Last Autumn, Netflix announced that it would soon be starting to rent video games through its service. Unfortunately for anyone looking forward to this new feature, Netflix has this week announced that they will now be dropping plans for this. CEO Reed Hastings made the announcement in an investor earnings meeting call earlier today, explaining that the strategy is no longer one that the company finds viable.
The Initial Announcement and Expectations
The new games rental service was expected to be part of the company’s Qwikster DVD-by-mail spin-off that was announced alongside Netflix’s streaming price increase last fall. The Qwikster service was intended to separate Netflix’s DVD rental business from its streaming service, allowing each to focus on their respective markets. The inclusion of video games was seen as a significant expansion of Netflix’s offerings, potentially attracting a new segment of customers who are avid gamers. However, the Qwikster DVD-by-mail spin-off was soon closed after negative feedback from Netflix customers. Many users found the separation of services to be inconvenient, and the backlash was swift and vocal.
Future Prospects and Market Impact
Whether Netflix will re-address the service in the future has not been mentioned, so if you were hoping to rent a game or two, you’re out of luck. The decision to drop the video game rental service leaves a gap in the market that other companies might fill. Game rental company Gamefly, for instance, will be very happy not having to deal with competition from Netflix. Gamefly has been a dominant player in the game rental market for years, offering a wide range of titles for various gaming consoles. Without Netflix entering the fray, Gamefly can continue to enjoy its market position without the threat of a major competitor.
Other announcements made this morning included notification that 3D, Blu-ray 3D discs are being sorted for addition to their range of products. This move indicates Netflix’s commitment to enhancing its physical media offerings, even as it continues to focus on streaming. The company stated it is still “looking into” streaming 3D but has no plans to bid for current seasons of TV series. This cautious approach to 3D streaming suggests that Netflix is waiting to see how the market for 3D content develops before making a significant investment.
The decision to drop the video game rental service and focus on other areas could be seen as a strategic move to streamline operations and concentrate on core competencies. Netflix has always been a pioneer in the streaming industry, and its decision to enhance its Blu-ray offerings while exploring 3D streaming shows a commitment to providing high-quality viewing experiences. However, the absence of a video game rental service means that Netflix misses out on tapping into the lucrative gaming market, which continues to grow year after year.
In conclusion, while Netflix’s decision to drop its video game rental plans may disappoint some, it also allows the company to focus on its strengths and explore new opportunities in the streaming and physical media markets. Whether Netflix will revisit the idea of game rentals in the future remains to be seen, but for now, gamers will have to look elsewhere for their rental needs.
Source: LAT
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