GameFly plans to launch a service that will allow customers to buy digital copies of video games and download them directly to their computers, the company announced today.
According to GameFly, its download service, which is slated to launch later this year, will offer over 1,500 games, and work on Windows PCs and Macs.
GameFly's decision to launch a digital-download service is an interesting one, considering its core business has historically been by-mail game rentals. But Sean Spector, the company's co-founder and senior vice president for business development and content, sees it as a natural extension of GameFly's business model. In a statement today, he said that his company will give customers far more options than any competitor, by delivering the "ultimate choice of how, what, when, and where they game."
GameFly's move might also have something to do with the state of physical media in the gaming space right now. NPD, the definitive source on game sales data, announced earlier this year that it would start measuring digital-game sales monthly, rather than quarterly. The company said that its decision is because digital content is becoming more important in the industry, and currently accounts for about 40 percent of all game sales each month.
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Electronic Arts has been especially outspoken about digital content, saying earlier this year that not including digital sales in monthly NPD reports is like "measuring music sales and ignoring something called iTunes."
EA Sports Vice President Andrew Wilson also chimed in on the topic last month, saying in an interview with Eurogamer that eventually, people will stop heading to brick-and-mortar stores to buy video games.
"There will come a day where I think that people will stop going into [U.K. game retailer] Game and GameStop," Wilson told Eurogamer in the interview. "And I use those purely as examples of retail. It's important for retailers and us to understand what the consumer wants in the future."
Even GameStop is starting to see the writing on the wall. The boutique game retailer generated $300 million in digital games revenue during its last fiscal year ended January 31. And according to Wedbush analyst Michael Pachter, that figure will grow "at a 50 percent compound annual growth rate" over the next several years.
GameFly made its intentions to capitalize on the digital market quite clear in May when it announced that it had acquired Direct2Drive, a PC game digital-distribution service owned by News Corp. subsidiary IGN Entertainment. At the time, GameFly didn't say what it had planned for Direct2Drive, but it appears now that the move was just the first step of its digital push.
By offering a digital service, GameFly will be facing off with a host of competitors, including Steam, OnLive, Gaikai, and others. EA also recently launched its own digital-download service, called Origin, which allows users to buy titles and play them on their computers.
For its part, GameFly plans to offer access to a closed beta of its service to attendees at a Los Angeles launch event it's hosting on September 8. It expects to make the service publicly available this holiday season.