Ever Try Gamefly?

TL;DR

Were you ever a Gamefly member? Perhaps you still are? I remember back to a time when Video Games arrived in the mail, what came before Gamefly and take a quick look at what Gamefly is currently up to.

Special Delivery

It’s been quite some time since I last gave Gamefly much thought. Advertisements used to run frequently on TV and the gaming internet sites I visited. I can’t be sure whether the company no longer budgets as much for marketing or I simply do not watch and read their ad outlets, though I suspect the former.

I subscribed to the service for a number of years. It has been so long that I can’t remember when that was. If I were to think back on it, I’d estimate between the 2008 and 2012 timeframe.

Truth be told, I am no longer a member. Not because of dissatisfaction with the service. To the contrary, I remember being quite happy with it. Their web portal, where you made game selections and maintained your queue, was easy to navigate. They had a wide range of games. I never encountered a title that I wanted not being in their system to choose from. And when my first choice was not available, I always received either my second or rarely third choices from my queue. My initial first choice always came in during my next one or two game rotations.

Dawn of Digital Distribution

My membership with Gamefly would have placed it squarely in the Xbox 360 era of Video Gaming. As a reminder, or to anyone not into Video Games at that point, this was a time when digital distribution was in its infancy but growing. At the outset you were not going to download Halo 3, Gears of War or my personal favorite Xbox 360 launch title Kameo: Elements of Power. In fact, while Xbox Live Arcade made its debut on the original Xbox, with the transition to the Xbox 360 game sizes were mandated to be 50MB or less to ensure that the file would fit on a 64MB Xbox 360 memory card. Remember those?

But, you could download fun arcade games and the like. Galaga, Ms. Pac-Man, Feeding Frenzy and Bejeweled were but a few of the original 14 games available on the service. It was the start of a digital distribution revolution.

The Before Times

There were prior forays into digital distribution. PlayCable came on-line as early as 1979 in a testing phase, with a full launch coming 2 years later in 1981. Not to be outdone by their competition over at Mattel and Intellivision, GameLine, the forerunner to America On-Line, became available in 1983 for use with the Atari 2600. Later, Sega would pick up the mantle with their Sega Channel, launching in 1994 for the Sega Genesis.

Each of these services allowed video gamers to digitally download games to their console, as early as 1979. Think about that for a moment.

And this North American centric view does not even include a different take on the idea by Nintendo, with their Disk Writer Kiosks.

While the idea had certainly been there for quite some time, in practice it never seemed to take hold. Taken individually each failure could be attributed to specific factors, such as the North American Video Game industry downturn in 1983. Service launches that were in too close of proximity to each respective platform’s obsolescence. Convenience that had not yet been refined. Or, a cost/value proposition to the customer that didn’t land.

However, in reality I think it was a combination of all these factors and more. Until cost, convenience and ease were to a level at or exceeding the established norm, these services were going to remain niche. You can see this illustrated by the fact that despite consumer console digital distribution services having been intermittently available to the public for the preceding 20 years, gamers did not view this as a necessity or demand it with each console debut.

Ironically, one may argue that only with the advent of Xbox Game Pass and PlayStation Plus has the industry in fact come full circle back to the original PlayCable, GameLine and Sega Channel from so many years ago, given the similarity in subscription models with these versus the original full game ownership model from the early Xbox era.

Enter Gamefly

So, in this world, Gamefly offered an elegant solution that presented a solid value proposition to the consumer. Allowing for what was essentially a rental model more akin to Blockbuster or the original Netflix, it combined both the benefits of renting and a digital distribution model but substituting the U.S. Postal Service for cable or telephone lines. Even though such a rental model using digital distribution had been developed decades prior. This isn’t to say that the idea was wholly original. As best I can determine, Gamefly arrived on the scene approximately 5 years after the original Netflix. But I always find it fun to see how things are adapted and applied to our world of video games.

As noted earlier, I have not had a Gamefly subscription for years, and not for any fault of theirs. Remembering back, even prior to me eventually purchasing more and more games digitally and more recently leaning into Xbox Game Pass, I found my tendency of being a slow and methodical gamer didn’t always mesh well with utilizing Gamefly to the fullest. I go through a video game trying to unearth everything I can find in the virtual world. That’s not to say I’m a completionist, which I don’t believe I am. But I definitely take my time with a game, often finding that I had held onto a game for several months.

This didn’t bother me for a long time, but as the super-sales of Xbox, PlayStation and Steam became a normal occurrence, I came to realize that the game I’d essentially just paid $20 could later be purchased for the same amount, perhaps less. Xbox Game Pass has changed the equation yet again.

Looking back though, I miss the excitement of going out to the mailbox to find my new video games in the mailbox. It was definitely a simpler time.

(Game)Fly to the Present

I’m not sure what led me to think about Gamefly for the first time in ages. I didn’t see any commercials or read a thread somewhere about them. They just popped into my head, and I started wondering, ‘huh, what has Gamefly been up to? Are they even still around?”.

It turns out that, indeed, Gamefly is still around. They seem to be operating the same way they always have, renting the latest games out to their subscribers. Something new I just discovered is that they now appear to also be renting out movies. I’m not sure how long ago that happened. It definitely would have been something of interest to me when I was still subscribing.

I have to wonder how many people subscribe to Gamefly. It can’t be a growth business anymore, at least as far as I can imagine. I do however hope they are doing well as a company. Call it nostalgia, or call it appreciation for options in the marketplace, but I enjoy living in a world that has Gamefly.

In looking for information on the company and how they are performing, I found that Gamefly Holdings, LLC, appear to be a private company controlled by Co-Owners Bruce Ogilvie and Jeffrey Walker. They, in turn, are also the Executive Chairman and Chief Executive Officer, respectively, of Alliance Entertainment Holding Corporation (AENT). AENT, which trades on the NASDAQ, appears to be in the distribution business for music, movies, toys, collectibles and video games. They are not a small company, with a Market Capitalization of almost $500M and FY2024 Revenue of over $1.1B.

While it doesn’t appear to actually own Gamefly, AENT and Gamefly do appear to do business with one another, with AENT selling Gamefly new release movies, video games, and video game consoles. So, given that both companies appear to share common control, I have to wonder if Gamefly provides a solid, if not growing, outlet by which AENT is able to help manage their inventory?

Whatever the relationship, it appears to be working at present. A quick review of AENT stock shows it on a run as of today, with it up approximately 300% from this time last year.

I like to think that Gamefly has played some small part in this.