Rental Service GameFly Expands; Acquires Shacknews And Digital Download Service FileShack


imageGameFly is moving beyond just renting video games with the acquisition of Shacknews, parent company of a group of game news properties. Financial terms were not disclosed, though the companies said Shacknews’ editorial staff will remain in place.

Founded in 1995, Shacknews runs consumer gaming info site, downloadable content service, and newly launched game trailer and video hub ShackVideo. Shacknews founder Steve Gibson said the decision to sell the ad-supported properties didn’t come as a result of financial problems, per a news release on the site. GameFly is also faring well financially, according to PC World: the L.A.-based company opened new distribution centers in Austin and Tampa last year, and plans to open its fifth in Seattle by mid-2009.

Forbes notes that the deal preps GameFly to offer digital downloads — much like *Netflix* has — particularly as game publishers bundle more downloadable content into titles (and shift toward more digital distribution overall). GameFly faces a number of competitors if it decides to “go digital”: Valve offers Steam, Stardock runs Impulse, and gamers can also download a bevy of titles and add-ons through Xbox Live and the PlayStation Network. Release.

Updated: Gibson will be leaving the company post-acquisition, per Joystiq.

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