By launching an online video-game rental service,
is boldly going where several have gone before -- and failed.
As part of its ongoing effort to find new products to sell to its users, the Internet bellwether said Monday it would start renting PC-based video games that people could download temporarily over the Internet.
Charging as much as $14.95 per month for the service, Yahoo! is betting that its online marketing reach, aided by the ever-growing number of people with broadband connections to the Internet, will enable the service to succeed despite the record of disappointment suffered by
and others in the online game rental business.
Under Terry Semel, the Hollywood veteran appointed chairman and CEO of the company last year, Yahoo! has sought to recover from the dot-com advertising implosion by diversifying its revenue with a number of fee-based and subscription services.
The company's shares, which went north of $200 in late 1999, are down 57% from the 52-week highs reached during Semel's tenure. Yahoo!'s shares dropped 67 cents Monday to close at $9.08.
The new Yahoo! Games on Demand service is part of Yahoo!'s companywide initiative to deliver new services to people with high-speed Internet connections, says the company.
"With the strength of our Yahoo! Games platform," said Yahoo! executive David Mandelbrot in a statement, "the addition of Yahoo! Games on Demand allows us to develop deeper relationships with casual and devoted game players alike."
The games on demand service builds on Yahoo!'s recent debut of a broadband service co-marketed with
, though the games are available to anyone with a broadband connection and a computer meeting certain technical requirements.
Initial pricing for the service starts at $4.95 for a three-day rental of one game. Monthly packages range from $9.95 for three games to $14.95 for 10. The service is launching with more than 40 titles, nearly all of which were originally released, according to the service, in 2001 or earlier.
This isn't the first time that companies have tried to sell subscriptions -- on a monthly or hourly basis -- to a menu of games. In the 1990s,
purchased an online gaming service, but later unloaded it on America Online. The pre-
AOL Time Warner
AOL offered supplemental-fee gaming for a time. The Sega Channel -- a cable TV service that downloaded games to owners of old Sega video game machines -- shut down in 1998. In the early 1980s, a similar cable service based on
Intellivision met defeat as well.
Though high-speed Internet connections and the nearly ubiquitous Windows platform will ease the distribution difficulties faced by earlier players in this market, the improved technology won't solve all the difficulties faced by the new service. Many of the older games in the catalog -- or reasonable substitutes -- can be bought in stores or online for only slightly more than a one-time rental fee. And for roughly the same prices that Yahoo! is charging, fickle gamers can rent newer platform titles from video stores.
Other companies are mining for online gaming revenues, though not using Yahoo!'s approach.
offers free and fee-based games online, but sells access to the paid games on a game-by-game basis, not as a package.
In a sign of how the service might seek to distinguish itself, one of the titles in the Games on Demand debut catalog -- Zapper, from
-- is available before it will be sold in stores, says Yahoo!.