentals can help fill in for the summer doldrums when there aren’t many new games coming out.

The future isn’t exactly bright for optical media, as streaming video services take over and game consoles make a bigger push into downloads. But at least console owners still have a DVD player in the living room; GameFly is giving itself one more way to ride the wave while it lasts.