Blockbuster announces new initiative, looks to game hardware sales

Just weeks after the rental giant announced an expanded dedication for Blu-ray and even tried selling HDTVs in a test location in Dallas, now the firm is attempting to boost profits by digging into the surging video game market. Presumably in hopes that rental junkies and casual gaming fans alike will actually venture into Blockbuster in order to buy their next Wii, DS, Xbox 360 or PlayStation 3, the outfit has announced a new focus that will push the retail video game / game hardware aspect in all of its US-based corporate-owned stores. This includes consoles, a more fleshed out array of games and all the accessories your wallet can handle. Heck, it's even offering up an exclusive 40GB PS3 bundle ($499.99) with the Spider-Man 3 Blu-ray Disc, a PS3 remote, Transformers (the game) and a rental card giving purchasers a free PS3 game / BD rental per week for 12 weeks. Color us completely enthralled.

[Via Joystiq, image courtesy of Portfolio]

[vypergts @ Apr 29th 2008 9:01AM]

Blockbuster = an outdated business model with an identity crisis.

[Craig @ Apr 29th 2008 9:22AM]

Renting DVDs via mail is great, but we chose Blockbuster over Netflix because the combination of movies by mail PLUS being able to walk into my local store, hand them two mailers and walk out with two new rentals, is incredibly convenient.

It'll take a while for the # of people downloading movies to overtake the # of people who rent DVDs, so I wouldn't count out this business model just yet. As much as I hated Blockbuster in the past, I'm at least glad they're trying new things...maybe something will stick.

[looseinthedeuce @ Apr 29th 2008 9:29AM]

No, it's just a company that got ginormous and had the market cornered...then Netflix showed up (woot, Netflix!). Blockbuster was raking in the money before because they charged (and still charge) way more than they needed to. They just need to back-off on the cost per rental and trim their margins.

I think they're onto something with the video games though; Netflix doesn't do those (yet), so it could be good to ramp up the video gaming. But they need to cut back on the rental cost of those too.

[Jon @ Apr 29th 2008 9:57AM]

i Agree with Craig .. I take my 3 dvd's i get in the mail (for the same price as netflix mind you , i was grandfathered in) and get 3 brand new movies off the wall , Bluray as well and walk out , no charge , no hassle , in and out , so im getting 6 movies for the price of 3 and they send me my movies the same day PLUS they give me 2 coupons for game rentals each month .. I see NO reason to go back to netflix , to stream some crappy movies on a pc ?? Until you can stream HD movies (real HD mind you,not watered down) forget that ..

[Nick M. @ Apr 29th 2008 11:06AM]

I think Netflix in a addition to rolling out these set top boxes.. needs to maybe consider looking into either a deal with Gamefly or think about expanding into video game offerings.

I will admit that the blockbuster deal is a good one, and having the option to walk in the store is pretty nice because maybe you aren't in the mood for the type of movies that were sent to you from your list. A couple of times I have gotten a Documentary and something like Pan's Labyrinth thats heavy and dramatic and just been in the mood for something funny. BUT, I can't bring myself to giving money back to the evil company that decided to screw me over and jack up prices ever since it got a strangle hold on the market.

[nDee @ Apr 29th 2008 12:00PM]

Soon they are selling condoms - or whatsoever

[ZeroCorpse @ Apr 29th 2008 3:43PM]

Ahh, but while you're driving to the store to select your movies from the wall, and you have a limit to how many you can get on the Blockbuster program, we Netflix users can pop online and instantly watch hundreds of movies and TV shows-- An unlimited number of them-- without so much as a 2-minute wait.

I did both programs, and I've been in management at Blockbuster (as well as every other major video chain) and I believe the Netflix Instant Watch feature is far more valuable than the Blockbuster retail/online combo. It's great for things that have multiple discs, like TV shows. The quality is quite high, and the selection is decent and getting better all the time.

As for video games, Blockbuster will not be able to catch up to GameFly. Blockbuster's pricing on game rentals is terrible. For a couple game rentals at Blockbuster, you can rent an unlimited number of games from GameFly with no time limits or due dates.

