Blockbuster adds video games to by-mail movie rental program

Blockbuster is now offering video game rentals for its movie-by-mail subscribers at no extra charge, as my colleague Maria Halkias reports in today’s paper.

From the article:

Blockbuster’s subscription programs range from a monthly fee of .99 for one DVD at a time to .99 a month for three DVDs at a time, including free in-store exchanges.

Blockbuster has tested by-mail game rentals in Cleveland and Seattle since last year, Lewis said.

The company will offer 3,163 game titles on Blockbuster.com, which it says represents 90 percent of game titles released since 2000 for Xbox , Xbox 360, PlayStation 2, PlayStation 3 and Wii.

It’s a nice addition, and certainly a bargain for gaming households whose entertainment budgets are squeezed.

It’s hard to see how Blockbuster is going to make money off this program, though, since Blockbuster will have to pay more to buy the games — generally much more expensive than DVD or Blu-ray movies — but won’t charge additional fees to rent them out.

And I don’t see Netflix getting into this space at all.

When I visited Netflix’s Irving distribution center last year, Steve Swasey, vice president of corporate communications at Netflix, said that games and movies have much different business models.

“A movie released in 1974 can still be great,” Swasey told me. “But does anyone want to play Madden ’95? Not really.”

Nor does GameStop seem to have any interest in getting into the game rental business. Instead, the Grapevine-based retailer is focusing on expanding its digital download division, recently acquiring casual gaming service Kongregate.

So Blockbuster seems to be barking up a tree that almost everyone else is ignoring (except for games-by-mail service GameFly).

We’ll see how that works out.