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To start a video game rental business

Old 12-19-02, 06:47 PM
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To start a video game rental business

Need some help...
I want to get my own rental store! I have someone helping me out with the financial and real estate part of it,
but I'm having difficulty finding information on how rental stores work. All the searches come up with books or plans and you have to pay. I know this information is free, I just don't where to look. I assume you have pay back some of the profit to the game devolpment studio/maker, but how?
I want to have a store that you can buy and rent games from. Also, maybe some niche dvd titles (like anime, foriegn etc) nothing mainstream cause thats what blockbuster is for.
thanks!
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Old 12-19-02, 10:42 PM
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I have no advice. I hope it works out for you, but every store I've ever seen that was a video game only rental store has gone out of business.

Of course, one thing they almost all had in common was that they seemed to be run more as a hobby than a business (from things like not being open when they were supposed to be, to just not a general clean, neat appearance).
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Old 12-19-02, 11:43 PM
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be cautious, its really hard to compete with places like blockbuster and hollywood video, but best of luck to u!
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Old 12-20-02, 12:14 AM
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http://www.houseofanime.com in Atlanta has been doing something like that for over 10yrs and they have 3 Blockbusters and a Hollywood video nearby. They have anime Videogames/Anime VHS and DVD/Hentai/ and collectibles so it can be successful but you need to fill a consumers need that other large chains can't.




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Old 12-20-02, 02:03 AM
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Um, if you're looking to start a business, wouldn't the least thing you'd have to be worried about paying for is how to start it properly??? I'd pay for that information if I was really serious about it.
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Old 12-20-02, 07:51 AM
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I know a guy who tried it and went under, it's not a very good venture unless you have a major following of geeks and a very visible location.
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Old 12-20-02, 09:39 AM
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I used to work at a video game store owned by a friend of mine. I helped him build the business from the ground up. I helped him set his business model, and how the store would be set up.

I can tell you right now, unless you have a niche product or are in an area w/ no Blockbuster or Hollywood Video stores, you won't survive. The rental video game market is a killer. Unless you can offer something above and beyond everyone else, it just won't work.

I can help you out if you want, so if you are looking for answers post them here.
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Old 12-20-02, 09:58 AM
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the movie/video game rental business is a dying one....blockbuster looses money .....
just my .02
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Old 12-20-02, 10:07 AM
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I really don't understand how BB makes money renting videogames.

A typical game maybe costs them what, 40 bucks? (This is going from a previous thread that stated that markup on games in almost nonexistent). They rent out a game for 4 bucks for a week. It'll take a game being rented for 10 weeks straight for them to even make even. (this is not taking into account used game sales, so if they sell it for 20, they turn a profit after 5 weeks). The problem is that they need to have a pretty wide selection of games, and a lot of the more popular games. So less popular games might be rented once or twice. Especially in an industry where new product comes out so much, older games will probably languish on the shelf after a while, with maybe the occasional rent.

Of course, the saying is that they make most of their money on late fees. But it'd be really hard to run your own video game rental business with a wide enough selection of games to make it worthwhile, especially because you have to somehow get a backstock of older games. Good luck, though,and let us know how it turns out!
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Old 12-20-02, 10:43 AM
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Blockbuster makes money/breaks even on the games when they eventually sell them.
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Old 12-20-02, 11:59 AM
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Originally posted by Deftones17
I used to work at a video game store owned by a friend of mine. I helped him build the business from the ground up. I helped him set his business model, and how the store would be set up.

I can tell you right now, unless you have a niche product or are in an area w/ no Blockbuster or Hollywood Video stores, you won't survive. The rental video game market is a killer. Unless you can offer something above and beyond everyone else, it just won't work.

