Renting Video Games Idea

[Jiminite]

Just thought I’d post this to pick follow entrepreneur’s brains. From the beginning of October I started selling video games on my local market on Saturdays and Thursdays. As you've probably guessed, there's a lot of competition, so I’ve been doing some rethinking about it.

My new idea is the rent games out (as well as selling new and second hand games). They’ll be two ways to do it. One is for customers to pay per rent, and the second way is for customers to pay a monthly subscription.

The Pay Per Rent customer will have to pay a deposit of £45 for PS3, Xbox 360 and Wii games, or £35 for PS2, Nintendo DS and PSP games. A deposit is needed for a few reasons: to make sure games are returned, to take away late fees straight away and I can take the cost off any damages there and then. The length of the rental period is two weeks, with a £2 late fee taken from their deposit for every time they fail to return the game on a market day (Thursdays and Saturdays) (e.g. if a game is due back on a Saturday and it’s returned on the following Thursday, £2 will be charged. If they don’t return it on the Thursday, but return it on Saturday, £4 in total will be charged). After they return the game, their deposit is returned minus £5 for the rent and minus any late fees or damages.

The Subscription customer pays about £8 per month and they’ll be sent a rental card. They can select any of the games and take them there and then without paying a deposit and there will be no late fee as well, as members can take them away for as long as they want. Any damaged games will be charged for on debit/credit card.

Blockbuster charge £4.95 for just two nights, which I thought it would be nearly impossible to complete a game without turning into some kind of all-night zombie. Two weeks would give customers a good amount of time to play enough of the game without the rush.

I’ll also be selling “ex-rental” games for a bit cheaper then new games to release some cash in order to buy newer games to rent.

Just wondering what people thought of this idea and if there’s anything I need to think about or get rid of, etc.

Thanks for reading.

[integreatmedia]

Firstly I'd look at your competitors - and there are many! Blockbuster obviously being one of the most popular and high profile ones. Take a look at some on-line competitors as well.

I don't think the deposit scheme will work well as people won't be willing to leave £35 + deposit on a purchase which is effectively only costing them less than £5. If you compare this to blockbuster you just need to be a member with a card and you can rent games and DVDs for the rental price without any additional deposits etc.

You will also need to investigate the rental of video games as I believe standard copies cannot legally be rented and are for purchase only, you need to purchase specific rental copies from the publishers for renting purposes I think?

[Fivestar_wholesale]

The main problem that I can see is that if you rent a game out for two weeks at a time it would take you 16 weeks to earn the £40 it would cost you to have bought the game and that's if it's out constantly.

If you add on a few weeks for when the game isn't being rented it could take you around half a year to cover the cost of the initial investment.

I like the idea of being able to rent a game for two weeks but It wouldn't suprise me if the developers don't, as if this would mean less sales for them.

Also, as mentioned above, I don't think many people would hand over £45 deposit to a market trader who might not be there again.

Not a bad idea, just needs some tweeks!

[James Smith]

Also I believe the games cost a lot more than £40 when you get the proper rental licence....as above you CANT rent out games purchased for re-sale.

[kayemdesign]

If you have over £100k to chuck at the idea then go for it. Your marketing budget for this alone would be inexcess of that figure so personally I would forget it and move on. Harsh words I know, but you have to have a reality check on this.

Would you leave £45 with someone for a £5 transaction, especially when you can go online or visit your local blockbuster and pay £3.50.

It's a complete non starter i'm afraid, and as has been explained to make any sort of profit you have to rent these out for weeks to even make a tiny profit.

Steve

[ActiveHedgehog1]

Reitrate the comments above. i'd go for the subscription market only and focus on that. I would also state that they can have a maximum of 2 or 3 games at any one time. This seems to work with the online dvd market then your not too concerned with people getting back to you within a certain time so saves on your admin costs of chasing and charging.

You would definitely need to go to the games manafacturers directly to get around reselling laws.

[Jiminite]

Thanks to everyone for taking the time to reply. I've rang my supplier and he said that there's nothing preventing me to rent out the games, I just can't charge people to play in a shop (which isn't relevant to me anyway) as it goes against their copyright. I've just emailed a few game manufacturers to make sure.

Leaving a £45 deposit idea was one of my main concerns. Not only would people be unsure whether to leave this, they might be eager to rent from me, but not have the money on them, so they forget about it and I'll loose a rent.

My main reason for the deposit was to make sure customers return the game. I didn't want people to pay £5 for the rent and disappear of the face of the earth with a £45 game. I suppose if I take their address and sent a Rental Card to them at least I'll have a valid address to chase any late returns.

I'm going to play around with some figures. Keep the advice coming.

[defuzz]

it may be easier to take a credit card, I'm sure if you talk to a bank who does such things they can provide a Point of Sale machine for you to swipe cards and "pre-approve" a £50 deposit so it ifthey return the game nothing happend but if they don't you just charge them the £50 (and require a parent's credit card for under 18s)




i'd seriously question your supllier about being allowed to rent out retail versions of the games, I know in the DVD world you are looking at £90+ for a rentable copy of the film, not just the £14.99 it may cost to buy retail.