Author Topic: How does renting games work in favor of game companies? (Read 4211 times)

xts3 · « **on:** July 05, 2004, 02:06:05 AM »

With rental stores renting games at at ~1/8 to 1/10 the price of a full retail game how do game companies expect to make money when you can rent a game for a weekend or even a week on the older games for chump change and finish it? I'm not sure how game companies get revenue from rental chains like blockbuster, so would someone care to enlighten me on the subject, do rental chains have to share their profits/revenues with the companies whos games they rent?

I've always wondered about the assbackward reasoning of allowing your customers to rent brand new games (especially single player) who then can then finish them on 4-7$ and having nothing to do with them agian (since most likely after they are finished they'd just sit on your shelf if you had bought them). It seems to me that allowing people to rent and access the entire game and all its content is a bit strange if I do say so myself. Why buy what you can rent, enjoy and finish for 500%+ discount? I just don't see how lesser known game companies can survive when you can rent their games for so little and consume them without having to fork out $40-50(US) and 49-70(CDN) for a game. It makes no financial sense to buy RPG's brand new or even buy them at all on the 2nd hand market unless you really like the game. I wondered how Lost kingdoms II even got to the green light to be produced when the first game was nothing special considering I rented and finished both how did the developer and publisher make anything for their efforts? Will their be a LK3? I dont think so but I dont have the sales #'s you never know though with the dearth of RPG's on the GC.

DrZoidberg · « **Reply #1 on:** July 05, 2004, 03:32:12 AM »

Video store purchases game, video store rents game, video game store recovers money expended on said title, video game store continues to rent the game and making further money. Video game company profits from the sale of the game to the store.

mouse_clicker · « **Reply #2 on:** July 05, 2004, 04:12:40 AM »

Quote
Video store purchases game, video store rents game, video game store recovers money expended on said title, video game store continues to rent the game and making further money. Video game company profits from the sale of the game to the store.

Videogame hopefully gets on-the-fence gamer to buy the game. Renting is really just another way of getting people to try your game, which isn't bad.

anubis6789 · « **Reply #3 on:** July 05, 2004, 06:43:59 AM »

From what I understand on how the rental industry works a rental chain will pay extra for videos and games as kind of a liscensing fee. Some times a single video can cost as much as $200 to a rental chain.

Of course I could be very wrong.

Ian Sane · « **Reply #4 on:** July 05, 2004, 07:29:50 AM »

Not everyone can beat an RPG within a week's rental you know. Not every game is short enough to be completed in that time. You have to have a lot of free time and some pretty good skill to do that. There are VERY few titles I've beaten in a week and I imagine I put in more game time then the average consumer.

I figure game companies can afford for there to be rentals for the simple fact that few try before they buy. I'm an educated game buyer who does research before buying any games yet I barely ever rent games. Usually the only titles stores like Blockbuster rent out are major releases like Metroid Prime that I want to buy anyway and see no need to rent. The only titles I want to rent are obscure games I'm on the fence about and rental stores rarely have those titles available. The idiots who buy Fairly Odd Parent games OBVIOUSLY don't rent games very often or at least not for research purposes.

It seems to be working out okay and I certainly don't want you giving publishers the idea that they can blame any poor sales on rentals. DVD sales are huge and realistically you can rent any DVD title you want and easily see the whole movie and any extras within a rental.

Uglydot · « **Reply #5 on:** July 05, 2004, 07:55:26 AM »

Renting is a commercial that rental outlets pay for, then we pay them back then some.

I never rent becuase I jump between games for a looooong time, taking a very long time to beat them if ever.

couchmonkey · « **Reply #6 on:** July 05, 2004, 09:28:33 AM »

I used to rent games a lot, but I almost never finished a game during a rental. Of course, I usually rented a couple at a time...I purposely didn't want to finish them, becaue I felt it cheapened the experience to rush through a game in several straight hours of play. I guess I don't "play to win".

