GameFly Announces Initial Public Offering
It appears that GameFly wants to be publicly traded. The game rental service, founded in 2002, is working with Merrill Lynch and Piper Jaffray & Co., though no further details have been released in regards to price or quantity of stock. During its filing it had the following comment: "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 flipside of the same argument is having to outline possible risks, which they express as the possibility of lagging growth in a customer base, possible other ventures with lower costs they would not be able to meet, higher postage rates, and even earthquakes' effects on its services. The last tidbit they proffer is concern over what would happen if digital distribution takes hold. While that may be a concern for PC, I think we have a while to go before digital distribution fully takes hold of the console market completely or even in majority.
One has to wonder what this signifies. Is GameFly stuck in seeking to expand? I use its services, and being in Chicago, it can take some time to get something from the center in Philadelphia, so if this meant more distribution centers, I'd be happy. Or is this worry over a future they do not see as friendly?
Rent-By-Mail Service GameFly Files For IPO [Gamasutra]
VorpalBunny
Posted to Miscellany on 11 February 2010
· Comments (1)
Other stuff like this: business, gamefly, ipo, sec
I love GameFly, and I live in the same city as a distribution center so I get a one day turnaround. :)
However, I'm not sure about their long term prospects if things go to digital only, because then if rentals still exist I'm sure it'll be MS/Sony/Nintendo holding the keys. It's not like Netflix where the digital transition is obvious.