Blockbuster and Gamefly are enablers with a capital E. Don't even get me started on Gamestop. According to Webster's dictionary:
: one that enables another to achieve an end; especially : one who enables another to persist in self-destructive behavior (as substance abuse) by providing excuses or by making it possible to avoid the consequences of such behavior.
Can you name one other industry which distributes first run product in an ancillary channel on the very same day it releases in its primary channel. We put out games and expect consumers to pay $60 on the very same day we allow them to pick it up at Blockbuster for 1/12 the price, or Gamefly by ticking a box. What the fuck is that?
When I was at Eidos, in 1997, Blockbuster was just entering the game business. They called and asked me to supply games to them for rental. I quickly did the math - I have this Tomb Raider game that is about 16 to 20 hours long, people may play through the whole game once, and most don't play more than half, they usually stop playing after a week or so and never pick it up again, they pay the retailer $50, of which I get $16 to my bottom line . . . . you want to give that person the same game for the same period of time and then give it to someone else, and someone else, and someone else, and only pay me once? My brilliant grasp of the obvious led me to the conclusion that this was just not a good business decision. They kept calling back telling me things like "people will play the game and then want to buy it." This was an interesting point coming from a company which at the time operated an entire business renting movies and did not sell them. Despite movement into the market by other publishers, I never agreed to allow rental.
Looking at the market today, the publishers are being hosed. Games are getting shorter. This is not a bad thing, because overall, they are also getting better. However, replayability is a publishing fallacy. Sure my son watched Daddy Day Care a dozen times, but other than the hardest of the hard core, how many of us have ever picked up a game once it was completed? Unless a game is built for multiplayer like Halo or Call of Duty, people play them once and move on. Even Bioshock is only replayed by a select few.
Blockbuster and Gamefly are purchasing game units, but they are significantly eating into sales, and therefore revenue, and therefore future growth and expansion of the business. Publishers have to stop looking at rentals from Blockbuster and Gamefly as beneficial and look at them for what they really are, lost sales.