Redbox Rolling Out $2 Video Game Rentals in June
Parent company Coinstar's shares jump 10% after it posts increased first-quarter earnings.
Redbox will roll out video game rentals at thousands of kiosks nationwide for $2 a day starting June 17, parent company Coinstar said Thursday.
The announcement coincided with Coinstar's first-quarter earnings, which impressed investors. Shares jumped 10% in after-hours trading after having finished up 2% to $51.41 during the regular session.
The company posted net earnings that grew 32% to $8.5 million on revenue that was increased 31% to $424.1 million.
Even though Coinstar is named for its machines that extract a fee each time they swap coins for paper money, the company generates a whole lot more revenue from its Redbox DVD kiosks.
In the quarter, the self-service DVD rental business grew revenue 38% to $362 million and sales at its "coin" unit just 2.4% to $61 million.
The company has 18,800 coin-counting kiosks and 31,800 DVD kiosks, 21,000 of which will also house video games.
Video games will become Redbox's most expensive product. It rents DVDs for $1 a day and Blu-ray discs for $1.50.