OT: Gamefly, which is implementing a business model that is similar to Netflix, has filed an S-1:
Gamefly, Inc. registration statement
We are the largest online video game rental subscription service in the United States with more than 334,000 subscribers as of September 30, 2009. We provide our subscribers access to a comprehensive library of over 7,000 titles covering all major video game and handheld game consoles. There are over 100 million people that play console video games in the United States, according to the 2009 Gamer Segmentation Report published by The NPD Group, or NPD. 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.
Our subscription service has grown rapidly since its launch in 2002. We believe our growth has been driven by the compelling value proposition of our subscription model, extensive selection of titles, high level of customer service and effective marketing programs, as well as the increase in the installed base of video game consoles. We purchase nearly every new title upon its initial release in the United States. In addition, we continue to carry in our inventory approximately 95% of all titles that have been released across multiple generations of the major video gaming platforms since the inception of our company. As evidence of the demand for games well after their initial release dates, more than 50% of the video games rented through our subscription service during the 12 months ended September 30, 2009 consisted of titles six months and older.
Our subscription service allows subscribers to have one or more video games out concurrently with no due dates, late fees or shipping charges for a fixed monthly fee. Subscribers select titles on our website, www.gamefly.com, receive video games via First-Class Mail and return them to us at their convenience using our prepaid mailers. Subscribers also have the option to purchase a video game they are currently renting through our "Keep" feature. Upon confirmation that a video game has been returned or that a subscriber has elected to "Keep" a video game, we mail the next available game in a subscriber's GameQ, a subscriber's personal wish list of titles. We believe a significant value we offer to our subscribers is the ability to rent video games before they buy them. According to our August 2009 survey of subscribers, "try before you buy" ranks as the most important feature of the GameFly service. In addition to selling video games through our "Keep" feature, we also sell new and used video games to our subscribers and others through www.gamefly.com.
To complement our subscription service and video game sales, we operate a network of advertising-supported websites that provide video game content and information. Our network of websites currently attracts approximately 4.4 million monthly unique visitors, most of whom are not subscribers. We focus on providing these visitors with video game-specific content to enhance their video game experience, which we believe increases our subscriber satisfaction and enables us to attract new subscribers. We have attracted premium advertisers who seek to reach the 18-34 year old male demographic.
Our revenues increased from $15.8 million in the fiscal year ended March 31, 2005 to $84.7 million in the fiscal year ended March 31, 2009, representing a compound annual growth rate of 52%. Our subscriber base increased from approximately 74,000 as of March 31, 2005 to more than 328,000 as of March 31, 2009, representing a 45% compound annual growth rate. |
