Redbox Adds Video Games to Join GameFly, Blockbuster: Is Netflix Next?

Kiosk powerhouse Redbox announced it will offer video games in addition to movies, marking a new trend in the rental industry that Netflix may mimic.


Video games have always been secondary to movies at any rental outfit–a small section secluded in a store’s corner, next to the microwavable popcorn and Swedish Fish. When the store-based model waned, that trend continued online: Both Blockbuster and Netflix nixed video games from its by-mail services, focusing only on movies. But recently, the trend has started to change: Games are rapidly becoming the next frontier of non-bricks & mortar businesses.

This week, Coinstar subsidiary and kiosk powerhouse Redbox announced they will be offering video games right alongside movies. After testing the system for well over a year, the company, which rents DVDs to customers from vending machines for $1 per night, said it will begin rolling out games to many of its 24,000 kiosks across the U.S. Game rentals will cost just $2 per night.

In June 2009, Redbox hired a VP of video games, Mark Achler, who helped introduce the pilot program in several markets. The company is now expanding that part of its business, reflecting a growing trend in the rental industry. Video game subscription service GameFly has seen big success, and offers 7,000 titles for a monthly fee nearly double that of Netflix’s. The company is currently gearing up for its IPO. Blockbuster too realized video games were a strong point of differentiation, and in August added them to their movie subscription plan offerings for no additional cost.

The question now becomes: Will Netflix follow suit? We’ve reached out to them and haven’t yet heard back, but it seems unlikely. Video games still have a far different shelf life than movies–they take far longer to complete than your average 2 hour film. What’s more, video games are very costly. To offer them by-mail, GameFly has had to amp up prices, and to keep subscriptions reasonable, Blockbuster only offers older titles or many with a three month delay. Even $2-a-night rentals is steep–a week working toward completing a video game is not uncommong, but will run you almost as much as a GameFly subscription.

Most importantly though, Netflix has been very clear: CEO Reed Hastings has said explicity that streaming is the next frontier. Given that video games very much are only a disc-based solution, it’s very unlikely that we’ll be adding N64’s GoldenEye 007 to our queue alonside the James Bond DVD GoldenEye.

About the author

Austin Carr writes about design and technology for Fast Company magazine.