NetFlix and lower-priced DVD/Blu-ray purchase prices are not the only forces that have contributed to the demise of Blockbuster and other video stores. A major contributing factor besides mail-order videos, cheaper videos for purchase, and the ability to stream video is the most direct competitor of all: the ability to rent a video on a last-second impulse locally and cheaply. Redbox (and some lesser known competitors) have taken this niche by storm. If one wants breadth of choices, it's difficult to beat NetFlix. If one wants a current release now, it's difficult to beat Redbox. If one wants an older release now, there is a decent chance its available on NetFlix streaming. If one likes a movie well enough to keep it for a while, one can purchase it for a relatively low price in many cases. In fact, I have purchased DVDs and Blu-rays of popular movies for less money than Blockbuster used to force us to pay to rent a video for a few days!
With the recent announcement that Redbox now rents games, I'm curious to see how they will impact that market. An obvious positive of this is that a person can try out games before purchasing to see if he or she really wants to buy the game. Additionally, some games are fun for a short amount of time and a rental may cover the length of that time. Redbox isn't the first to rent out video games, but the promise of easy access to the latest games at convenient locations may be what makes this different.
Perhaps the biggest thing that contributed to Redbox's rapid adoption was the pricing scheme of $1 per night for as many nights as a customer had the DVD. This was simple to understand and allowed the customer to choose how long to hold the video and pay for that amount of time. One of the many things I did not like about Blockbuster was the justification of exorbitant rental rates because of the number of days they were rented for. I always felt like there should be a cheaper rental rate for fewer days because I often knew I'd watch a video that night and be finished with it. Redbox provided cheap, daily rate that seems more fair to most of us and allows the customer to customize their cost. A similar approach to video game rentals via Redbox could make this equally successful.
It appears that at the present time, at least for the particular Redbox I tried via online reservation, that the cost of the game rental will be $2 per day (with "24 hours" being the initial day). Two dollars is a price that even the paperboy would like. A two dollar initial "investment" in a game whose value seems questionable or which has received widely mixed reviews may be well worth it if it helps avoid purchasing a game for $40 or $50 that isn't satisfying. The $2 price per day is also not bad if one is fairly certain he or she only wants to play the game for a day or two or a weekend. In such a case, especially for newer games, it is likely to be far more expensive to purchase a game for just a few days use, even when considering the resale value of it afterward.
It appears that Redbox will carry video games for the three major consoles: Wii, XBox 360, and PlayStation 3. I expect it to be a popular service, though it may not have quite the impact on the gaming industry that Redbox has contributed to in the movie industry.