Blockbuster horning in on Rhino

Co. looking to expand with new addition's knowledge

Blockbuster has acquired specialty games retailer Rhino Video Games and its parent company American Satellite and Video in a bid to expand its presence in vidgame sales and trading.

Financial details of the sale were not disclosed.

The home entertainment company, soon to be spun off from parent Viacom, has seen video and DVD rental income decline recently. While overall profits have stayed strong, vidtailer recently predicted that total 2004 earnings could drop by more than 10% due to the slowdown of rentals (Daily Variety, April 22).

In response, it has aggressively moved into the vidgame space. Strategy has included the establishment of separate “Game Rush” sections in stores to highlight interactive offerings, establishment of a $19.99 per month unlimited vidgame rental service similar to Netflix, and acquisition of British game retailer Gamestation.

Blockbuster is also planning to launch a rental subscription service and begin offering DVD trades.

Rhino operates 40 stores throughout the Southeast. Blockbuster plans to retain them with the existing brand.

Acquiring expertise

Company is hoping that running stores specializing in game sales and trading will help it to understand and expand into that business.

“Rhino has expertise in game retailing and trading — two areas that Blockbuster is looking to build on,” said Eileen Terry, exec VP of franchising and emerging brands. “Specifically, this acquisition allows us to further our knowledge about Rhino’s game trading business. Much like our Gamestation acquisition in the United Kingdom, Rhino provides Blockbuster with a new growth concept that we believe will allow us to more fully penetrate the games market with free-standing locations.”

A spokesman added that Blockbuster will consider expanding stand-alone game-retailing locations around the country after analyzing the performance of Rhino under its new ownership.

Rhino founder Mike Vorce will continue to manage the chain’s day-to-day operations.