Netflix abandons game rental plans

In earnings call, CEO Reed Hastings says there are "no plans" to offer games by mail.

In October, Netflix said it was "still considering" whether or not to offer game rentals after it killed off its offshoot, Qwikster. Now, the company has dropped all plans to pursue the gamer's dollar.

You can still rent Tomb Raider movies through Netflix if you want to.

During yesterday's fourth-quarter earnings call (attended by GameSpot sister site CNET), Netflix CEO Reed Hastings said there are "no plans" to offer game rentals to subscribers.

This announcement comes as an about-face to sentiment expressed by Hastings alongside the announcement of Qwikster in September. At the time, Hastings said, "Members have been asking for video games for many years, and now that DVD-by-mail has its own team, we are finally getting it done."

Game rental through Netflix would have offered consumers Xbox 360, PlayStation 3, and Wii titles for an unspecified additional charge. The move would have put Netflix into more direct competition with established by-mail game rental company GameFly.

Additionally, yesterday's fourth-quarter earnings call saw Netflix beat reduced guidance. The company reported global revenue of $876 million, up 47 percent over the year prior. And although net income dropped 15 percent to $40.7 million, it represented a major jump from Wall Street's expectations, according to CNET.

Additionally, the company's fourth-quarter results saw Netflix attract an additional 220,000 subscribers, bringing the media giant's total user base to 21.6 million. DVD users dipped by 2.7 million users, and Netflix brought in 1.86 million overseas subscribers.

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Discussion

28 comments
PixelAddict
PixelAddict

It is becoming clear Neflix has NO idea what it is doing. What a disappointment this company is becoming. This coming from a member since '99.

theKSMM
theKSMM

I think sticking with their core competencies during a tumultuous period is a good move. Let the dust settle from the price hikes before trying to expand further.

blackace
blackace

They really should have left the pricing the way it original was. Everyone was happy, so why make changes? Why not do a survey with your customers prior to making changes? See what your customers want and then make the right changes to please them and make more profit. A big company like this, who are so customer oriented, should know how to do this. We obviously want more current movie releases on the streaming network.

Hvac0120
Hvac0120

It looks to me that OnLive is going to be the place where future game rentals come from. If OnLive can partner with Microsoft, Sony and Nintendo to have an app added to their consoles for OnLive. Then customers could have the option to pay OnLive for a subscription, download the app on their console, and stream their rented games to their console. I imagine their are some huge legal battles that prevent this from currently becoming a reality. It's more likely that each manufacturer will have their own rental options (Sony already sort-of does for PS+ members in the way of game trials).

Ice-Cube
Ice-Cube

This company seems really lost, they can't figure out what to do next. Plans for 2012: 1. Upset their customers 2. Upset their customers 3. Retract their last plan Rinse and repeat!

megakick
megakick

Too bad I would have signed up for it.

monson21502
monson21502

i wish sony, nintendo, or ms would make something like the sega channel. sega was way ahead of its time. too bad nintendo is still here and they aint... they woulda never made a cheap system like the wii and we all be playing real next gen systems without the need of a hdtv to enjoy them better.

TheTrueMagusX1
TheTrueMagusX1

@Gen-Gawl I would slightly disagree with your statement. While it seems like they donot how to expand beyond streaming and dvd rentals, it seems they are targeting Paid Television such as HBO as competitors. Netflix actually has planned, original Programming including House of Cards(A series with David Fincher and Kevin Spacey involved), and a revival of Arrested Development that will air exclusive on their streaming network. That is the direction they plan on going....Instead of simply expanding it, they plan on competing with Starz, Showtime and HBO as opposed to simple expansion.

Gen-Gawl
Gen-Gawl

They just really have no idea what direction they want to go in do they? They need to focus and pick a strategy because waffling never helped a business.

Avenger1324
Avenger1324

Considering the recent launch of Netflix in the UK, the decision to not offer games while the existing main rival LoveFilm do offer games surely won't help them win customers over.

pszone
pszone

I want companys like SONY,Nindnedo, Moriosoft to do game reatals or tell game companys do do evey game demo to try out games.

DeathwachMarine
DeathwachMarine

goddamn it! I was so hoping the would add games. It's so convenient for subscribers who play games,it sucks that they wont be offering this feature....

blackace
blackace

I don't even bother with Gamefly, as I don't really have the time to rent a game and play it for 5-6hrs a day. Maybe after my daughter starts school in a couple years I'll be able to do this. I'm happy with Netflix the way it is. I can watch movies just about anywhere now since I have it on my IPad 2, 3DS and IPod. I still use the DVD service as well. I get to watch 8-10 movies I haven't seen a month. That's about $40-$50 in rental fees alone.

Pyrosa
Pyrosa

Smart business decision (which is increasingly rare on his part lately).

cajunstrike
cajunstrike

Not at all surprising considering Netflix would much rather stream than deal with shipping physical media.

Evenios
Evenios

i use gamefly now anyways.

zyxomma100
zyxomma100

I never thought I'd say this, but I actually signed up for Blockbuster's by-mail game/movie service. I've been on it less than a month but it seems fine to me so far. And it's cheap. If BB does die, well, I can always switch.

OJ_the_LION
OJ_the_LION

Damn. I was looking forward to this as something I could add to my account for possibly less than a separate GameFly subscription. Netflix is missing out, but there's no point in dwelling on it.

KingsofQueens
KingsofQueens

No they shouldn't. Netflix is a film centric business, they should STAY that way. Leave game rental for Gamefly.

dragon_rule87
dragon_rule87

@Vambran thats just a rumor. You think they will get away with blocking used games HAHAHA

AncientDozer
AncientDozer

One step at a time. Netfix, how about you bring back parties on xbox live. We miss watching movies together

Icehearted
Icehearted

What the hell is going on with these guys? These last 8 months they've taken one pommeling after another. A competitor to GameFly would have been welcome, and they may have already had a willing install base just waiting to be tapped. I feel like I'm watching some poor creature die a slow agonizing death. Save it, or put it out of it's misery.

AGM3002
AGM3002

I was hoping maybe netflix would have a on demand games service, like onlive. I guess not.

Vambran
Vambran

With demos + internet sites you don't really need to rent a game to tell if you want to buy it. I heard next gen is going to block used games anyway.

gix47
gix47

guess they were not ready to compete with Gamefly

BloodMist
BloodMist

Man that's too bad, Gamefly needs some major competition, because they are waaaaaaay too expensive.For a few dollars more than what they charge you can easily just buy a game instead if you know how to shop around.

Nzilla
Nzilla

Awe man, i was really looking forward to that.