Actually it is, in Gamefly's case the developer would never receive any of the income regardless and Gamefly is a console only service. PC is a pretty large part of the market and effects both console and PC. These are games that are being purcchased, the developers are actually making a potential profit.
Developers aren't dragging the first two hours of the game out because of Gamefly, where it's a 100% loss. They're doing so because if they can pad the game out then the game won't feel like such a short experience, or the opening is dragged out so long that the player doesn't even really get to the actual game until that two hours.
But take Wallachia for example, if you finish the game in an hour, then you just get a refund. If you were to play a game for two hours and it says you're 50% of the way through, maybe you refund it and get the $30 you spent back, some gamers may feel like they've played enough of the game.
Chronicles of the Wolf for example requires you to go from one side of the games map, to the other side of the map, then once you get past this one side of the map then you go back to the other side and make your way all the way to the next town, then you have to go all the way back to the town on the left side, then back to the same area on the right side. Now, this doesn't sound that bad, but if you're having trouble finding what you need in each of these areas because you don't exactly know where you need to go. I know where you need to go in these instances, now, but the amount of time I was wasting in each instance was just infuriating. And apparently, the game is around 10-15 hours long. I've so far played six hours and I'm 60% of the way through according to the game and I think that where I'm located at right now I might actually complete it sooner than 10 hours. I mean honestly, it's been more than 10 hours if you consider deaths or exiting the game so I didn't keep any experience points that I didn't have to because that's another issue entirely, the unintentional level grinding caused by the games padding. So there's not only a lot of padding on my save data and a lot of padding(where I've exited not my deaths) that I just didn't want to go keep the playtime, experience points, etc as I didn't make any progress.
I think on a replay this game would be a much better game when you know exactly where to go in order to progress, an altogether great game, but the first playthrough, the amount of padding that each one part in each instance that allows you to make any progress, it's an absolute shit show of an experience.
Here's a video from Reggie and he's already been to the second town based on his commentary. I didn't watch the entire thing he finally gets to the games second boss in an hour and 30 minutes. Something that off the top of my head, I could do in 15-20 minutes FROM THE START OF THE GAME now that I know where to go. That's how bad the games padding is.
https://www.youtube.com/watch?v=ueVBy-aNM6I
Now would I recommend Chronicles of the Wolf? Yeah, especially if you plan to replay it like any Castlevania game as future playthroughs will remove all that trial and error on where do I go or what do I do in order to progress. At that point the things the game does well will really shine while the main issue won't be as much of a standout disappointment.
*edit*
And let me also make an edit here about Gamefly. Not only does the game have to release physically, but they would be purchasing the game like anyone else to rent the items out. They don't just have an infinite amount of stock, making the determination of how many copies of each game will they need. They don't want too few copies, they don't want too many copies, as they might lose customers or they might just have games they can't get people to rent and essentially lose money that way. And you also have to think, this is a monthly service. Are people even going to be willing to use their monthly subscription for delivery of a game that's only $20 to order digitally and $30 to order physically? If you use the cheapest option of $13.50 the delivery time back and forth the time you spend to play the game before you get the next game, even if you immediately dislike the game. I would have to assume the turn around is more than a week.
And I doubt Gamefly is used by many people, because if it was, Blockbuster would have never went under as they started to do the whole Netflix delivery plan where you order the movies online, but unlike Netflix where you have to mail them back you could actually drop them off at your local blockbuster store for check in and they were instantly recognized as you could potentially receive games or movies play or watch them that night, return them before the store closes and your next delivery would already be on its way. Netflix had already moved towards the combination of delivery and streaming at that time, the streaming being much more populaar.
The Netflix delivery service is so popular that Netflix has ended the service, so yeah, Gamefly rentals aren't effecting sales.
But that two hour Steam refund is changing how games are developed when people cna just play a game for a few seconds and return it. And that's screwing everyone, not just owners of the games on Steam. And according to Google 50% of the non mobile gaming market is PC, so of course developers are going to make sure that they can capture what will keep their games from not getting refunded on PC and then consoles where you can't refund games unless they're just absolutely broken.