Gamasutra is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
January 15, 2021
arrowPress Releases

If you enjoy reading this site, you might also want to check out these UBM Tech sites:

Rent-By-Mail Service GameFly Files For IPO

Rent-By-Mail Service GameFly Files For IPO

February 10, 2010 | By Kris Graft

February 10, 2010 | By Kris Graft
More: Console/PC

Video game rent-by-mail subscription service GameFly has announced its filing for an initial public offering, with the intention of making its shares available for the public to buy for the first time since the company's 2002 founding.

Although L.A.-based GameFly said it has yet to determine the number of shares and the price range for the offering, a regulatory filing with the U.S. Securities and Exchange Commission noted a proposed maximum aggregate offering price of $50 million. GameFly is working with investment firms Merrill Lynch and Piper Jaffray & Co. on the IPO.

GameFly's subscription-based rent-by-mail service has customers pay a monthly fee, which gives them the ability to borrow from GameFly's 7,000-game catalog via a website, play a game for as long as they want (while still paying the subscription), and then mail it back in exchange for another rental--a model similar to the Netflix video rental services.

As of September 30, 2009, GameFly said it had 334,000 subscribers. "We believe that online rental subscriptions will constitute a growing percentage of total video game-related expenditures and that our subscription service presents a compelling alternative for video game players who have historically either purchased video games or rented them from traditional retailers," the company said in its SEC filing.

GameFly also said its revenues grew to $84.7 million for the fiscal year ended March 31, 2009, up from the $15.8 million generated in the fiscal year ended March 31, 2005--a compound annual growth rate of 52 percent, the company said. The subscriber base for the 2005 fiscal year was just 74,000. GameFly calculated a 45 percent compound annual growth rate for its subscriber base.

The company said it plans on expanding its lead in the video game subscription rental market by focusing on attracting a larger amount of the 100 million U.S. console gamers (a figure reported by NPD Group), improving customer experience, building on its community, and expanding the reach of GameFly Media websites such as

The filing added that investing in GameFly "involves a high degree of risk," such as the effects of possible lagging subscription growth, a customer base that opts for lower-cost subscription plans, and the possible inability to compete with pricing pressure.

The "risk factors" section, which covers everything from the possibility of higher postage rates to possible adverse effects of an earthquake, also said, "If digital download or other technologies are more widely adopted and supported as a method of content delivery or other forms of online entertainment continue to grow in popularity, our business could be adversely affected" -- a caution that looms over any physical disc-based business.

Related Jobs

Remedy Entertainment
Remedy Entertainment — Espoo, Finland

Senior Development Manager (Gameplay)
Sucker Punch Productions
Sucker Punch Productions — Bellevue, Washington, United States

Sucker Punch Productions
Sucker Punch Productions — Bellevue, Washington, United States

Insomniac Games
Insomniac Games — Burbank, California, United States

Content Artist

Loading Comments

loader image