Confirmed: GameFly Purchased Direct2Drive

As rumored last week, GameFly has officially acquired IGN Entertainment's Direct2Drive (D2D) digital distribution platform. As part of the acquisition, IGN will gain a minority equity stake in GameFly, but will play no direct role in GameFly's operations or governance. News Corporation will take an observer seat on GameFly's board.

"We're very excited to bring the D2D team onboard at GameFly and expand our ability to deliver games to consumers," said David Hodess, CEO of GameFly. "Only GameFly can offer a complete library of physical and digital games for the PC, Mac and consoles in one place."

News of the deal arrived last week, as reports indicated that the acquisition was "almost complete." GameFly is a game-by-mail rental subscription service that deals exclusively with physical games for the three major consoles and the handheld game consoles. GameFly typically sends the requested game via snail mail in a re-mailable, pre-paid envelope. Subscribers can hang on to the game for any length of time as long as the subscription is kept active.

But according to the company's announcement, D2D will still continue to provide more than 3,000 PC and Mac titles for gamers to purchase and download digitally. For now, there won't be any changes to either service in the immediate future although eventually customers will see a few new options, possibly within the next six months.

"We have some ideas but need to get the D2D team on board and benefit from their experience," Hodess told Shacknews. "We will let our customers know as soon as we are ready to roll them out."

Hodess also explained the acquisition, acknowledging that his console game subscribers are PC heavy gamers too and that offering both ends of the gaming arena made more sense. What he didn't mention was that D2D just launched a digital rental service that allows customers to rent select PC games – a whopping six total including the original F.E.A.R., Divinity 2 and Tomb Raider: Underworld. This feature would fit in nicely with GameFly's current console game rental model. Coincidence?

"We know that consumers are interested in PC game rentals, so we will investigate this idea thoroughly," he said.

As reported earlier, the purchase of D2D puts GameFly in a position to compete directly with Valve's Steam platform and the upcoming service provided by GameStop. While Steam deals strictly with digital sales and distribution, GameStop looks to take on both digital sales and on-demand gaming. OnLive also delivers on-demand gaming in 3-day and 5-day rentals, in a flat-rate monthly subscription, or as full-blown "purchases" disguised as "Full Access" (but locked within the OnLive service).

GameFly did not disclose the terms of the deal it made with IGN Entertainment.