The game's afoot at Blockbuster
The DVD rental giant is ramping up its presence in video-game retailing. The chain has always been an active renter of game titles in the past, but now its company-owned stores will begin selling a wider array of hardware, accessories, and software. The move should redefine its stores as a place for permanent purchases, rather than transient rentals.
Blockbuster has undoubtedly noticed what niche leader GameStop
I like the move, but the tactical shift itself isn't a slam-dunk. Awhile ago, Hollywood Video was clearing space among its flick rentals to add Game Crazy video-game sections within its stores, and where did that take it? Blockbuster's nearest competitor wound up cashing out to Movie Gallery and is now wading through bankruptcy court.
Blockbuster has a better shot at making it work, in part because it's using its strengths as a shoehorn. For instance, the chain is now selling a PS3 package that bundles the 40-gig version of the console with a Blu-ray movie, a PS3 game, and a dozen free weekly Blu-ray or PS3 game rentals.
OK, so maybe Blockbuster needs to brush up on its price points. It is selling the system for $500, when the console, Transformers PS3 game, and Spider-Man Blu-ray disc can be bought for just $450 a la carte through Amazon.com
In a year or two, Blockbuster may resemble a smaller version of Hastings
"Blockbuster still rents movies, but that's just a small fraction of its business," I suggested recently in taking a glimpse at what Blockbuster may look like come 2010. "The chain has become more like a RadioShack
OK, so maybe I should have rolled with GameStop instead of RadioShack. Either way, Blockbuster is taking the right steps to build a stable of stallions before it has to retire its one-trick rental pony.
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Longtime Fool contributor Rick Munarriz doesn't go to his local Blockbuster store the way he used to. He doesn't own shares in any of the stocks in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.