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Move over GameFly: Netflix is muscling into the console game rental biz. The company, which previously took heat for splitting its DVD rentals off from its streaming service for an additional fee, announced via a blog post from CEO Reed Hastings that it is spinning the DVD service off into something called “Qwickster.” When they made the move to separate the pricing of physical DVD rentals from streaming movies/shows, it was apparently just step one in setting up the Qwickster service.
In a surprise move, they announced that step two involves adding Wii, PS3 and 360 game rentals via a “video game upgrade option” being made available to customers. No pricing details were announced for the upgrade.
On his blog, Hastings explained the move into gaming: “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.”
More interesting still, is the revelation that Qwickster will be its own entity with its own CEO and website. While Qwickster manages the physical media end of things, Netflix will become a streaming only service. This translates to all customers needing to have entirely separate accounts and payment plans set up if they want to subscribe to both services. Qwickster’s launch is somewhat ambiguously set for a few weeks from now.
Hasting said that not being able to successfully transition over from mailing to streaming services was his “biggest fear” for Netflix over the past few years. “Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business,” the CEO explained. “Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly.”
Netflix was almost single-handedly responsible for bringing down the once mighty Blockbuster brick and mortar game and movie rental model. As such, it is going to be extremely interesting to see how their new direction affects sales of video games. And considering the absurd success they have enjoyed since adding streaming services, one has to wonder if some sort of game streaming rental service will be offered sometime down the road. It’s hard to imagine GameStop – despite its own forays into the digital sales world – sitting idly by while that happens after video rental stores were demolished by the red menace. Obviously, though, there are storage and bandwidth issues to be overcome before such a service could be implemented.
[Source: Netflix]
[Image via Fast Company.]
