Blockbuster Offers Online Video Game Rentals11 Feb, 2009 By: Erik Gruenwedel
Blockbuster Feb. 11 said it would begin testing by-mail game rentals in the second quarter.
The Dallas-based No. 1 DVD rental service said it would offer select Blockbuster Total Access subscribers the option to rent games online and return them in-store for half-price exchanges. Total Access allows for free in-store Blu-ray and DVD movie rental exchanges.
Video game rentals are considered a $1 billion market segment, compared to $8 billion for DVD and Blu-ray rentals, according to Adams Media Research.
Blockbuster, which claims the largest video game rental market penetration, would be a formidable presence in a niche segment started in 2002 by online game rental pioneer GameFly, which offers subscription plans starting at $15.95 per month for one game. Other online players include Gamerang ($17.95), Gottaplay ($12.95), RentZero ($13.95), GPlay ($14.95), NumbThumb ($11.95) and GameznFlix.com at $8.99 per month.
Blockbuster’s by-mail rental plans for movies and games are priced from $3.99 per month for one title.
“A combination video game and movie online offering, with in-store exchange privileges, is a tremendous value and convenience,” said Bob Barr, named last month to the position of VP and general manager of Blockbuster.com.
The Blockbuster pilot program, which includes game titles for Nintendo’s Wii, Sony’s PlayStation 2 and 3, and Microsoft’s Xbox and Xbox 360, will be rolled out nationally later this year.
Movie Gallery and Hollywood Video offer video game rentals in-store, including at its Game Crazy locations.
Edward Woo, research analyst with Wedbush Morgan Securities in Los Angeles, said game rentals historically represent about 10%-to-15% of total rental revenue for Blockbuster and Movie Gallery.
Online DVD rental pioneer Netflix does not rent video games, but its association with Xbox 360 affords its respectability among gamers, according to analyst Tom Adams.
“It’s a smart movie for [Blockbuster] and offers something of a counter to the Netflix/Xbox partnership,” Adams said. “It’s not a huge revenue opportunity but a good competitive move.”