Is Netflix Backpedaling on Game Rentals?

Paul Lilly

In what was largely overshadowed by the intense backlash over Netflix's ill-fated decision to spin off its DVD-by-mail rental business into Qwikster is that you'd be able to rent videogames in addition to DVDs and Blu-ray movies. It was to be an upgrade option similar to the one for Blu-ray, except you'd be able to rent Wii, PlayStation 3, and Xbox 360 games. Did Netflix nix those plans when it axed Qwikster?

"Members have been asking for videogames for many years, and now that DVD-by-mail has its own team, we are finally getting it done," Netflix CEO Reed Hastings stated in a blog post announcing the Qwikster spin-off.

Now that Netflix reversed course, it appears game rentals may no longer be in the cards, or at least not anytime soon. News and rumor site Fudzilla reports it has "learned that game rentals (for the time being) have been shelved, which is good news for competitor GameFly, who was not looking forward to Netflix stepping into their videogame-by-mail business."

Nixing game rentals might be viewed as a necessary cut now that Netflix's physical media business won't be getting a dedicated team separate from the streaming side of things, but on the flip side, game rentals could be just the thing to stop the bleeding and keep even more subscribers from jumping ship, even the angry ones. In a letter to shareholders announcing third quarter earnings, Netflix was very open about the last few months being "difficult" all around.

We are currently seeking comment from Netflix.

Update 10/26/11

Steve Swasey, Vice President of Corporate Communications for Netflix, responded to our request for comment and simply said, "We're still considering games," and left it at that.

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