The Evolution of the Video Game Market -- Rentals

Continuing our look at how the video game market has changed over the years, we turn to the game rental market.

Renting games was once one of the most popular ways of playing video games but has since declined for both market and game design reasons.

Rentals:

During the 80s as the popularity of home entertainment grew, consumers realized that having to constantly buy products like movies and video games was a costly affair. This left a niche in the entertainment market that the store Blockbuster filled to become one of the biggest retail chains.

This was helped tremendously thanks to the rising popularity of the video game market. Video games like VHS tapes back in the day were very costly with games priced from 60$ and up for a new game with no such thing as game sales. For most of us, it wasn't possible to buy a lot of titles as the cost was just too great on top of buying the console in the first place.

Blockbuster made its money by licensing titles from publishers and studios, the studio would receive a cut of any games rented while Blockbuster kept the rest. This meant that as a store, Blockbuster could make several times more renting one copy of a popular game as opposed to just selling it to one consumer.

Being the popular option for so many years turned Blockbuster into a juggernaut and up until the mid 00s was a major player when it came to accessing video games. For many consumers, the advantages of renting games allowed them to get around the high costs of owning.

Advantages:

The advantage of renting games is very simple -- you can play a game at a fraction of the cost of owning it. Many consumers used this as a way to test a game out before buying it while others simply played the game through the rental and didn't bother buying it afterwards.

Gamefly has taken the torch from Blockbuster and offers a new version of game rentals for the modern market.

For the game stores, renting allows you to make repeated sales on a single copy of a game and if the game is popular enough, you can make more from renting than just selling the copy. As mentioned, renting also allows the consumer to get a taste of a game and may be the push needed to get them to buy a copy.

Blockbuster eventually allowed console rentals on top of games, further providing accessibility to the Game Industry for people who didn't have the money to afford the high prices. Unfortunately for Blockbuster, changes in both game design and selling practices led to its downfall and almost the death of the rental market.

Disadvantages:

Renting games and consoles were popular when many games had short playtimes (with exceptions to RPGs) and meant to be played once. But as the industry evolved into the 00s, we saw video games grew more complicated and having additional value.

Games with strong multiplayer components and DLC are not the best candidates for game rentals due to the added value.

Developers were creating longer games and along with multiplayer gave consumers more reasons to buy instead of rent. Many games featured so much content that you couldn't play it over the strict time limits that a store like Blockbuster had. And when game sales started to appear in the latter half of the 00s, consumers could own games for far less than they could before and removed one of the major attractions of game rentals.

Blockbuster attempted to remain relevant but they weren't able to change to meet with new demands until it was too late to make a difference and they went bankrupt. But while Blockbuster has failed, the rental market has transformed to become more accommodating to consumer demand.

The New Rental Market:

While major stores like blockbuster have disappeared, gamers still have options to rent video games. The online site Gamefly has grown in popularity thanks to the ease of being able to order games and have them delivered to you. Gamefly works as a subscription service where you pay a monthly fee to request games and have them mailed to you. You can play them for as long as you want and then return it to get the next game you're interested in.

DVD kiosks have recently appeared and offer consumers the option to rent games and movies while shopping and follow a similar model to Blockbuster. Instead of going for high costs per rent, renting a game or movie only costs a few dollars for a couple days of renting it. If you want more time, just keep it longer and you'll pay for additional days.

The rise in popularity of mobile and F2P games have also affected the rental market providing titles without any upfront costs and great for casual fans.

Even though developers still miss out on the sale of a game, these options are very attractive to consumers for being able to play a wide variety of titles. Even digital stores have started to run "rental" promotions in the form of free trials.

Steam routinely has a free weekend where you can play a game for as long as you want during the trial period. Afterwards the game is removed from your account and you can of course buy the game to continue your progress.

Because of these options, the rental market's viability will remain possible for as long as developers allow it. Up next, we'll going to talk about trading in games and get to the heart of the matter as to why developers don't like rentals or used copies of games.

( Reprinted from the Xsolla.com Blog)