An increasing number of people are streaming and downloading video games, but this doesn't mean the end for physical goods, nor does it spell trouble for game rentals — that's according to Redbox's director of video games, Ryan Calnan.
Redbox currently has automated rental kiosks for DVDs, Blu-ray discs and video games at more than 35,000 locations across North America and offers game rentals for the PlayStation 3, Xbox 360 and Nintendo Wii. Select markets also offer games from the PlayStation 4, Xbox One and Wii U. During the company's first quarter for this year it topped 200 million rentals, of which video games accounted for two percent. While this number may seem small, Calnan told Polygon it's actually a big deal for the games industry.
"We have a 20-50 percent conversion rate of people buying a game after they've tried it through Redbox," Calnan said. "The percentage varies depending on the time of year, but it's a very healthy conversion of rent-to-purchase rate."
According to Calnan, this gives the games industry an opportunity to engage with an audience that might not otherwise discover their games through avenues like the games media, video game stores or the virtual storefronts of Xbox Live and the PlayStation Network. "It gives them the ability to reach beyond the hardcore gamer," he said. "And it offers publishers an incremental revenue opportunity."
Earlier this year Redbox partnered with publishers Deep Silver and Square Enix to promote Saints Row 4 and the 2014 release of Thief via Redbox, and both trials led to an increase in incremental purchases from customers who wouldn't normally identify as gamers.
"There is still a very big emotional attachment to the physical media," Calnan said. "And a lot of people have slow internet connections and can experience extremely long download times. So I think Redbox has a very strong place in the gaming industry."
Correction: The original article stated that the rent-to-buy conversion rate was the result of customers keeping the discs they rented from Redbox. Redbox representatives notified us that the conversion actually translates into Redbox customers buying the games at retail after trying them out via the rental service.