Redbox Launches Game Rentals, Is This A Catalyst For Coinstar?

Coinstar CSTR has announced that finally after two years of testing, it will be launching nationwide video game rentals, which could be a boon for the company, and its shareholders. The company announced that its Redbox kiosks would be offering $2/night video game rentals, as well as the DVD and Blu-Ray discs it already rents to customers. "From your local grocery, convenience or drug store straight to your family room, the next dance off, face off or family night just got more affordable and fun," said Joel Resnik, vice president of video games, redbox. The company is renting games from PlayStation 3, Xbox 360 and the Nintendo Wii right at the lauThe nch. Some of the games include Brink (PS3, X360), Call of Duty: Black Ops (PS3, X360, Wii), Duke Nukem Forever (PS3, X360) Family Party: 90 Great Games (Wii), Infamous 2 (PS3), Just Dance 2 (Wii), LA Noire (PS3), Lego Pirates of the Caribbean: The Video Game (X360, Wii), Michael Jackson: The Experience (Wii), Red Faction: Armageddon (PS3, X360), and Transformers: Dark of the Moon (PS3, X360, Wii) among others. "America's destination for movies is now giving consumers access to the latest DVDs, Blu-ray Discs and a selection of today's top video games," said Mitch Lowe, president, redbox. "Redbox is now America's one-stop shop for entertainment." What is really cool and innovative about Redbox is that you can go to redbox.com or download the company's free iPhone® app to reserve the titles of you want and pick it up where you want. The company has been competing with Netflix NFLX for the movie rental category, and by adding games, this gives it a leg up over Netflix, as well as Amazon AMZN, which recently entered the fray. Coinstar shares trade at 12.7 times forward earnings, indicating there is no froth in the company's shares. Coinstar is also currently working on a streaming model, similar to what Netflix offers, and has made Netflix one of Wall Street's most loved stocks. That's not to say that the owner of Redbox and Coinstar coin counting kiosks is without its flaws. Shares fell sharply recently after the company cut its guidance and was unable to deliver the earnings estimates Wall Street had been expecting. The company has experienced its bumps along the way, but it looks as if the bumps are behind it. This addition of games could be a game changer for Coinstar. For $2 per day, it could add some sweet profits to your portfolio.