Redbox Rental Kiosks Driving Game Sales

By John Gaudiosi   Google+

Posted July 1, 2014



Since launching its video game rental service through its 42,000 kiosks around the country, Redbox has become a new avenue for video game publishers to market games to the mainstream gaming audience. Redbox calls these gamers “recreational” consumers and recently did a survey that revealed new information about this audience.

“We’re engaging consumers beyond the hardcore gaming audience,” said Ryan Calnan, director of video games at Redbox. “There’s a large group of recreational gamers that are bringing incremental sales to gaming.”

Ryan Calnan

Calnan revealed how recreational gamers differ from hardcore gamers in four major areas. Recreational gamers play approximately six hours per week, compared to the 15 hours per week hardcore gamers play. The average age of a recreational gamer is 34, compared to 31 for hardcore gamers. Over half (58%) of recreational gamers have kids, while only 41% of hardcore gamers are parents. The average income of recreational gamers is $61,000, compared to $52,000 for hardcore gamers.

“Through internal studies of our customers through surveys, 50% said they wouldn’t buy a game unless they could try it first,” said Calnan. “We have a 20% to 50% conversion rate of purchasing the games they rent first.”

The survey also found that consumers look to Redbox.com as a top source for news and information on games. The site gets 2 billion impressions per month. In addition, Redbox reaches 33 million people via email, 4.5 million customers through texts and has had its app downloaded over 12 million times.

Publishers like Deep Silver and Square Enix have worked with Redbox to reach beyond the hardcore gaming audience for games like Saints Row 4 and Thief. The game companies were able to get kiosk stickers of their games on 42,000 kiosks around the country. In addition, marketing packages were built around each game, including running trailers on Redbox.com and targeting gamers via email with an embedded trailer, as well as through the app, which alerts users about the titles and sent out links to reviews of the games.

“Both publishers were happy with the programs and our ability to turn game rentals into game sales,” said Calnan. “The ability to get these games in front of all the places customers walk in and out of on regular basis is something publishers see as one of the most valuable real estate opportunities out there.”

Campaigns can vary in length and scope. The Saints Row 4 program ran 12 weeks, although Calnan said with crowded launch windows in the fall programs can be much shorter. The company is also open to experimenting with different cross-promotions. Redbox worked with Sony Computer Entertainment on the launch of MLB 14: The Show. Gamers who rented MLB 14 were sent a code to try PlayStation Network for free.

Calnan said Redbox gives game publishers an opportunity to target mainstream audiences with Hollywood licensed products like Activision’s Transformers: Rise of the Dark Spot and The Amazing Spider-Man 2, as well as Little Orbit’s How To Train Your Dragon 2. 

“Movie IP games like Spider-Man 2 did really well for us because our movie consumer likes to try out the game and get involved in the world,” said Calnan. “How to Train Your Dragon 2 is doing well now. Our recreational gamers gravitate to games they can pick up and play easily. They also love party and family games like Just Dance.”

There’s plenty of overlap between the top game sales of the year and the popular rental games, especially with franchises like Call of Duty. Calnan said that perennial success remains popular year after year. Typically, Redbox will have two to three copies of a big game like Call of Duty in each of its kiosks around the country.

“The hardcore gaming audience tends to buy games, they’re not trying to rent games,” said Calnan. “That’s what the industry is good at. We’re trying to get more people interested in games.”

Gamers can order games, as well as movies, online or through the app and pick it up at any kiosk. The $2 game rental also allows gamers to return the title to a different kiosk. Calnan said Redbox currently has Xbox 360, PlayStation 3 and Wii games in all of its kiosks. The company has started rolling out PlayStation 4 and Xbox One games in 12 markets (see list below).

“We’ll expand next gen out as rentals hit benchmarks for us,” said Calnan, who said the plan is to slowly migrate the new console software across the country. “We worked with first party to see where the next gen consoles are selling best and looked at previous data on Xbox 360 and PS3 and top-renting markets based on assumptions of what we had.”

Currently only Salt Lake City and San Antonio are renting Wii U games. Calnan said the Wii U doesn’t have a large enough installed base for rentals to work right nationwide at this time. Redbox continues to rent Wii games, even though there aren’t as many titles for the platform. He noted that Just Dance on Wii did very well last year.

“As long as they keep making games for Wii, PS3 and Xbox 360 there will be an audience for them, especially since next gen isn’t backwards compatible,” said Calnan.

Calnan previously worked in the games industry at Vivendi Universal Games as a national account manager from 2002 through 2008. He helped launch game rentals at Redbox in 2011 as senior marketing manager and was promoted to director of video games earlier this year.

“Having that experience of navigating the transition from PS2 to PS3 helps as we expand into PS4 and Xbox One,” said Calnan. “I’m excited about the new generation of consoles coming through and how fast they’ve sold (at retail).”

With the popularity of digital distribution for games, Calnan said that Redbox’ recreational gamers are attached to the physical disc and will use trials in making their decisions on which games to purchase for their library.

Even the influx of free-to-play games has opened up a new opportunity for rental, as game makers like Mojang and Wargaming have brought games like Minecraft and World of Tanks to consoles. Minecraft came out on 360 last year and PS3 this year and those products have rented really well,” said Calnan. “Free-to-play games can work in tandem side-by-side with the physical disc to reach a much larger rental audience.”

Redbox Cities Featuring Next Gen Game Rentals:
Atlanta
Austin
Chicago
Denver
Orlando
Sacramento
Salt Lake City
San Antonio
San Bernardino
Seattle
Phoenix
Yakima





 


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