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Redbox Giving Video Game Publishers a Rental Assist

2 Jul, 2014 By: Chris Tribbey, Erik Gruenwedel

Kiosk vendor working with publishers targeting recreational gamers through emails and apps

Redbox has redoubled efforts to attract casual players of video games at a time when the industry is transitioning toward streaming and electronic gaming. 

The kiosk vendor, which launched video game rentals in 2011, has found it can be a catalyst for game purchases by allowing consumers to rent titles first at $2 a day. Citing internal research, Redbox says 50% of survey respondents, who classified themselves as recreational gamers, said they wouldn’t buy a game unless they could try it first.

By comparison, hardcore gamers tend to buy new releases on street date and then trade them back for store credit at retailers such as GameStop, Best Buy and Walmart.

“We have a 20% to 50% conversion rate of purchasing the games they rent first,” Ryan Calnan, director of video games at Redbox, told AlistDaily.com.

Calnan said recreational gamers are typically older than hardcore gamers, have families and higher household incomes ($61,000 vs. $52,000). They also prefer physical discs to digital but only play games about six hours a week compared with 15 hours weekly for hardcore gamers.

“We’re engaging consumers beyond the hardcore gaming audience,” Calnan said. “There’s a large group of recreational gamers that are bringing incremental sales to gaming.”

The kiosk operator currently rents games for Wii, PlayStation 3 and Xbox 360 at its 42,000 locations. It just launched titles for PS4 and Xbox One in 12 markets, including Atlanta; Austin, Texas; Chicago; Denver; Orlando; Sacramento, Calif.; Salt Lake City; San Antonio, Texas; San Bernardino, Calif.; Seattle; Phoenix; and Yakima, Wash.

Redbox is working with game publishers to get new releases in front of renters via targeted emails, product placement in kiosks and packaging. Publishers Deep Silver and Square Enix worked with Redbox to attract recreational gamers to their respective new releases Saints Row 4 and Thief.

Redbox ran trailers of the titles on its website, in addition to embedding them on targeted emails and the kiosk vendor’s app. It also coordinated similar marketing programs for Activision’s Transformers: Rise of the Dark Spark and The Amazing Spider-Man 2, in addition to Little Orbit’s How To Train Your Dragon 2.

“Our recreational gamers gravitate to games they can pick up and play easily,” Calnan said.

He said Redbox worked with Sony Computer Entertainment to cross-promote MLB 14: The Show by including a link with the annual Major League Baseball title that enabled renters to try PlayStation Network for free.

Meanwhile, Calnan, citing data from The NPD Group, said consumer demand for physical discs remains strong due to a longtime “emotional relationship” with packaged media.

"I don't see [streaming] as a challenge," Calnan told GameSpot.com. "I think that both can live side-by-side. We're expanding the edges of gaming, and I think that customer is very much attached to that physical product still."

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