GamesBeat

Redbox jumps into video game rentals

Redbox, which runs several kiosks in stores that let individuals rent movie DVDs at cheap rates, announced Thursday that it is introducing video game rentals to around 21,000 of its kiosks.

The company had announced in April that it planned to bring video games to its kiosks. The games are now available to rent. The vending machines will feature some of the most popular games available to consumers today, including games like Call of Duty: Black Ops and LA Noire. Redbox will only be offering games for the PlayStation 3, Nintendo Wii and Xbox 360 for now. The Nintendo DS, an equally popular gaming device, is not on the list. Consumers can rent the games for around $2 a day.

While Netflix has flourished with its online streaming and mail-order rentals, Redbox has focused more on the impulsive in-store rental. Thus, while they compete, Redbox and Netflix target customers in different locations (home versus in a store). Netflix also does not have a game rental service yet.

A person shopping for groceries at a local store like a Safeway or Kroger can pick up a movie on the way out of the store for around $1 or $2 from a Redbox vending machine. Redbox also eliminates some of the lag time between ordering a movie from Netflix and waiting for it to arrive through the postal service, though Netflix’s online streaming service offers truly instant gratification and has become increasingly popular.

Gamefly, another online rental service, operates much in the same way that Netflix does with mail-order game rentals. But because Redbox has not negatively impacted Netflix’s business, Gamefly might also remain unscathed because it has a similar business model — though it does not have an online streaming service.

Another company, OnLive, runs a streaming service for games that is the closest equivalent to Netflix’s movie streaming rental service, and it has also done quite well for itself.

The main casualty of these video rental startups has been Blockbuster, a brick-and-mortar rental store that filed for bankruptcy last year. It relied on individuals coming to the store to rent games and movies with the risk of steep late fees and was late to bring online movie streaming to its website. Dish Network recently bought Blockbuster for around $228 million to take advantage of its movie streaming service and movie rental kiosks.

Consumers can reserve the games they want to rent through the Redbox iPhone and Android applications.


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