September 29, 2008

Why Netflix Refuses to Rent Video Games

With the Xbox 360 Fall Update quickly approaching, most everyone is talking about avatars and the removal of the blades, and lost among the talk is Netflix. Now that Netflix has signed a deal with Microsoft to allow streaming movies over the Xbox 360, is the next logical step the ability to rent games either through the mail or via download? A representative from Netflix says the answer is a flat out no. Netflix has no intention of renting or selling games. It is simply not a feasible economic model for them. According to Netflix, games supposedly have a short shelf life. To paraphrase, "No one will be playing Madden NFL 09 two years from now, but people will watch a great movie over and over."

At this point, you might be wondering if TGR was talking to a Netflix rep or an EA rep. TGR asked Netflix if the game publishers had any influence in their no-game-rental policy. There was silence on the other end of the line. The Netflix rep then reiterated that game rentals are simply not part of their business plan. They do realize that other companies like Gamefly (who advertises on Netflix's famous red envelopes), are renting games. TGR tried to contact Gamefly on two occasions and both times were met with silence.

What Netflix apparently fails to realize is that gamers do play games that are more than a couple years old. A quick survey of the top traded Xbox 360 games on Goozex reveal three games published in 2005 (PGR 3, Perfect Dark Zero, and Condemned) and five games published in 2006 (Deadrising, Oblivion, Fight Night Round 3, Rainbow Six Vegas, and Saints Row). These older games do have an audience and gamers are playing them.

Each Holiday season, the game publishers flood the market with more games than any one gamer could possibly buy or receive. Because of this, a year or two might go by before a gamer is ready to play something they missed earlier. And while no one wants to pay full retail for a two-year old game, they still want to play the game, regardless if they buy, trade, or rent it.