Gibdo Master · « **Reply #7 on:** July 05, 2004, 06:05:45 PM »

Quote
Originally posted by: anubis6789
From what I understand on how the rental industry works a rental chain will pay extra for videos and games as kind of a liscensing fee. Some times a single video can cost as much as $200 to a rental chain.

Of course I could be very wrong.

I've heard this too. Makes sense to me.

ruby_onix · « **Reply #8 on:** July 05, 2004, 09:50:43 PM »

The videogame publisher gets one extra unit sold, and the rental store taps into a lucrative slice of that game's potential market.

You can say that it creates "more informed" gamers, or that the people who rent (and don't buy the games later) aren't likely to buy games in the first place. I know I myself grew up renting games, and now I buy more of them than I can play and/or afford. But those exact same arguments apply to piracy.

IIRC, back in the NES era, when videogame rentals became all the rage, Nintendo spearheaded an attempt to make renting games illegal, to protect their third parties. They joined up with Microsoft, and a couple other related groups, who were concerned about rentals of computer software.

They got some lobbyists, and went to Washington, to go buy some congressmen. But Blockbuster and the other rental chains were already in Washington, and had longer-standing, higher-paying relationships.

The publishers couldn't win, and then Blockbuster made Microsoft an offer. So Microsoft cut Nintendo loose to twist in the wind, Blockbuster stepped out of the way for Microsoft, and a law was passed saying it's illegal to rent out computer software, but console games were fair game.

AFAIK, it is the position of Nintendo, Sony (actually, I honestly suspect it's just lyp service from them, and they even quietly support piracy, as it's in their interests), and ironically, Microsoft too now, that game rentals are harmful, but Blockbuster is just too big and important in the industry to even dare risk pissing off.

Gremio · « **Reply #9 on:** July 06, 2004, 01:56:09 AM »

Quote
Originally posted by: xts3
With rental stores renting games at at ~1/8 to 1/10 the price of a full retail game how do game companies expect to make money when you can rent a game for a weekend or even a week on the older games for chump change and finish it? I'm not sure how game companies get revenue from rental chains like blockbuster, so would someone care to enlighten me on the subject, do rental chains have to share their profits/revenues with the companies whos games they rent?

I've always wondered about the assbackward reasoning of allowing your customers to rent brand new games (especially single player) who then can then finish them on 4-7$ and having nothing to do with them agian (since most likely after they are finished they'd just sit on your shelf if you had bought them). It seems to me that allowing people to rent and access the entire game and all its content is a bit strange if I do say so myself. Why buy what you can rent, enjoy and finish for 500%+ discount?

The main reason why I rent games is because I'm unsure of whether or not I should purchase it. I rented Goblin Commander, liked it, bought it. I rented Prince of Persia, liked it, bought it. I rented Gladius, liked it, bought it. (And so forth). All games I would have otherwise not bought had they not been available for rent.

I've always thought the reason for there being rented games is so that people can "test try" the game and decide whether or not they like it enough to buy it. A lot of people rent moves or go to the theaters and still buy the movie when it comes to DVD or VHS because they liked it. Obviously not everyone rents for the same reasons I do but I'm sure there are many who do.

Deguello · « **Reply #10 on:** July 06, 2004, 05:35:50 AM »

Retning games is probably a big problem for Microsoft right now. The fact that you can mod them and install giant Hard drives that you can copy games directly to and play from. The only way MS can punish these pirates is to block their Live! accounts. A pitiful attempt if the pirates were those excluded from MS Live! because of a pointless broadband-only policy, or those that have absolutely no intention of going online in the first place.

Myxtika1 Azn · « **Reply #11 on:** July 06, 2004, 11:47:43 AM »

I was once told by the owner of a rental store that they had to pay a few hundred dollars for just one copy of a game/video/whatever they want to rent out. Does anyone know if there is any truth in this? If so, that would mean that the companies are paying a price of up to maybe 5 games just for one copy. Multiply that with 10 or so copies of one game, then that's a lot of money.

ruby_onix · « **Reply #12 on:** July 06, 2004, 12:34:28 PM »

Quote
I was once told by the owner of a rental store that they had to pay a few hundred dollars for just one copy of a game/video/whatever they want to rent out. Does anyone know if there is any truth in this?