I can help you out if you want, so if you are looking for answers post them here.
Rental is not the primary focus. I wanted to mainly sell import games, anime, and foriegn dvds. I found a location that gets a lot of foot traffic and does not have store like that in the area.
I was also toying with the ideas of renting, because sometimes a lot lesser known titles you don't want to drop 40-60 bucks on, but you want to try it just the same. I was trying to find out some info on how that works. renting of games/dvds, do you pay royality, how does it work if the game/movie orginates from outside the US?
I know it will be tough, but its something I always wanted to do.
The games at blockbuster are the same crap games I don't want.
also, what about older titles? your not going to find them there.
There used to be this little video store in my neighborhood when I was a kid. You can keep all games and videos for 3 days and it cost 2 bucks. They had all kinds of stuff, mostly things that blockbuster was too big to have. And yes there was a blockbuster down the way, but it didnt seem to hinder their buisness that much
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Old 12-20-02, 12:43 PM
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How are you going to get import games? I am also interested in this business, but don't know how you would get import products to sell.
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Old 12-20-02, 12:52 PM
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You know, I never thought of the royalties a rental place might have to pay to allow games that they bought to be rented to others. I wonder how the mom and pop places do it... do they just buy a game at Bestbuy and rent it out without really getting that license?

Is it legal to sell import games here? I've seen stores do it, but legally woudn't that "for sale only in Japan" sticker cause some problems? Especially with territorial lockout on the systems themselves. (of course, you can bring back stuff for personal use, just not to sell) And then, I doubt there's a legal way to contact Japanese companies to allow you to rent their games out... again, I'm sure places that do this do it under the table. I mean, considering that some of these kinds of places rent out stuff like fansubs and the like...
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Old 12-20-02, 01:06 PM
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Originally posted by DamingR
How are you going to get import games? I am also interested in this business, but don't know how you would get import products to sell.
Not to mention who you are going to sell them to. People with hacked dvd players, PS2s and Xboxes. There can't be very many of those within driving distance.
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Old 12-20-02, 01:31 PM
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Speaking of unprofitable business models... I live in a residential south suburb of Chicago. For a long time the most popular video rental store in town was Family Video. I think it's a chain since I've seen it elsewhere, like down in Champaign, IL.

Anyway, about 3 years ago a Hollywood Video opened up across the street. It didn't get much business. Then about a year after it opened, I think they started a price war. Because for the last 2 years every movie rental (VHS, DVD, new & old releases) has been only $.99 for a full five days. Late charges are also only $.99 for each additional 5 day period. They also have a ton of new movies with the guaranteed-in-stock policy. Game rentals are only $2.99 for 5 days.

I don't see how they can continue much longer like this. I mean, I don't mind, since I'm renting stuff for so cheap, but the store has got to be losing a ton of money. Doing this for 2 years+! Recently the Family Video across the street has changed their rental fees to $1 for all new releases too.

It just seems like a business model with low profit margins too. That's fine if you're a big corporation with multiple stores, but not so good for individual enterprises.
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Old 12-20-02, 01:52 PM
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Originally posted by Roto
Not to mention who you are going to sell them to. People with hacked dvd players, PS2s and Xboxes. There can't be very many of those within driving distance.
you would be surprised....
especially considering the property i'm looking at is across the street from a university
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Old 12-20-02, 01:52 PM
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Well, once they run mom and pop out of business, they're free to jack prices right back up. I'm sure Hollywood Video is bigger than Family Video, and can outlast them.

I mean, think about it... to just buy a movie, forget about having an agreement with the company to rent it out, must cost at least 20 bucks. That's 20 straight .99 rentals, or 100 days, just to break even. wow.
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Old 12-20-02, 02:26 PM
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why not set up a system that is pseudo-renting. For example, you could sell games at regular price. You could have a policy that after a few days the customer can return the item for x% credit with a sliding scale. Say 90% after two days, 75% after one week, 50% after two weeks or something like that. That way people can try a game out with just a little risk with offering something different than the big boys. good luck.
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Old 12-20-02, 02:48 PM
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40 bucks
per game is not that much.

considering the rental stores spend $80+ to buy a movie that they will be renting.
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Old 12-20-02, 03:20 PM
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Originally posted by squidget
you would be surprised....
especially considering the property i'm looking at is across the street from a university
Well that should help

I know a guy who has owned a video store for well over a decade and he's doing fairly well. His success is mostly due to the fact that he has an adult section. Other than that his store looks like any Blockbuster. It's mostly mainstream movies, he doesn't have any neon signs in the windows saying XXX or anything like that. So he gets plenty of families in there too.

