Blockbuster Inc. is hoping to do for game rentals what Netflix did for movie rentals: revolutionize an industry with convenient online ordering and home delivery.
Blockbuster will roll out an online game rental service starting June 30 in Cleveland, the company announced today. It plans to expand the service nationwide by the end of the year. The company will rent games for Wii, PS2, PS3 and Xbox 360 devices. The company announced plans for an online game-rental service in February.
It’s not the first online game rental company-GameFly.com, No. 274 in the Internet Retailer Top 500 Guide, has been renting games online since 2002. But at No. 37 in the Internet Retailer Top 500 Guide, Blockbuster is a far larger company with a nationwide marketing and advertising presence and a base of customers who already rent games in stores. In the first quarter, game rentals accounted for 8% of Blockbuster’s U.S. store rental revenue-$54 million, about the same as in Q1 a year ago. Movie rentals were down 18% year over year.
Last year, Blockbuster’s U.S. game rental revenue reached $220 million, flat compared to the year before. By comparison, GameFly’s 2008 revenue was $31.1 million, according to the Internet Retailer Top 500 Guide. Blockbuster’s U.S. movie rental revenue fell 5% last year to $2.27 billion from $2.39 billion a year earlier.
“Blockbuster stores already rent more video games than anyone else-in-store or online-so giving consumers the ability to rent games from our online service is a natural progression for our business,” says Bob Barr, vice president and general manager of Blockbuster.com. “This pilot allows us to test a variety of implementation details and gather invaluable key learnings and consumer insights before finalizing and launching a national online game rental offering.”
Subscribers will be able to add their game choices to their current online rental lists. Customers will pay the additional game fee only in the months that they have received games. For a set fee, subscribers can rent as many games as they want during the month, with one game out at a time. The game rentals will count toward the total number of rentals subscribers are allowed under their online subscription plan. Subscribers to Blockbuster’s Total Access service will get the same in-store exchange benefits for games as they do with movies under their current plan.
The Blockbuster By Mail plans offer online-only service, with online rentals delivered and returned by mail. Blockbuster Total Access plans deliver online rentals by mail and provide the option of exchanging online rentals for free in-store movie rentals or discounted game rentals up to monthly plan limits.