However, game rentals are a dying thing. With online services like Goozex making it easy to just swap games with other gamers, the need to worry about subscriptions-- or even money changing hands-- is fast coming to an end.

[Timmy @ Apr 29th 2008 9:06AM]

So will they have the video games edited for content like they did their movies?

[DJ @ Apr 29th 2008 9:09AM]

Game Crazy/Hollywood Video has been offering similar deals for several years. Purchase ANY gaming system - PSP, DS, Wii, PS3, Xbox, etc., and you get a free rental each month for a year. Plus, they offer an excellent reservation program. I was able to reserve a Wii with a $50 deposit in August of 2006 and on relaese day in Novemebr 2006, I simply walked in the store, paid the balance and picked up the unit.

[unoqualsiasi @ Apr 29th 2008 9:13AM]

I don't know what's the offer in the US, but in Italy Blockbuster already sells videogames and gaming hardware...

[Rich @ Apr 29th 2008 9:52AM]

Same in the UK. Decent prices too.

[Rob @ Apr 29th 2008 10:30AM]

They also have been selling them in Canada as well, at least in the two stores that I worked in. The thing was that Sony products were favored the most; me thinks extra "advertising" money was involved.

[ahdok @ Apr 29th 2008 9:17AM]

Do they know that the transformers videogame is pretty much universally accepted as one of the worst games ever produced?

[LiqwidZero @ Apr 29th 2008 9:20AM]

Yeah... When Spiderman 3 came out on BD, Blockbuster was selling this/something like this.

[eric f. @ Apr 29th 2008 9:23AM]

I purchased Madden 08 for the 360 at Blockbuster when it was released this past summer. I would certainly buy games from them, since they are on my corner... but I already have all the consoles.

[jgrnt1 @ Apr 29th 2008 9:28AM]

Great....another place to sign up for an out of stock Wii.

[looseinthedeuce @ Apr 29th 2008 9:31AM]

Then what are you doing on Engadget? Oh, you DIDN'T buy it at midnight? See, I just figured 'cause you're a douchebag.

[matt @ Apr 29th 2008 9:45AM]

So basically they want you to buy/rent all of the things that are more expensive than movies. A truly clever plan! I should've been a business major.

[anabouboula @ Apr 29th 2008 9:46AM]

Take that Apple!

[J. sykes @ Apr 29th 2008 9:48AM]

If they really want to be gamer friendly...

STOP REQUIRING CREDIT CARDS TO RENT NEXT-GEN GAMES.

I've pretty much giving my money to Gamefly after so many years of Blockbuster membership, just on this one thing alone.

[tiuk @ Apr 29th 2008 10:13AM]

It'd be nice if they'd also stop charging $11 to rent Xbox 360 games. That was the last time I ever rented a game from there (used to rent N64 games all the time 10 years ago).

[eric f. @ Apr 30th 2008 10:27AM]

@ J. sykes,

UM, you don't use a CC for Gamefly? And who the hell doesn't have a debit card from their bank these days?

@tiuk,

single game rentals (for 360,PS3,Wii) at BB are $7.99 for 5 days. How are they $11? And I live in NYC, so everything is more expensive here...

[dayne517 @ May 9th 2008 9:57AM]

Ok... so you want Blockbuster to just hand over a $60 game and just assume you're going to bring it back? And when you DON'T bring it back... you want THEM to bite the $60?

If you bring the game back, then you don't even need to be concerned about them having a credit card on file...

[slarity @ Apr 29th 2008 10:22AM]

Blockbuster where I live has already started this. Right by the new releases for 360/ps3/wii there are boxes showing controller and cables to purchase.

[rodsky @ Apr 29th 2008 10:42AM]

New CEO brought in 1st profits in FIVE YEARS, BB is not dead,
Total Access seems to have been a success, it drew me in, way better deal than Netflix, sure they don't have as big a collection, but I'd rather be able to go to a store and exchange/get a movie right away if 1) I dont like it, 2) its scratched 3) lady friend coming over unexpected and need some background noise for later and if they integrate games into Total Access then it would make it even better

[Blaktornado @ Apr 29th 2008 10:52AM]

They've been doing this for years in the UK.

