GameStop Launches Blockbuster-Era Game Rental Service
There are plenty of things to miss about the 1990s, like pegged jeans, Hypercolor t-shirts, and increases in real wage levels for every income quintile. Okay, maybe just that last one. One other thing we didn’t expect to see was a company reviving a Blockbuster-era rental service, but that’s what GameStop is planning to do.
Here’s the deal, as first reported by Polygon and confirmed by GameStop: You pay GameStop $60, enroll in its PowerUp Rewards program, and check out as many used games as you like, one game at a time. The program expires after six months and must be renewed, but you get to keep one game you played over the six months as a permanent title. Presumably you can designate this game at any point in the cycle–if you rent The Last of Us as your first game and decide to keep it, you presumably also can’t change that decision, though we’re still missing details on these aspects of the service.
The Blockbuster trappings are found in the specific physicality of the deal. You can’t rent a game from GameStop’s online service; you have to go into the store to pick it up. On the one hand, this makes perfect sense–GameStop’s business model is still almost entirely store-based, even as console buyers follow PC buyers and move towards a more digital model. GameStop is one of just a handful of companies that could launch this kind of service, and probably the only one with a specific focus on video games. The company obviously hopes that when you come in to pick up a new used game, it’ll be able to persuade you to pony up for a controller, new pre-order, or console upgrade. And to be clear, that’s not always a bad thing–GameStop offers its own share of deals and upgrades that can be worth taking advantage of, provided you (as always) read the fine print.
But there’s another fine-print motivation for this offer that has to do with GameStop’s long-term trends. While buoyed by the release of the Switch this year, GameStop’s used-game division has been sliding, with sales down by 7.5 percent in Q2 2017 (Q3 2017 figures are not yet available). New software sales have also slid, at 3.4 percent, and while GameStop’s digital revenue grew by 17.4 percent in Q2, it’s starting from a much smaller dollar figure. The decline in used game sales are also significant for GS, because those sales are basically pure profit for the company.
GameStop’s motivations for pushing customers towards programs like this are twofold. First, it’s not going to be giving away a large enough number of companies to materially impact its used game sales, while convincing some number of customers to pay up to $120 per year for the privilege of playing them. Second, it encourages floor traffic and increases the opportunity that these dedicated gamers will order other things. And it’ll even boost revenue on some number of subscribers who won’t play very many games despite opting for the $120-per-year service. But if you do play lots of games, particularly if your Internet access isn’t very good, this program could end up being a win-win.
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