It will offer titles from developers including Ubi Soft - whose games include ET, Batman and Disney's Tarzan - on a rental basis to boost the popularity of gaming among the wider public.
The service is being launched as part of a broader deal struck by parent Lycos Europe with media commerce development firm Edge Media Network.
Edge Media Network will integrate its Chameleon 24:7gaming service, which lets users rent or buy games, into Lycos Games.
Chris Miles, co-founder of Edge Media Network, said: "The aim is to grow the games market and this is aiming at the casual gamer. Eighty per cent of households with PCs don't buy PC games because they can cost about £30 on the high street and people want a more piecemeal approach. Low-cost rentals will drive uptake."
For £12, Lycos Games members receive a DVD that holds about eight games and three electronic rental vouchers.
The vouchers are worth £4 each and work as an electronic key to allow gamers to access a particular game on the DVD and play it on a PC for three days before blocking the service again.
Vouchers can be purchased at an online store within the service, with the price dropping as more vouchers are bought.
It is understood that games will be offered by a number of other as yet unnamed high-profile games development firms.
The channel will also be boosted by a range of classic games, such as Frogger, and links from Lycos' Entertainment channel.
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