APRIL 12, 2010 • Blockbuster Online is testing a new Games By Mail service in the Cleveland area. The service is an added option to the existing Blockbuster By Mail program, with subscribers adding game rentals to their existing plan limits for rentals. Subscribers can add one game rental at a time, which will incur a $7.95 fee to their existing monthly rental plan cost. If no games are rented during a billing period, no extra charge will be added.

Impact: Blockbuster is still searching for a revamped business model that addresses consumers who are less inclined to make a visit to a video store in the face of Netflix and Redbox kiosks. With the games, the target competitor is GameFly, which does have as high a satisfaction rating as Netflix. There’s opportunity in online game renting, yet the realities can be daunting. Games taking longer to play and return than DVDs. No wonder that the biggest gripe with Gamefly is the time it takes to get titles out to consumers. To stock enough copies of popular games to satisfy customers would be prohibitively expensive.  We doubt that’s an investment that Blockbuster wants to make, which will make it difficult for the retailer to knock out competitors.