The United States Postal Service has denied that it is providing preferential treatment to the competitors of videogame rental-by-mail service GameFly, and today filed a motion to partially dismiss the company's complaint.

"In short, the Complaint lacks merit and fails to articulate grounds for any relief," said the USPS in its 26-page response. "[GameFly] seems to believe that problems of its own making can somehow be solved by the Postal Service when, in fact, they cannot--at least not without incurring costs that would be a disservice to all other mailers."

GameFly, the parent company of Shacknews, filed a formal complaint against the USPS in late April. It alleges that the USPS "adopted a practice of manually culling out the DVD mailers" of Netflix and soon-to-be-rival Blockbuster, providing the "high-volume shippers" with "special processing" that reduces the amount of broken discs and supplies a "substantial cost advantage" in mailing-related expenses.

The Postal Service strongly denied that it is providing preferential ... Read more

Online game rental service and Shacknews parent company GameFly today filed a formal complaint against the United States Postal Service, alleging that the USPS provides competitor Blockbuster with preferential treatment to cut down on broken discs.

"GameFly is not the only mailer to experience significant DVD breakage rates on automated mail processing equipment," reads the filing. "In response...the Postal Service has adopted a practice of manually culling out the DVD mailers of two high-volume shippers of DVDs, Netflix and Blockbuster, for special processing."

The company said its request for manual processing "comparable" to that of the movie rental services was denied, which puts GameFly at a disadvantage as its "larger and longer established" rival Blockbuster plans to rent games by mail... Read more

Rental company Blockbuster today announced plans to begin offering online game rentals to its Total Access subscribers by the second half of the year.

The company will initially launch a pilot program during the second quarter of 2009, allowing a select number of Total Access members a chance to test the service. Blockbuster says it will offer games for the PlayStation 2, PlayStation 3, Xbox, Xbox 360, and Wii platforms.

While the release notes that existing Total Access subscription plans will simply gain video game rentals as a bonus, a Joystiq report adds that subscribers will be charged $5 once per month for in-store exchanges of games.

The pilot program will be testing an "integrated plan" of movie and game rentals, allowing customers to rent both types of media at once under an existing subscription.

Rental agency Blockbuster has announced several efforts to expand its presence in the video game sector, beginning with the placement of high-profile video games such as Mario Kart Wii and Grand Theft Auto IV in the formerly movies-only "New Releases" section.

The company further boasted that all of its corporate-owned branches in the United States are now stocking and selling software, hardware and accessories for the PlayStation 3, Xbox 360, Wii and Nintendo DS.

To celebrate, the Blockbluster revealed an exclusive PlayStation 3 bundle--containing a 40GB PS3, HDMI cable, Traveller's Tales Transformers: The Game, Blu-ray Remote Control, Spider-Man 3 Blu-ray disc, and 12-week PS3/Blu-ray rental card--is now selling for $499.99.

The retailer had previously attempted to get into the retail games business through the opening of GameRush stores within select Blockbuster locations, which allowed gamers to buy and trade gaming paraphernalia for new and used games and hardware.