MCV claims that IGN Entertainment Group, which recently purchased UGO and popular gaming site 1UP, is currently in the process of selling Steam competitor Direct2Drive to mail-in game rental service GameFly. The deal is "almost complete," and an official announcement is expected to be released sometime next week.
Similar to Netflix before it offered streaming media, 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 the purchase of Direct2Drive means that GameFly is looking to gain extra revenue by incorporating a digital distribution platform for the PC and Mac. It also puts it in a position to compete with Valve Software's Steam platform which is currently at the forefront of the gaming industry's digital distribution sector. Even more, GameFly will gain access to Direct2Drive's just-launched 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.
Earlier this year GameStop plowed head-on into the digital distribution sector by purchasing Impulse from Stardock. A direct competitor to Valve's popular Steam service (which is embedded in many PC games GameStop offers under its roof), Impulse sells digital versions of PC games while also offering socialization aspects like chatting Achievements, friends lists, matchmaking and more.
GameStop also purchased Spawn Labs in the same time frame, a company that focuses on streaming technology. The popular retailer will essentially incorporate Spawn Labs' technology into the upcoming digital distribution platform so that it can offer streaming PC games similar to OnLive. That said, both acquisitions will put it in a position to compete with Steam and OnLive while also offering console games at a retail brick-and-mortar level. The only avenue its has yet to conquer is GameFly's current territory, mail-in rentals.
OnLive presently doesn't offer a "download" service even though it's considered both as a rental and digital distribution platform. Gamers typically have four options: a 3-day rental, a 5-day rental, or outright purchasing the game aka "Full Access." The fourth option allows OnLive customers to pay one monthly subscription fee for an all-you-can-eat gaming buffet. The drawback is that multiplayer games are locked inside OnLive's network, and if the service ever shuts its doors, all Full Access purchases are gone for good.
Standard retailers and digital distributors are seemingly scrambling to figure out where the digital/physical retail space is heading as consumer tastes shift to social experiences, lower prices, and lighter loads on the desktop/notebook/mobile device. With GameFly moving into the digital distribution space, GameStop moving into the digital and on-demand space, Steam investigating the mobile space, and Nintendo gearing up to launch a new console, 2011 and 2012 looks to bring a huge wave of change in how gamers consume their favorite titles.
All seemingly inspired by Apple's iPhone and its cheap-but-tasty bite-sized gaming.