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Redbox, everyone’s favorite video rental kiosk, is going to try their hand at renting another type of disk - video games.

According to their Wikipedia entry, Redbox has over 22,000 kiosks in the United States. The big draw is the convenient locations and cheap prices; you can rent a DVD for a buck a day, with no late fees. Some locations also stock Blu-ray versions of movies for an extra fifty cents.

Now, Redbox is going to challenge companies like Blockbuster and GameFly by offering video games for a daily fee. According to USA TODAY, rentals will cost $2 a day and will mainly consist of new releases. The article goes on to state that games will be available for most major systems, including the Wii, Playstation 3, Xbox 360, and Nintendo DS.

The service is expected to rollout in the West, Midwest, and Atlantic US markets in the near future and could have a wider release if the service proves profitable for the company.

The question is whether people will be willing to pay $2 a day for a video game when services like GameFly allow customers to rent games indefinitely for $16/month. The key differentiator may be in the supply of games. One of the biggest arguments against GameFly is the fact that they rarely have new games in stock in a timely manner. If Redbox can have a good supply of games at launch, people may be willing to pay the extra money to have the game in hand when they leave their local grocery store.

Neowin has the details HERE!