I remember seeing posters in my local Blockbusters for the Gamecube's release.

[Connor Tyrrell @ Apr 29th 2008 10:52AM]

I was actually pleasantly surprised while renting a movie there the other night... They were opening a box from nintendo and had 3 Wii's for sale...

[Marty @ Apr 29th 2008 10:52AM]

Blockbuster sucks. They are the leading brick and mortar rental chain simply because of CORPORATE BACKING (Viacom) and dirty business tactics.

Until Netflix came along, they were constantly raising prices even though overhead was going DOWN w/ the advent of DVD.

Here's something the common person doesn't know:

Prior to DVDs, movie studios did not release VHS tapes for sale and for rent on the same day (with very very few exceptions).
A VHS movie would be sold for "Rental Only" first. Depending on the distributor and bulk, a video store would pay anywhere between $60 - 100 for ONE videotape. You did not read that wrong. So when Independence Day came out on VHS and Blockbuster had a WALL of them, you were looking at roughly $5,000 or more worth of tapes. The idea was that they'd make their money back via rental. It also discouraged any rental stores from outright selling the tapes.
Then, a few months later, the movie would be available for sale to the general masses for the more reasonable price of $15 - $25.

Well, DVD crushed that entire system. The movie studios wanted DVD to take off, so rather than using the "Rental 1st, Sale Later" template, the studios released a DVD movie for sale and rental on the same date, for the same price. No longer was Blockbuster being charged $60 - $100 to rent that movie... they were now paying $25 - $30 (actually less if you consider the distributor's discount), the same as if you went down to Best Buy and bought it. So Blockbuster was SAVING money w/ DVD, yet... amazingly... the price to rent a DVD cost MORE than the price of a VHS tape! What?

I haven't stepped a foot into Blockbuster in nearly 4 years. No exaggeration. I know that the mail-in format is not going to be popular with everyone, some people like going into brick and mortar and picking out something they want right there, right now. But I am encouraging you all to look for the mom & pop places or other alternatives. The Wal-Mart Supermarket near me has a DVD-rental vending machine that has ALWAYS has a line of people waiting in front of it... the rentals are $1!!

I can't say enough good things about Netflix and Gamefly. I have been a member of Gamefly since 2005 after I was frustrated w/ Blockbuster's favoritism over one system and couldn't even find NEW Xbox games at their stores. Now look at them, trying to become some sort of Gamespot. Too little, too late.

Down with Blockbuster. Let it burn. They have not done an original campaign or business move in over 10 years. Everything they do is stolen from their competitors. You ONLY get a 'good deal' with them when their chips are down... when they are on top, they'll rape you til you puke.

[Magallanes @ Apr 29th 2008 12:29PM]

I too left blockbuster several years ago because :

a)If you register to some blockbuster store then you must re-register if you want to rent to another store.
b)To rent a dvd in blockbuster can cost x2 or even x3 times more that a non-franchise rent store.
c)No matter the movie, even "classic" movies (old) are usually catalogued as "expensive".
d)It's not the place to buy a hard-to-find movies.
e)Nothing to say, it's almost impossible to obtain any other movie rather hollywood crap, not even popular japan-animation (with some exception) can be obtained.
f)Now with internet you can obtain the same, quick, cheap and with a better quality.

[whowhatme @ Apr 29th 2008 12:31PM]

i got gamefly for 2 months, when i first got my PS3. the idea (for me) was to try out the games i wasn't sure i was going to get, and then go out and buy them if i liked it.

2 months later, i quit, because gamefly takes _at least_ a week of back and forth time for games (mailing it in, updating it in your account, then mailing out a new game). Also, they lost _two_ games in a row in the mail, and i had to wait for another week to get the reporting and everything fixed.

If you plan to get gamefly, don't expect to have a very good experience trying to rapidly rotate out your games... but if you like the idea of keeping a couple of games at home for $22 a month or so, then it might be worth it.

[Zerohour @ Apr 29th 2008 2:41PM]

Maybe you meant to say, the common person UNDER 20 doesn't know. Anyone who has been renting movies since it was an option knows that you could rent weeks or months before you could buy.

