updated 07:40 pm EST, Wed January 25, 2012
Netflix to stay out of games for now
Netflix's CEO Reed Hastings in the call discussing his company's fall 2011 results reaffirmed suspicions that the company was no longer working on video game rentals. The decision to cancel the Qwikster spinoff had also ended plans to rent games at the same time. The still-united company would be focused solely on its movie and TV businesses.
The word came after investors were relatively optimistic for Netflix. Although its profits were down and it expected to start taking losses from international expansion in 2012, it also beat a consensus of analyst expectations. Most also pointed to the success so far of favoring streaming over physical discs. Streaming customers now outweigh disc customers by more than two to one, making DVD just a subset of a primarily Internet-focused business.
Dropped gaming plans are likely to be reliefs to GameFly and OnLive. Both hinge on gaming rentals and could have faced trouble by seeing a big name such as Netflix throw itself into the relatively young concept of renting games through the mail or online streaming.