Games Are in the Passing Lane at Blockbuster6 Jun, 2002 By: Joan Villa
Blockbuster sold 100,000 games “freedom” passes in just over a week after the summertime offer launched Memorial Day weekend, chairman and CEO John Antioco said during an investor presentation to Deutsche Bank.
“We have sold 100,000 game passes since [launch] without any advertising push behind it,” he said. The pass costs $19.99 per month and allows consumers to rent any combination of two games at one time during the 30-day period.
Blockbuster will focus on cross-merchandising the category for customers who are gamers but only visit the stores to rent movies, he added. Games grew from 10 percent of revenue in 2001 to 13 percent in the first quarter of this year, and generate $200 million in annual gross profit for Blockbuster, which is on par with game specialty chains, he noted.
Antioco also said the chain expects to double the 5 percent market share it enjoys in selling new DVD movies.
“Retail movies are something that historically we have not gone after,” he explained. “The average disc is sold at retail at somewhere around a $3 profit. If we can convert a rental from a $2 average gross margin to a $3 sale, we're happy with that conversion also.”