Netflix Adding Video Game Rentals, Spawning Spin-off Qwikster

Big changes are afoot at video streaming and DVD-by-mail service Netflix. It’s splitting the business in two, with the Netflix half focusing solely on internet video streaming and a new company, Qwikster, handling the old school shipment of DVDs and Blu-ray discs by mail. It’s also about to start renting video games.

Netflix will do so through the Qwikster side of its business, says Netflix CEO and co-founder Reed Hastings in a blog entry, with video game rentals soon to be a part of subscribers’ queues.

“One improvement we will make at [Qwikster’s] launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games,” Hastings writes. “Members have been asking for video games for many years, and now that DVD by mail has its own team, we are finally getting it done.”

If you’re a Netflix customer who’s still holding onto the movies-by-mail option, this may be a great alternative to prominent video game rental service GameFly. But the Netflix-Qwikster split may cause some inconveniences in the form of two queues, two web sites to visit and other little issues.

Hastings explains “…if you subscribe to both services, and if you need to change your credit card or email address, you would need to do it in two places. Similarly, if you rate or review a movie on Qwikster, it doesn’t show up on Netflix, and vice-versa.”

In more positive sounding news for international customers hoping to get their Netflix on, Hastings has the following feel-good spin on the mail-order and internet service split.

“Netflix will offer the best streaming service for TV shows and movies, hopefully on a global basis. The additional streaming content we have coming in the next few months is substantial, and we are always working to improve our service further.”

More from Hastings, including an apology for Netflix’s “arrogance,” at Netflix’s official blog.

An Explanation and Some Reflections [Netflix]

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