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Redbox Tests Game Rentals

17 Jun, 2009 By: Stephanie Prange, Chris Tribbey

DVD rental kiosk operator Redbox will experiment with video game rentals in a limited number of markets starting in August, the company said June 16.

Redbox did not offer details about where game rental kiosks would be tested, what gaming systems would be represented or specifics on rental pricing. The company didn’t offer details about whether the kiosks would operate independently from DVD kiosks.

The announcement comes as the video game industry saw software sales drop 17% in May, compared to May 2008, according to research from The NPD Group.

“I think the more family-friendly [game] titles would do well in kiosks and that getting them in front of consumers where they shop very often is another way to broaden exposure for gaming, which even with the strong growth over the past few years, is still far from fully penetrated as a form of entertainment so it definitely has more room to grow as it attracts new participants,” said Anita Frazier, video game analyst with The NPD Group.

Redbox will face competition from game rental kiosk operator e-Play, which will have its kiosks installed in 77 Northeast Wal-Mart stores. E-Play kiosks, which are also in Exxon and Speedway stations, also accept trade-ins for Wii, Xbox 360 and PlayStation 3 games.

Alan Rudy, CEO of e-Play, said Redbox’s limitations on the amount of discs a kiosk can hold may pose a problem in high traffic locations, and that trade-ins may not be possible, if Redbox uses the same bar code reading technology it uses with DVDs.

Wal-Mart was to install Redbox kiosks in the Northeast but used e-Play kiosks instead because of e-Play’s superior technology, Rudy said.

Both Redbox and e-Play will have to compete with online game rental leader GameFly, and Blockbuster Inc., which announced in late May that beginning June 30 it would start testing online video game rentals in the Cleveland area, via its Blockbuster Total Access subscription program.

“This pilot allows us to test a variety of implementation details and gather invaluable key learning and consumer insights before finalizing and launching a national online game rental offering,” Bob Barr, VP and GM of Blockbuster.com, said when that announcement was made.

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