Rentals will cost $2 per day – as opposed to the $1 per day rate the company charges for DVDs and the  $1.50 it gets for Blu-Rays. Games will be available for the Wii, Xbox 360 and PlayStation 3.

DS owners are out of luck, though. While the company did experiment with handheld games during its market tests, it has decided to ignore systems like the Nintendo DS to focus on home consoles.

"At this point in time, we're focusing on the [home console market] based on the overall installed base of those platforms and [their use of the] physical media that we're familiar with," says Joel Resnik, vice president of games for Redbox. "The handheld is in transition. … I feel like it's an upside opportunity down the road."

Kiosks will generally have an initial library of 20 unique titles. The company hopes to expand that to 24 in the coming months. Resnik says Redbox expects to offer 80-100 unique titles per year.

The company spent two years testing game rentals via a pilot program. While they were only available in 5,000 kiosks, Redbox still managed to rack up over 1 million rentals.

With the shock wearing off after yesterday's announcement about the scope and magnitude of the hacker attack on the PlayStation Network, Sony is now having to deal with the ugly public relations fallout.

Gardner analyst Avivah Litan says the incident is the largest theft of personal information to ever occur. That has spurred politicians in two countries to demand answers. And, as expected, the first of what will likely be several lawsuits has already been filed.

Senator Richard Blumenthal was the first to publicly chastise Sony for the data breach, which saw personal information for more than 70 million subscribers hijacked by hackers. In an open letter to the company, the Connecticut democrat made several demands of the company.

"It is essential that customers be immediately notified about whether and to what extent their personal and financial information has been compromised," he wrote. "Additionally, PlayStation Network users should be provided with financial data security services, including free access to credit reporting services, for two years, the costs of which should be borne by Sony. Affected individuals should also be provided with sufficient insurance to protect them from the possible financial consequences of identity theft."

In Britain, meanwhile, the Information Commissioner's Office says it will determine whether Sony adequately protected customer's credit card information, saying "any business or organization that is processing personal information in the UK must ensure they comply with the law, including the need to keep data secure".

Meanwhile, in the Northern District of California, a lawsuit has been filed on behalf of Kristopher Johns, 36, of Birmingham, Ala., saying Sony did not take " "reasonable care to protect, encrypt, and secure the private and sensitive data of its users."

The suit seeks monetary compensation and free credit card monitoring. It is seeking class action status

Sony, for its part, denies that it intentionally withheld the severity of the breach from its customers.

"We learned there was an intrusion April 19th and subsequently shut the services down," the company said in a blog posting. "We then brought in outside experts to help us learn how the intrusion occurred and to conduct an investigation to determine the nature and scope of the incident. It was necessary to conduct several days of forensic analysis, and it took our experts until yesterday to understand the scope of the breach. We then shared that information with our consumers and announced it publicly [Tuesday] afternoon."

After six days of silence, Sony has revealed more about the security breach of its PlayStation Network – and it's much worse than expected.

The company says hackers obtained personal information for all of the service's 70 million subscribers. Still unclear is whether the credit card information on file with the service was compromised.

"Although we are still investigating the details of this incident, we believe that an unauthorized person has obtained the following information that you provided: name, address (city, state, zip), country, email address, birthdate, PlayStation Network/Qriocity password and login, and handle/PSN online ID," wrote Patrick Seybold, senior director of corporate communications for Sony Computer Entertainment America, on the company's blog. "It is also possible that your profile data, including purchase history and billing address … and your PlayStation Network/Qriocity password security answers may have been obtained. … While there is no evidence at this time that credit card data was taken, we cannot rule out the possibility."

Sony shut the system down after noticing the attack and has not given a firm date for when it will once again go live. The company says it expects to restore some services within a week.

To date, no group or individual has claimed credit for the attack.

Video game industry veteran John Schappert, who has served as chief operating officer at Electronic Arts for the past two years, has quietly left the company.

Schappert's last day was yesterday – and media reports indicate he plans to join social gamers maker (and EA rival) Zynga in an undisclosed role.

If those reports are accurate, it would be one of Zynga's most high-profile hires to date. The company has quietly been cherry picking developers from several studios, but with Schappert in a senior role, the company would be much better positioned for its long-rumored IPO.

Before his stint at EA, Schappert spent two years running Microsoft's Xbox Live division. He is also the founder of Tiburon Studios, which makes the Madden (and several other sports) games for EA. All totaled, he comes with over 20 years of industry experience.

EA, of course, has been expanding steadily into the social gaming space, where Zynga is the undisputed market leader. In 2009, the company bought Playfish in a deal worth up to $400 million. Since then, EA has been increasingly relying on that division to drive up digital revenues.

Last year, Zynga's estimated market cap surpassed that of EA, topping $5.5 billion. Insiders have been waiting for the company to announce plans for an IPO for some time now, noting that the company has grown much too big to be acquired. 

Most companies ignore the rumor mill – sometimes to the point of it being embarrassing. Nintendo, however, is willing to admit when its secrets are spilled.