And as long as you're talking about "common" people, don't blame the corporations, they appeal to the masses. They would be out of business by now if the majority chose to ignore them.

[Jon @ Apr 29th 2008 11:04AM]

I was just over there , the do indeed sell all systems and feature games on the main walls .. its a nice change i think .. plus they had Plenty of copies of GTA4 for sale and rent

[mattclarkie @ Apr 29th 2008 11:07AM]

We've had this in the UK for years.
I even got my first DVD player from Blockbuster.

[ZeroCorpse @ Apr 29th 2008 3:48PM]

It was the same in the States. THIS is different from the casual hardware sales they've done in the past. They're getting Blockbuster exclusive hardware bundles now, with rentals "built into" the price of the package, and other things.

Really, they're just trying to save themselves from drowining. Netflix and the big box retail stores are kicking Blockbuster's ass. I give them another 5 years and they'll be either out of business or sold off to Best Buy.

[Tom Gabriele @ Apr 29th 2008 11:16AM]

blockbuster, i have an idea. start taking shipment of wii's right now, then stockpile them for a month or two then advertise that EVERY BLOCKBUSTER HAS 60 WII'S and everyone will come running

[ZeroCorpse @ Apr 29th 2008 3:51PM]

Doesn't help Blockbuster at all. The margin on video game consoles (even the Wii) is miniscule. Stores don't make much profit on console or game sales-- They make all their money on accessory sales. If Blockbuster sold 60 Wiis per store, they'd probably make a total profit of about $400 per store, or LESS. (I'm not sure what the margin is on the Wii, but if it's similar to the margin on every other console I've ever sold, it's pretty fricking low-- Some were as low as $2 per console sold.)

[sqrlking @ Apr 29th 2008 12:23PM]

I just picked up a wii for a family member at my local blockbuster last weekend, but the blockbuster we have has been selling hardware since before the wii was released in '06. Maybe our store was a test store?

Anyway, we use blockbuster.com for our movie rentals. Can't beat the trade in system + game availability. At least not yet... But I have to complain a little, because Blockbuster's turn around time has gone to shit. from 2 days to 5+ sometimes.

So, if netflix offered 5 at a time + 1 free game a month or something, for the same price I'm paying now, I'd switch.

[Christian @ Apr 29th 2008 1:18PM]

so is blockbuster gonna switch slowly to an electronic store/video rental?

[someguy @ Apr 29th 2008 1:35PM]

My local Blockbuster has a lineup of about 12 various classic posters for sale. Pulp Fiction, James Dean and Led Zepplin were among them. Kind of odd that they were for sale there.

[Darrol @ Apr 29th 2008 2:51PM]

Blockbuster better change their game then if they want to sell games. Around here they have Game Rush and while it presents a bit of a better deal on trade-ins, they don't advertise it anymore and they never man the desk. It just blends in with the rest of the gaming section as it is used mostly to store more games for rentals.

[Juaquin @ Apr 29th 2008 3:51PM]

Would the just die peacefully and with some dignity?

[Juaquin @ Apr 29th 2008 3:51PM]

*they

Thanks for not adding an edit function, Engadget. We all love taking up more space just to correct typos.

[Trent @ Apr 29th 2008 5:07PM]

Although I doubt blockbuster will go out of business they are going to be a much lower profit enterprise and they will have to reduce in size. The fact is they screwed way to many people with their "late" fees that in the 90's accounted for 60% of their profit. About 50% of the people I know would never rent from them again just because of how badly they got screwed over by them in the past.

[TIMMAH! @ Apr 29th 2008 6:44PM]

See the flopping flounder..

[mrChin @ Apr 29th 2008 10:11PM]

Funny enough, our local Blockbuster in The Cayman Islands has been doing this for about 2 years going on 3 now! How's THAT for good ol' Caymanian ingenuity? :)

[xchekox @ Apr 30th 2008 4:40PM]

As far as I know.. Mexican Blockbuster's have always sold consoles..

[dayne517 @ May 9th 2008 9:57AM]

@ Magallanes:

Your Blockbuster account is active at every store internationally as long as you have your Blockbuster card. Even if you don't have your card and you go to a different store, they can import you into their store database by driver's license and/or social security number.