Netflix Is Going To Offer Video Games. But Why Now?

(Yes you did Netflix. Yes you did.)

I got an email on Sunday from Netflix. It was an apology email, telling me they were sorry for the way they screwed up the splitting of the online and the mail-in DVD service. It was appreciated on my part, because as a customer since the unlimited DVD plan was called the "Marquee Club," I was pissed off about getting my rates unceremoniously jacked up.

But that's not what was interesting about the email. The interesting thing was the announcement that their new disc mailing service (called "Qwikster") was going to include Wii, PS3 and XBOX 360 video games. It will be an additional fee to your monthly bill - much like getting Blu-Ray discs costs extra.

It always seemed to me that they could have incorporated video games into their existing service a long time ago. It could have been done with relative ease and taken advantage of their already huge user base in the process. Whatever the reason was for not renting games, they've now changed their minds and I think I have a pretty good theory as to why.

Qwikster is going to have to make money for Netflix, and fast judging by the blunder in the pricing restructure and the mass exodus of many of their users. So Netflix has to hold onto the business, even though discs are dying and are slowly being replaced in every form of media (video, music) that relied on them. All except the console video game.

If you're going to sell a service that mails old fashioned pieces of plastic back and forth to people, it makes sense to include the one thing that will still probably be shipped on a disc for a long time to come. Digital delivery is quickly on its way to being the dominant way people rent movies and TV shows, but the day I can buy a digital download of Gears of War 3 on my console (and be as satisfied that I have ownership of a copy of the game) seems a long way off. These games take massive amounts of data (gigabytes), and the next generation of consoles will likely garner games that require even more. A console isn't a PC with ever expanding hard drives - and honestly even PC gaming is really in many ways just beginning to figure out digital delivery with services like Steam.

I have no idea if Qwikster will be successful or not. Looking around at the number of Red Box kiosks I see every day I'm not too optimistic. But including games as an option does seem like a good idea, and they'll probably pick up a lot of customers who never tried a service like GameFly but might get a Wii game or two for their kids. And from Neflix's perspective it might be better late than never.

Comments

[Jason]

Netflix used to be one of the most consumer-friendly companies out there - I am stymied by the decisions they've made over the last few years.

Every review I've read about GameFly says the same thing - you can't get the latest games. Sometimes this is the case with movies on Netflix - there's a Long Wait for the latest release, so you get your #2 or #3 choice. This is fine by me, I don't care if I have to wait a week or two for the Hangover 2. But I think the demand is different for video games. I want Gears of War 3 today. I want to play with my friends and talk about various aspects of the game. I do not want to see Very Long Wait, and then get the game in November. Also, as you noted in your post Monday, the consumption period for movies is short (once you find time to watch it).

So, the success of Qwikster's (seriously? What marketing genius came up with that?) video game service will depend largely on whether they can get out new games to the demanding masses shortly after the release date. Me, I'm not going to bother. I may give RedBox a try if I want to try a new game without buying it.