Video game rental service GameFly has been purchased by Alliance Entertainment, a company which purports to be the largest wholesale distributor of music and movies in the US.
The terms of the sale, including the final purchase price, whether it was all cash or mixed cash-and-stock, and other details have not been made publicly available. Alliance’s CEO, Jeff Walker, appears to have taken over the CEO role at GameFly, replacing previous CEO David Hodess. Additionally, Alliance SVP of Sales Tim Hinsley will be taking over as GameFly’s new president. In a press release, Walker stated, “Alliance is the largest distributor of physical media in the US, and we’re using our expertise with GameFly’s nearly 20 years of experience in subscription game rentals to imagine new offerings that previously were not doable.”
Alliance has partnerships with major entities such as Funko, Fantasy Flight Games, and Wizards of The Coast. According to reports on Gamasutra and Gamesindustry.biz, GameFly’s digital channels are now showing new products such as movies, accessories, and collectibles. GameFly will be looking to improve their core subscription service by expanding the catalog of games available for rental. Alliance’s press release reportedly indicates that GameFly will continue to operate as an independent entity.
Food For Thought
This move sounds suspiciously like a hostile takeover of GameFly. When a CEO isn’t offered any role in the company post-acquisition, especially when the particulars of the deal have been kept under wraps like this, it doesn’t sound like the transaction was amicable compared to something like the recent acquisition of Bethesda by Microsoft. The appearance of game accessories and collectibles gives the impression that GameFly is somehow trying to duplicate the potential catalog offerings of GameStop. Indeed, the “new and improved” GameFly sounds like a mashup of GameStop, Netflix, and Amazon, or at least is attempting to be something along those lines. How well it will fulfill its customers’ expectations is anybody’s guess.