Redbox Passing On Portable System Game Rentals For Now

The company is taking part in E3 this year for the first time as it prepares to expand videogame rentals nationally to more than 21,000 of its U.S. rental kiosks June 17. Launch titles include Activision’s Transformers: Dark of the Moon and Call of Duty: Black Ops, Sony’s Infamous 2, Take-Two Interactive’s Duke Nukem Forever and L.A. Noire, Redbox said. It said in late April that after “extensive” testing of videogame rentals, it will expand those $2 daily rentals from 5,000 test locations (CED May 2 p4). The test started in Reno, Nev., and Wilmington, N.C., in August 2009 before expanding to Orlando, Fla., and Austin, Texas, in May 2010, and then five more regions in October.

Consumers renting games during the test period have run the gamut from non-gamers to core gamers, although core gamers tend to be in the minority, Redbox found, based on data that Resnik said was collected by the company and third parties by polling customers. “The average customer has a family,” he said. Core gamers like the “immediacy” of being able to rent a game and like being able to make online reservations to guarantee a title would be in stock, while avid, casual and “lapsed” gamers, as well as non-gamers, “want to try product before they buy it,” he said. “Sixty percent have tried a new genre” other than what they typically buy, he said. For only $2, parents will often agree to rent a game for their kid who asks for one, he said, telling us Redbox has “done great with” Lego games.

Last year, the top-renting game for Redbox was Ubisoft’s Just Dance 2, while Activision’s Call of Duty: Black Ops has been a recent strong rental, Resnik said. The Wii version of the latter game “over-performed” vs. “our expectations,” he said. Redbox has also had “good success with lesser-known” games that customers try out instead of purchasing, he said. Games based on movies also “do well for us,” he said, pointing to THQ’s Rio as one example.

Resnik said he was “excited by some of the product” that he saw at E3, but “a lot information hasn’t been shared” by Nintendo about the Wii U console yet, including the pricing. It was “hard to speculate” how initial sales will be for the new Nintendo console -- “people will adopt it,” but it’s “just a matter of when” that will happen that’s not yet clear, he said.

While games for all three current-generation consoles have been popular rentals for Redbox, Resnik said “there’s seasonality impact” on when games for each one tend to fare best. The Wii is especially strong during the holiday season, for example, he said.

Redbox gets its games from publishers and also via distribution, Resnik told us. While it gets games direct from publishers including Bethesda Softworks, Sony Computer Entertainment and THQ, Redbox hasn’t forged direct relationships with others, he said. “It’s early,” he said of the fact that Redbox hasn’t gone nationwide. Asked whether the company paid more for games via distribution, he said it had “a variety of different business models” and was “able to make them all work."

E3 Notebook

Attendance grew slightly to 46,800 at this week’s E3, from about 45,600 last year, the Entertainment Software Association said Thursday, the final day of the show. This E3 featured more than 120 retail companies from 18 countries that participated in E3’s “VIP Retailer” program, ESA said. The event also grew more international in scope, drawing attendees from 106 countries, up from 90 last year, it said. Next year’s E3 will be June 5-7, again at the Los Angeles Convention Center, it said.

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Gamers “are definitely worried” about the impending U.S. Supreme Court decision in the California violent videogame law dispute, Entertainment Consumers Association President Hal Halpin said. “And there’s only four weeks left” before the court finishes announcing decisions in the cases it has heard since October, he said. Halpin said he thinks the decision could go either way, based on the judges’ comments and questions during oral argument last fall (CED Nov 3 p1). There’s “nothing” his game consumer advocacy group can do if the decision goes against the game industry, he conceded, predicting that if that happens, the industry “could see 100 bills a year” introduced regulating videogame sales and rentals. But if EMA and ESA win, he thinks there “would be very few efforts” by elected officials to make it illegal to rent or sell M-rated games to minors anymore, he said.

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Electronic Arts’ Chillingo mobile games division remains focused on titles for Apple’s iOS devices, but is gradually expanding to other platforms, Kaiser Hwang, global head of marketing, told us. It recently made a version of Angry Birds available on the PlayStation Network that hit No. 1 on the App Store, and a version of Cut the Rope is coming soon for DSiWare, he said. Those are its first offerings on those platforms, and “we have a few” titles “coming up that we think will work really well on those platforms,” he said. It hasn’t released any games for Android devices yet, but he said, “We look at everything.” Chillingo also hasn’t offered any titles yet for the 3DS, although “we love what Nintendo has done” with the device, he said. There’s demand for multiple platforms, and “we don’t want to cut anyone out,” he said. Decisions are made on “a case by case basis” what platform to release a game on, he said. Chillingo said at E3 that it passed 140 million game downloads across the iPhone, iPod Touch and iPad since the App Store launched in June 2008.

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Rude Gameware touted a Sonar portable mini speaker using a vacuum bass system from Cyber Snipa, a company it merged with, that CEO Michael Epstein said he hopes will ship late this month at $29.95. There have been significant customs delays for about six months for products coming into the U.S., he said. The manufacturer is looking to expand its distribution in the U.S., he said. Retailers now carrying its products include Amazon, CompUSA, Micro Center, Newegg and TigerDirect. Fry’s recently started carrying select items, he said. The manufacturer is trying to land large U.S. retailers, and will be “going online with GameStop soon,” he said, calling it “a gradual process.” It also sells its products in “about a dozen countries” outside the U.S., he said. To compete against larger peripherals makers such as Logitech and Mad Catz Interactive, “we try to differentiate ourselves on features and price point,” he said. Razer mice, for example, cost “almost twice the price” as similar Rude product despite having most of the same features, he said. Rude tries to add more features and “still undercut” rivals on price, he said.

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Gameforge is still in development on the massively multiplayer online PC game Star Trek -- Infinite Space, which will be released this fall, Product Director Holger Zimmermann said. The free-to-play, browser-based game will require no download and is in the “pre-alpha” development stage now, he said. There will be a closed beta test at a yet to be determined time ahead of launch, he said. No subscription is required and the company will be “making our money based on micro transactions” by players, he said. The game will work on any browser that supports the Unity plug-in, including Chrome, Firefox and Safari, he said.