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Updated at 3:40 p.m. PST with a response from Gamefly CEO Dave Hodess.

Video game rental service Gamefly has launched a new movie rental business that will take on Netflix’s disc-by-mail business.

Gamefly began notifying its current customers about the service via email today, according to a post on video game fan forum NeoGAF. Currently in beta, the service will offer both DVD and Blu-ray discs to those subscribers. Like its game rentals, subscribers will be able request either one or two movies at a time and won’t need a separate account.

“We’re viewing this as a test based feedback we’ve received from subscribers who asked for it,” said Gamefly CEO Dave Hodess in an interview with VentureBeat. He added that the company plans to monitor data on movie rentals and make adjustments as necessary.

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From a business perspective, it makes a lot of sense that Gamefly would want to get into the movie business. Its game rental service has a similar distribution model and already has the warehouse and shipping infrastructure. Also, the major players in the rent-by-mail sector are focusing more on streaming video or are gone (think Blockbuster). For years, Netflix has predicted an end to its disc-based rental service, citing higher shipping costs, but this shouldn’t be as big an issue for Gamefly since mail rentals is still considered its core business.

What might be a bit of an issue for Gamefly is a potential backlash from game subscribers, who have often complained that Gamefly doesn’t stock enough copies of new releases of hot games or that its shipping is slow. And those subscribers might wonder why Gamefly is jumping into a new rental business without first fixing the core service. Yet as noted above, it seems that there’s also a crop of Gamefly subscribers who’ve requested movie rentals, too.

We’ve reached out to the company for more details as well as if the company plans on launching a streaming video service in the future. We’ll update this post with any new information we learn.

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