He's also on the corner of a high traffic intersection in the suburbs just a few blocks from the freeway. Location, location, location.
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Old 12-20-02, 04:09 PM
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Originally posted by descartes
why not set up a system that is pseudo-renting. For example, you could sell games at regular price. You could have a policy that after a few days the customer can return the item for x% credit with a sliding scale. Say 90% after two days, 75% after one week, 50% after two weeks or something like that. That way people can try a game out with just a little risk with offering something different than the big boys. good luck.
That's not a bad idea. Then I don't have to worry about the fees you have to pay to offically rent games
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Old 12-20-02, 09:40 PM
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Originally posted by descartes
why not set up a system that is pseudo-renting. For example, you could sell games at regular price. You could have a policy that after a few days the customer can return the item for x% credit with a sliding scale. Say 90% after two days, 75% after one week, 50% after two weeks or something like that. That way people can try a game out with just a little risk with offering something different than the big boys. good luck.
Or... you could just do rentals like most stores do. But if they want to puchase the game after renting it, then that money they spent towards the rental would be able to go towards purchasing a brand new game of the exact same title. That way you could get customers that would be more likely to rent from you, because they know if they want to buy the game, then they can puchase it from you as well and save the $5 or so if they had to go to another store. The only problem with this is that it would have been an AWESOME idea back in the days of Carts. I remember playing Earthbound, getting incredibly far in it during my rental, and then having to start all over again when I bought it. If I was able to buy that cart which I was renting, then I wouldn't of had to waste another three days of nonstop playing to get back to where I was. I'm not sure if having memory cards would take away from this idea...

And if you have a $50 game, and you return it after two weeks and get $25 back... you could have rented it from Blockbuster for that time for a lot less money. And don't certain video game stores already let you return if it has been within a week or so for either cash or in store credit?

Also, if you know certain older games are popular, you could set up a system where you buy specifc used games and then you could put them out for rental or resell them. And give them in store credit to go towards another purchase.

What type of games are you looking into renting? As far back as SNES and NES? Just curious...
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Old 12-20-02, 09:49 PM
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I assume you are already looking at software to track rentals and late fees. This can be expensive unless you know enough to write a program yourself.

Also what are you getting to allow someone to rent? A credit card and driver's license?

losses for a small operation can be large since even a single renter a month renting and never returning 4-5 games will be an issue.

Personally I would look more at the sales model and less at the rental model.
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Old 12-20-02, 10:27 PM
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Originally posted by squidget
Rental is not the primary focus. I wanted to mainly sell import games, anime, and foriegn dvds. I found a location that gets a lot of foot traffic and does not have store like that in the area.

I suggest you highly, highly, highly research something before you jump right into it. One thing you can do, is usually get information from the real estate agent about people living in the surrounding area. Find out the median income, the type of housing, etc. in your area. You don't want to be putting a store like this in the middle of a retirement community. You also don't want to be putting it in a community that does not have a lot of disposable income. The person handling the lease for the shopping center or where ever you are thinking about should be able to get this info for you.


Originally posted by fujishig
You know, I never thought of the royalties a rental place might have to pay to allow games that they bought to be rented to others. I wonder how the mom and pop places do it... do they just buy a game at Bestbuy and rent it out without really getting that license?

Is it legal to sell import games here? I've seen stores do it, but legally woudn't that "for sale only in Japan" sticker cause some problems? Especially with territorial lockout on the systems themselves. (of course, you can bring back stuff for personal use, just not to sell) And then, I doubt there's a legal way to contact Japanese companies to allow you to rent their games out... again, I'm sure places that do this do it under the table. I mean, considering that some of these kinds of places rent out stuff like fansubs and the like...
Well, there's no royalties you have to pay for renting video games. If you choose to buy a game at BB and rent it out, that's your business. As for selling imports, *technically* that stuff is for sale in the country of origin, but no one every really enforces that policy.
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Old 12-20-02, 10:35 PM
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All the rental places around here at least charge $5/week for game rental, BlockBuster is $6/week. That's why I don't rent them. Too much money. If someone charged $3-4 for 3 days or maybe gave you the option where you pay a dollar a day then I'd rent more. I used to just get them free when they were out of stock and guaranteed at BB, but they quit doing even that.

There is a local rental place by me, here's their secret: lots and lots of porn. If you have a local video store, rent hardcore porn, anime, and video games. Put emphasis on porn though.
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