The company has confirmed the rumors that it plans to unveil a successor to the Wii at this year's E3 (the annual trade show of the video game industry). The new system will be out in 2012.

In a three-paragraph statement (which began with the stiffly formal "To whom it may concern:"), the company announced the product, without giving away any details about functionality or even its name.

It was similarly tightlipped on an earnings call.

"As for the details of exactly what it will be, we have decided that it is best to let people experience it for themselves at E3," said Satoru Iwata, Nintendo's president and CEO. "So I won't talk about specific details today, but it will offer a new way of playing games within the home."

Launched in 2006, the Wii has sold more than 86 million units worldwide. Compared against the Xbox 360 and PlayStation 3, though, the system has grown long in the tooth, due to its lack of high definition graphics and weak multiplayer component.

Combined with weakness in the handheld market, that has started to impact Nintendo's earnings. The company had a net profit of 77.6 billion yen ($946 million) in its just completed fiscal year – a 66 percent drop from a year ago.

Rumors about a new home console from the company have been swirling for weeks now, with some developers privately acknowledging they were expecting software development kits for the system imminently. 

Players hoping to play a multiplayer game on their PlayStation 3 haven't been able to do so reliably for several days – and for the past three days, they haven't been able to do so at all.

The PlayStation Network – the console's online service – has gone down and at present, no one seems to know when it's coming back. Sony, in a blog update about the outage yesterday, said it was investigating the cause, but "it may be a full day or two before we’re able to get the service completely back up and running." Since then, the company has remained silent.

Problems with the network were first acknowledged by Sony at 8:50 p.m. ET on Wednesday. No reason has been given for the disruption, but a post on the European PlayStation blog (which has since been removed) hinted an external attack could be at fault.

Sony has been the target of the hacking group Anonymous for a while, due to its legal fight with PS3 hacker George Hotz. The group announced last week that even though Hotz and Sony had settled their dispute, it did not plan to relent.

A network outage of this sort is embarrassing and frustrating for Sony, but it's not quite the disaster it would be had this happened with Microsoft. PlayStation owners have free access to multiplayer games on the PS3, while Xbox 360 owners must pay a $60 annual subscription fee to access those (and other online) features.

Update: Friday evening, Sony confirmed via its blog that the outage is due to an external attack. 

Sony spokesperson Patrick Seybold wrote “An external intrusion on our system has affected our PlayStation Network and Qriocity services. In order to conduct a thorough investigation and to verify the smooth and secure operation of our network services going forward, we turned off PlayStation Network & Qriocity services on the evening of Wednesday, April 20th. Providing quality entertainment services to our customers and partners is our utmost priority. We are doing all we can to resolve this situation quickly, and we once again thank you for your patience. We will continue to update you promptly as we have additional information to share.”

The hacker group Anonymous has denied responsibility for the attack.

As digital distribution continues to grow in the entertainment field, insiders and investors alike are trying to find new methods to get some clarity about the dollars behind it.

At Valve Software, which owns Steam, the leader in PC digital distributor, however, there are no plans to help those parties out. The company says it has no plans to open up its digital sales data vault, noting "it's not important" information for the industry or public.

The company provides data to its partners about how their own titles are doing via an on-the-hour sales tracking chart – but doesn't feel there are any advantages to sharing the macro data.

"The point is, it’s not super important for a publisher or developer to know how well everyone is doing," said Jason Holtman, director of business development at Valve. "What’s important to know is exactly how your game is doing – why it’s climbing and why it’s falling. Your daily sales, your daily swing, your rewards for online campaign number three. That’s what we provide."

To put things in perspective, The NPD Group, which tracks video game sales, found that in 2009, digital downloads of PC games essentially reached parity with retail sales. 21.3 million full-game PC titles were purchased online in the U.S. last year, compared to 23.5 million units purchased at retail stores. However, PC digital downloads accounted for only 36 percent of 2009’s PC game dollar sales.

Launched seven years ago, Steam now hosts and sells over 1,100 titles and has over 25 million active user accounts. Virtually every major publisher in the industry uses Steam to sell PC versions of its games.

While "Law & Order: Los Angeles" faces an uncertain future on the air, it's ramping things up in the gaming world.

Universal Pictures has partnered with Telltale Games to create an episodic gaming series based around the Dick Wolf production. Due this fall, the title will see wide distribution, appearing on the PC, Mac, consoles, tablets and mobile devices.

Like the show, the game will have a dual focus: crime solving (consisting of interrogation and criminal investigations) and courtroom drama.

"We've always been interested in 'Law & Order' because we like the idea of investigations and we like the idea of doing something legal, like the 'Phoenix Wright' games," says Dan Connors, co-founder and CEO of Telltale Games. "It's a great franchise for the type of games we like to do."

Telltale is not disclosing specific details about the title at present. The game will feature the show's main characters, including Alfred Molina's Det. Ricardo Morales and Terrence Howard's D.A. Joe Decker – though it's still uncertain if players will portray them or new characters who work and interact with them in their offices. Actors from the show have not yet committed to doing voice work for the title, but Telltale hints it is in talks.