Sort of.

Big video stores pay around $200 for just one movie, at first. But (AFAIK), that doesn't get them a "specially licenced" version or anything like that. They pay to "get it early" (or they pay to "not be left behind" when everyone else pays to get it early). Because there's a lot of people who only get excited about watching movies when it's "opening day".

Once a movie drops to "sell through" price, the video-selling stores start stocking their shelves for the rest of us, and the smaller rental stores just buy a copy or two off the stands (bigger places buy directly from the distrubutors who sell to the video-selling stores). AFAIK, there are laws against "public screenings" and such, but there aren't any laws saying you can't rent out movies and games you legitamately bought (as long as you have a licence to operate a business in your city).

Videogames don't normally offer the more expensive "early release" versions, because the culture of buying video games is much larger than the culture of buying movies, and if they gave rental stores an edge, the more-lucrative game-selling-market would take a pounding (probably more than the jacked-up early release price would offset).

AFAIK, the videogame industry has experimented some with "early releases" for rental stores. I think StarFox 64 was available in rental stores a few weeks before it's release, for instance.

RareWare · « **Reply #13 on:** July 09, 2004, 10:49:06 PM »

Ruby's right. I work at a rental store and that's how it works. If you think about it though the games are bought for around $50 when they first are released. We charge about $7 to rent them for 5 to 7 nights (depending on how new the title is). After about 8 rentals of one copy the game has paid for itself and its total profit from there on. Then, if the game doesn't rent well after a while we slap a sticker on it and sell it for pure profit. That's a very profitable (especially on recent games like Spiderman 2, we can't keep that one in!) way to do business. At least I think it is.
We do have exclusives in the rental business (at least Blockbuster Video does). The game Freestyle Street Soccer, while not the best game, was a Blockbuster exclusive. We sometimes have movies that are that way as well... (Shade comes to mind)
Usually we will get games in early and we are told that, unlike movies, we are to put out games as soon as we recieve them. That's probably why Starfox 64 went to rent 3 weeks early (although I am not sure).

..Now, if I could only sleep...

KDR_11k · « **Reply #14 on:** July 10, 2004, 07:53:57 AM »

Hm, I hope there are no exclusive movies/games in Germany because then I'd have no way of knowing who actually has them... But then I rarely rent.

(RareWare: To answer your sig, Technology follows the law of Inverse Darwinism, the most inferior piece of technology succeeds)

RareWare · « **Reply #15 on:** July 11, 2004, 08:45:18 PM »

Heh, thanks for the explanation. Its probably just a US thing. You actually have Blockbuster Video there? I knew we were supposed to be international, but I thought that was a joke.

KDR_11k · « **Reply #16 on:** July 11, 2004, 11:23:12 PM »

I dunno, that's a pretty generic name and it wouldn't surprise me if we had video rental places of that name without any relation to the US business.

ThePerm · « **Reply #17 on:** July 13, 2004, 09:25:11 AM »

actually to tell you the truth nintendo originally hated rental places, especially noted in game voer. I assume they realised they could have some advertising benefits....plus no one really rents Nintendo's own games. People buy those, rent third party games. If the third party games are good then they buy them. However, nowadays every rental company treats Nintendo like crap prtasing xbox and playstation 2 because the consoles look like high tech gadgets because of their casing design.

Syl · « **Reply #18 on:** July 13, 2004, 10:55:03 AM »

Also, the "rent before you buy" holds true, Its not rare to rent a game then to go out and buy it if you think its worth owning.

Syl · « **Reply #19 on:** July 13, 2004, 10:56:22 AM »

doh, double post... is there a delete button on this forum type?

News:

Author Topic: How does renting games work in favor of game companies? (Read 4211 times)