Koei to start game-rental biz in Japan

  • By Dan Tochen, GameSpot
  • Posted Apr 25, 2006 3:27 pm PT

Publisher's new service will break longtime ban on game rentals across the Pacific--and give nearly half of fees to partners.

Today in Japan, Koei announced that its game distribution subsidiary Koei Net will launch a game-rental business, an unprecedented offering that will shake up Japan's game market. Until now, the Japanese game industry has successfully blocked efforts to introduce rentals here, claiming they would hurt game sales and reduce revenue.

Koei believes that just the opposite is true. According to Koei, rather than cannibalizing game sales, its game rental service will yield an additional revenue stream for publishers, resulting in higher total revenue. The industry will soon see which viewpoint is right: Koei Net's service, dubbed "RentaNet," will launch in the second half of May.

Impress Japan, a Japanese online news site, reported the details from Koei's press conference. Perhaps the most important factor governing the success of this venture is publisher participation, and according to Impress, Koei was tight-lipped in response to questions on this topic, saying only "we have a good number of partners," and refusing to provide exact numbers or company names.

The company was more forthcoming about the details of its service, including revenue sharing and proposed pricing. Most notably, publishers will take home a healthy slice of rental revenue: For every game rental, Koei plans to hand over a whopping 45 percent of fees to the game publisher--a generous offer that will go a long way toward helping the company find partners. Koei will collect 10 to 20 percent of the rental cost as its fee for creating and maintaining the rental system--which will include point-of-sale terminals, inventory systems, and member administration--and the rental shop will retain the remainder.

Koei also discussed its proposed fee structure, unveiling a tiered model that places a high premium on new titles. To maximize sales, new games will not be offered until they've been on the market for at least one month. After one month, and until a given game is three months old, it will be available for rent at 2,700 ($23.50) or 2,800 yen ($24.40) for a five-day rental. There will be a sharp discount for older games; titles that are three months to one year old will rent for 800 ($6.95) or 900 yen ($7.85), and titles more than a year old will rent for just 500 yen ($4.35).

Koei plans a slow start, but believes the potential for this new service is sky-high. Plans call for the first rental location to open in May, with a total of 12 stores by August, and an ambitious 1,500 locations in 2008. One way the company plans to hit that target is to think outside the box. In addition than traditional rental venues like movie-rental stores, the company also envisions placing RentaNet counters at amusement centers, saying "offering rental operations at locations visited by gamers will broaden the channel."

Gamespot will have more news on this venture, including a list of Koei's partners, as it becomes available.

20 Comments

  • ryanwh

    Posted Aug 14, 2006 2:26 pm PT

    Maybe now they'll be able to afford to not reuse their graphics so much in their games. Im sure the price will dwindle as the business becomes less monopolized(see Netflick's effect on Blockbuster prices).

  • NeoJedi

    Posted Apr 26, 2006 9:34 am PT

    Sounds very cool... I hope it takes off for them.

  • darkdaej

    Posted Apr 26, 2006 5:38 am PT

    KOEI, I'll be impressed when you guys actually make a new game. until then, Bleh

  • chrisdojo

    Posted Apr 26, 2006 4:54 am PT

    that's pretty expensive for the newer games. why not just buy it, beat the game and sell it at that rate....

  • kaito2

    Posted Apr 25, 2006 7:13 pm PT

    Odin897-Actually, when I first came to Japan in 1999, they did rent Dreamcast games, but they soon stopped. Yeah, you can rent CDs, but you can't rent video games. On to the topic, I really think rentals are like free advertising for video game companies. The hope is that after you play the game, you will want to buy it, and you paid for this privilege!

  • vaejas

    Posted Apr 25, 2006 6:00 pm PT

    It is quite a coup that game rentals were nixed so early on. Certainly they didn't support the trend in North America before the national chains put their whole weight behind it. Mostly it was the practice of mom-n-pop stores photocopying entire manuals.. back when people used to read manuals.

    I have fond memories of renting imported Famicom SMB3, Mega Drive carts, PC-Engine... no way I could've supported the intensity of my habit as a 13 year old purchaser. Had way too many game magazines to buy!!

    The Japan marketplace has established capitalist retail trends, consumerism is rampant, compared with say, free public library borrowing which is not anywhere near our levels. The glut of review magazines and the relative ease of word-of-mouth in such a condensed population keeps the cash registers churning.

    Now with kiosks and Wi-Fi demos they are starting to come around to a more hands-on viral marketing approach. Second-hand sales are also coming into the mainstream finally. A little bit of free market philosophy could make a big dent in the industry.

  • cyprus646

    Posted Apr 25, 2006 5:22 pm PT

    Ummm whats the point of having a rental series if they put out the same game every year ??? u can rent a DW game on any console and it would be the same no matter which one ur playing.

  • dchan01

    Posted Apr 25, 2006 4:36 pm PT

    [This message was deleted at the request of the original poster]

  • dchan01

    Posted Apr 25, 2006 4:35 pm PT

    25 bucks to rent a game? Good luck.

  • yboucher

    Posted Apr 25, 2006 4:22 pm PT

    Could be a pretty interesting business ! I just hope it doesn't mean the end of arcades in their last known haven... :'-(

  • Game-o_O

    Posted Apr 25, 2006 3:54 pm PT

    News to me aswell o_O, this is awesome though. The operation in America, is much cheaper though. 7 Days for 7$'s, for new games, 5$'s for older ones, if you get a new & an old its, 9$'s (2$'s for the extra ;p).

    But, Game Developers get NO revenue from this ;(. I wish they would change that over here, I want them to get revenue, I don't want them to be pissed. I want them to make money for me renting a game I"m unsure about ;(.

    Btw, I never by used games, Only new games . I know they don't make revenues that way either heh.

  • runstalker

    Posted Apr 25, 2006 3:50 pm PT

    Every time you frequent this establishment, you must first cut a bloody swathe through 500 simulated samurai horsemen. It'll be great.

  • rbarahona

    Posted Apr 25, 2006 3:49 pm PT

    Smart move by Koei. It would be interesting to see if other companies are willing to follow Koei in this new venture.

  • Odin897

    Posted Apr 25, 2006 3:45 pm PT

    So they didn't allow game rental businesses to operate in Japan before this? Wow. News to me.

  • Orasion_Seiz

    Posted Apr 25, 2006 3:42 pm PT

    yeah its a nice move by Koei

  • Joelias

    Posted Apr 25, 2006 3:42 pm PT

    DW Online will be good too see on PS3/PC & XBox360 lol

  • bryehngeocef

    Posted Apr 25, 2006 3:42 pm PT

    That's great for Koei. Totally historical move by a company rooted in historical games.

  • zzzxx

    Posted Apr 25, 2006 3:36 pm PT

    Nice move, Koei. Now all you have to do is make a NEW Dynasty Warriors game. NEW

  • gameloverx

    Posted Apr 25, 2006 3:33 pm PT

    cool

  • valenz

    Posted Apr 25, 2006 3:28 pm PT

    nice

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