For all the downbeat headlines, store closures and plummeting consumer spending, not every area of games retail is suffering.
Yes, sales of new and used games have dropped significantly year-over-year. And yes, many firms operating in digital are on the rise.
But there is one area of the boxed games sector that’s actually doing quite well – the often-forgotten, long-dormant rental market.And as a result, rental giants such as Blockbuster and LoveFilm are reaching out to cash-strapped customers with a string of attractive deals and even TV advertising.
Last week GAME Group CEO Ian Shepherd told MCV that consumers are being more selective than ever. And it is this trend that Blockbuster’s commercial director Gerry Butler believes is proving a boost to rental.
“The UK marketplace is divided into three main areas. There is a substantial retail business, you have a huge trade-in business – which everyone plays in including us. And then you have a dormant rental market,” he says. “We are a rental company and so we’ve decided to ramp up this side of our business.
“There are a lot of people out there worried about the economy – and just look at Q4, there must be at least 35 major games out. You can’t buy them all. But you’d like to play them all. So we’ve put together a cost-effective way for consumers to play.”
Blockbuster is busy promoting its ‘five nights for £5’ deal, including booking ads during the X Factor. It has also done away with late fees – if customers want to keep the game for an extra night, all they need to do is pay an extra £1.
Furthermore, for players who decide they want to buy the game they just rented, Blockbuster will refund the £5 rental fee.
“We did some consumer research a few years back,” adds Butler. “And what the research said was that the heavy renting gamer buys more software than normal consumers. A lot of publishers in the early days didn’t believe that. But we have all the data to prove it. As our rental numbers increase, our retail sales are raising on the back of it.”
RENTAL VS PRE-OWNED
Publishers have found a new friend in the rental market – not least because, according to Butler, it deters trade-ins.
“Trade-in has its place, there’s no question about that,” he continues. “But what happens is that a lot of the retailers in the trade-in market don’t top up their orders. So the publisher doesn’t get any money. The advantage of renting is that they get quite a lot of money.”
This is partly why Blockbuster has managed to get publishers on board to help push its rental business on TV. Its new ad features Call of Duty, Battlefield and Assassin’s Creed.
“Gaming is very important to Blockbuster,” continues Butler. “We have a large percentage of the heavy core gamers in our stores. And we think rental is a great way to play games in austere times.”
But it’s more than just about marketing and new deals. The entertainment specialist has made a huge effort to improve the all-round rental experience.
“When you walk into Blockbuster, you definitely get the game you want. That is very important,” adds Butler. “During the summer, we did a lot of consumer research. And we got a lot of feedback from gamers.
“We had a lot of consumers say we didn’t give them the game for long enough, we didn’t have enough copies. So we listened to that and acted upon it. We trebled the copy depth, we extended the viewing period, we put in flexible periods of hire, we got rid of late fees.
“What we are saying to the consumer is that we can sell you the game at a competitive price. We can give you a great trade-in offer if that’s what you want. But perhaps just as important as any of those, is that we can rent at a competitive price. And £5 is a great price point.”