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Netflix Kills Plan For Video Game Rentals

★~DoctorWhoGuru~★ 2012/01/26 08:57:58

Netflix CEO Reed Hastings delivered some news on Wednesday that's sure to disappoint gamers.

During the company's quarterly earnings call, Hastings said that the company has axed plans to offer video game rentals as part of its DVD-by-mail subscription, according to a tweet by AllThingsD's Peter Kafka.

The possibility of a video game offering was proposed last September, along with the bombshell announcement that the company would spin off its DVD business into a separate business focusing solely on by-mail rentals. The new site, which would have been called Qwikster, would also have offered a premium subscription plan with an option for Wii, PS3 and Xbox 360 game rentals. The proposal was immediately and severely panned, and Netlfix put Qwikster to bed in October.

Despite the quick death of Qwikster, Netflix continued mulling the idea of renting popular video game titles, according to an email correspondence between SplatF's Dan Frommer and a Netflix rep. Now, however, that idea is officially dead, too.

It's a move that makes sense for Netflix, which has been slowly moving away from DVD rentals. In Hastings' September blog post detailing the botched Qwikster plan, the CEO wrote, "[W]e realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently."

Indeed, the company's Q4 2011 earnings report saw a loss of 2.8 million DVD subscribers, for a remaining total of 11.2 million. Meanwhile, streaming subscribers grew for the quarter. According to the Associated Press, Q4 closed with "21.7 million streaming subscribers in the U.S. and another 1.9 million in Canada and Latin America." Over the next quarter, Netflix expects streaming to increase and DVD rentals to continue falling.

It seems that the company is finally starting to recover from the fallout over the Qwikster debacle, which was preceded by a massively unpopular price hike. And the turnaround can't come any sooner. The New York Post reported on Wednesday that Amazon is considering expanding its streaming service and even splitting it off into a more robust subscription business to compete with Netflix. According to AllThingsD, Hastings mentioned on Wednesday that his company is anticipating such a development. "We expect Amazon to continue to offer their video service as a free extra with Prime domestically but also to brand their video subscription offering as a standalone service at a price less than ours," Hastings said.

Read More: http://www.huffingtonpost.com/2012/01/25/netflix-k...

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Top Opinion

  • The DOCTOR 2012/02/11 15:57:53
    The DOCTOR
    +8
    well thats a nice idea but we would have to pay more for rentals and that would make some people go to game fly or something.

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  • The DOCTOR 2012/02/11 15:57:53
    The DOCTOR
    +8
    well thats a nice idea but we would have to pay more for rentals and that would make some people go to game fly or something.
  • Kuchi_Main 2012/02/10 01:22:22
    Kuchi_Main
    +1
    that would be a pretty cool idea, but the cost will go up on renting, and I honestly dont think that they should do that. But it would be pretty cool
  • Savious 2012/02/09 19:17:20
    Savious
    +1
    What the he!!; can’t these people figure anything out? They hike the rates up, and then can’t fathom why someone would be upset; talk about splitting the company up, and sit there scratching their heads when a flood of negative email floods their box; try to make it up by offering games too, now are dumping that.

    I’ve been doing Netflix for years; and have enjoyed the ease they offer; as their streaming selection continues to get better and better, I have enjoyed that as well. But damn these folks at the top, really need a shot of common sense.
  • prosperhappily 2012/02/04 23:09:22
    prosperhappily
    +2
    No biggie. Just swap for it, buy it used or get it from Game fly.
  • Jimbo 2012/02/04 00:13:40
    Jimbo
    +2
    I think Qwikster was a ploy that Netflix came up with after the fact because so many people were mad they raised their prices.

    As for the game rental... who cares. If you really want to rent a game go buy it used from Gamestop and return it after 7 days. Games are more important than movies. I like to buy a game play it until I hate it and trade it in for a new one.
  • Captain Spaulding (Movie-Guy) 2012/02/02 06:27:19
    Captain Spaulding (Movie-Guy)
    +1
    Netflix has screwed up bad anyways when they raised their rates..I love netflix and still do but that even killed them more when they took off video games, especially for a gamer like me, they better hope that another competitor doesnt have games for rent with movies cause then ill be leaving them for sure
  • Xerxes 2012/01/26 17:26:30
    Xerxes
    +2
    Could they compete with Game Fly?
  • Keichi ... Xerxes 2012/01/26 18:42:22
    Keichi Morisato
    +3
    probably not
  • Captain... Xerxes 2012/02/02 06:28:48
    Captain Spaulding (Movie-Guy)
    +1
    Netflix was actually gonna have instant games to play like they do instant streaming movies for game consoles, Gamefly is a great service but they wouldn't have that, they should though
  • Savious Xerxes 2012/02/09 19:17:44
    Savious
    +1
    One web site vs two; I'd say yea.
  • Xerxes Savious 2012/02/09 19:24:46
    Xerxes
    Competition could be a good thing
  • Sandman366 2012/01/26 13:41:54
    Sandman366
    +3
    Do they LIKE shooting themselves in the foot...?
  • Captain... Sandman366 2012/02/02 06:29:08
    Captain Spaulding (Movie-Guy)
    lol thats exactly what they did
  • Yoru Azenia 2012/01/26 12:55:07
    Yoru Azenia
    +2
    I love Netlfix and their streaming it keeps me entertained when video games won't do the trick.
  • Beautiful_Syn 2012/01/26 11:39:18
    Beautiful_Syn
    +2
    When Netflix rolled out their new changes they lost half my business with them...
    originally I had the 1 DVD + Instant Streaming plan $8.99 yet when they said it was going to $8.99 a piece I dropped the 1 DVD out like a hot rock (I only have instant streaming for my children) and I have since switched to RedBox whenever I want to see a new movie.
    I am glad that they dropped this notion of having a video game service as well, GameFly has the corner on that market and Netflix should stay in the realm of movies and instant streaming.
  • Keichi ... Beautif... 2012/01/26 18:43:44
    Keichi Morisato
    +1
    the reason they did that was because they were loosing too much money on server maintenance costs that they had to do that.

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