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It sucks, but Blockbuster is in the business of making money. Blockbuster has to buy their games at full retail price. With games at $50 and $60, a game has to be rented 8-10 times just for Blockbuster to break even. Next-gen games don't rent well, at least not in my area. My store in particular hasn't made its money back on ONE PS3 game yet.
Renting games at Blockbuster is a rip-off. Like everyone has said, get Gamefly.
And Wedge, brick and mortar stores will never go out of business. Mom and Pop stores might. Hollywood Video/Movie Gallery are on their way out. But Joe and Jane Consumer will always need the brick and mortar establishment. Netfliz and Gamefly are great and all, but some people just don't want to wait for the mail. In reality, digital distribution is the only threat.
Gamefly has a monthly fee. There's too much crap being paid for monthly. I can't do that right now. Not yet, anyways.