Online computer game rentals have emerged as a very real threat to Australian video retailers following the launch of the country's first online subscription service.

Telstra BigPond on Tuesday launched its GameNow Web site, a pay-by-the-month download site of nearly 100 full-version computer games.

For a flat rate, GameNow customers can download and play as many games (and as many times) as they wish. Major titles include Splinter Cell and MechWarrior 4.

Each game works after a 'one-off' caching download, which starts the game. The rest of the game is then streamed to the user's PC as he/she progresses.

"There's no technical differences between the version of a game on GameNow and, say, its PS2 version," BigPond managing director Justin Milne said.

"It's just that the release windows are different. At the moment, we have the second-latest version of Splinter Cell, while the stores have the latest. But over time I think you'll see that even up."

Milne said more games will be added to the site each month.

The site is deliberately pitched to broadband users, as some high-end games require more than a two hour download wait.

"You'd be a mug to have dial-up on this," BigPond content director Guy Gadney said.

GameNow joins BigPond's GameArena site, which launched in 2002 and is aimed at multiplayer communities.