First Netflix enraged customers by separating its streaming and DVD mail services, resulting in subscriber price increases of up to 60 per cent. Then it decided to put a Band-Aid on the problem by having Reed Hastings, CEO and founder, apologize and offer up the seeming non-solution of simply rebranding its mail service (subscribers get the same service for the same increased price in the same red envelope, but with a new "Qwikster" logo on the front).
Clearly, consumers—and investors, who have seen the company's share price dive by nearly 50 per cent since July—aren't happy.
But the news hasn't been all bad, especially for gamers. Buried deep in Mr. Hastings' lengthy weekend blog post was a quick mention that his company will finally begin serving its mail service customers with video game rentals.
Game rentals by mail have proven popular in the U.S. GameFly, which offers thousands of games for all the latest home console and handheld systems, is a household brand for American gamers. Smaller services such as Plurent have managed to thrive as well.
Are these companies concerned that a new player as massive as Netflix — I mean Qwikster (boy, that's going to be hard to change) — might cut out a big slice of their pie?
GameFly is showing no fear. Upon inquiring how the company felt about its new competition, American blog Joystiq received a fairly predictable response:
"GameFly has expanded steadily over the past nine years by focusing exclusively on video gamers. We are the only retailer offering games physically and digitally for both rental and purchase. Gamers can try before they buy, choosing from new releases and classic titles that span the last decade. GameFly has more than 8,000 games for 10 console and handheld systems to choose from, and over 1,500 Windows/Mac games are available for download. GameFly is the leading video game rental service, and we have continued to grow even as Blockbuster and Redbox increased their investment in console games."
Thing is, Netflix — I mean Qwikster — has proven for a decade that it can deliver efficient, reliable rental-by-mail service better than anyone. If it came in with a subscription model designed to lowball its competitors, I can't help but believe that the incumbants would begin to feel a little sweat beading on their brows.
Looming over it all is the likelihood that disc-based game delivery is doomed to decline in the coming years. Streaming services such as OnLive have already laid their stakes in the ground, digital delivery platforms like Steam and Origin are growing by the month, and even home console makers Microsoft and Sony have slowly but surely been wading into the waters of downloadable games. You can expect them to focus on the digital side in the next generation of hardware.
Of course, none of Netflix's changes south of the border would seem to matter to Canadians, who aren't eligible to take part in Netflix's — I mean Qwikster's — mail service. Just as companies such as zip.ca have filled the DVD-by-mail void north of the border, others, such as GameAccess.ca, have been serving Canadians' games-by-mail needs. While Netflix's streaming service may have taken Canada by storm — the company says it will be in the black by its first anniversary — no small feat — it seems unlikely that it would expand its mail service to another region given that it is clearly focusing its future on digital delivery.
Let's just hope that Netflix's tribulations down south don't cause it to lose concentration on its success up here. Netflix Canada may not offer games, but it has met my MythBusters and Mad Men needs quite nicely.