Wow. The rumor was true. Wal-mart is indeed acquiring Vudu. Given the retailer’s prior failed attempt at digital media distribution and MediaMemo’s way-off financing stat, I had a difficult time buying it. But the deal is done – so congrats to the Vudu team.

Vudu’s story arc is interesting. From the beginning, and like many, I found the idea of a premium priced, dedicated movie box problematic. And suspected we had another Moviebeam on our hands as Vudu nearly folded late in 2008 when they discovered what most of us already knew. But after a few rounds of layoffs, a new strategy to port the Vudu experience to 3rd party hardware, a press relations agency upgrade, and additional financing, they quite successfully weathered the storm.

With Best Buy embracing TiVo and Napster it sort of makes sense Wal-mart would want a digital distribution partner of their own. Although the investors recouped their cash, consumers probably aren’t the big winner here. I fully expect Vudu’s AVN channel will be the first thing axed. And Dan Rayburn anticipates the whole enterprise, under Walmart’s stewardship, will fail.

I do hope the original stand-alone boxes see one more software upgrade to move them off P2P distribution and onto the CDN in use by all other Vudu devices. Rather than a complete shuttering. Also, in light of the acquisition, my plan to find a deal on a LG BD390 is on hold.

(This post republished from Zatz Not Funny.)

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Best Buy and Wal-Mart, who both experimented with used game kiosks last year, are pulling out, according to IndustryGamers. Both companies relied on a third-party, E-Play, to run the kiosks, and will remove the machines over the next few weeks. E-Play’s Web site has a sombre little message saying they’ve suspended operations, and thanking customers.

In addition to offering credit or debit card credit in exchange for used games, the kiosks rented DVDs (as long as there wasn’t a Redbox machine in the store as well), Blu-ray discs and video games.

A couple guesses why the pilot programs failed: Unlike Gamestop, where you can call to find out a game’s trade-in value, a kiosk is unpredictable, and the prices E-Play offered — $25 for new titles down to 50 cents for throwaways — isn’t better than anywhere else.  Marketing and awareness could’ve come into play as well. If you call Gamestop, you’ll likely hear, “Thank you for calling Gamestop, where we buy and sell used games” on the other end. Somehow, “Welcome to Wal-Mart, check out that kiosk over there” doesn’t have the same ring.

All’s not lost for trading games outside of GameStop. Toys R’ Us, which began buying used games in select markets last year, expanded the program nationwide in September. Amazon will buy your old games in exchange for online store credit, and Wal-Mart still sells used games online, but does not buy them. Still, none of these competitors offer the whole package of buying and selling used games. Local stores and smaller chains, such as Game Crazy, are still around (barely), and thrifty gamers will still rely on Craigslist, eBay and Goozex.

But for most of the United States, for quickly unloading a used game and getting another one in its place, GameStop’s got it locked down.

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While there is no contract, customers must purchase an eligible phone. Wal-Mart is offering an entry-level LG 220 flip phone at $39.98, an LG Slider 290 at $79.98, and the Samsung 451 QWERTY keyboard phone at $99.88. Minutes may be added to phones at its stores or via the Web.

As a technophile, it’s tempting for me to point out the short comings of those devices. There are only a few stock applications available, and unlimited data on a flip phone does not translate to the same experience that I have surfing the Web on my iPhone. But that does not matter, because the people who would buy these phones wouldn’t care.

Last year, my family bought my 90-year-old grandfather a pre-paid cell phone from Best Buy. I’m not sure what brand it is, but it was one of a few options that I usually see at mall kiosks. The Wal-Mart brand is much stronger than any of those, and we probably would have bought a phone from it if we had the option.

It’s also an economical choice for families with shoestring budgets. Leading wireless companies provide family plans, but they aren’t cheap, and usually require a commitment. AT&T even charges parents that want to place restrictions on their kids’ usage. A pre-paid plan doesn’t require families to purchase much more than what they want to pay for.

Whether Wal-Mart becomes a viable wireless company or not is up to the market, but its track record is pretty solid. Wal-Mart rapidly became the largest grocery store in the United States after all, and it has more locations than other pre-paid wireless companies. Im guessing it’ll do well.

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Wal-Mart is testing standalone buy back kiosks at 77 stores in New York, Massachusetts, Connecticut and Rhode Island, Video Business reports. The kiosks will scan the bar codes of used games and separately swallow the disc and casing in exchange for money transferred to a credit card.

The kiosks will also rent video games and DVDs, but the DVD rental function will be switched off in stores that already have a Redbox kiosk. Games and DVDs will cost $1 per night, and Blu-ray rentals will costs $2 for the first night and $1 per night after that.

As with GameStop and, more recently Amazon, the buy back price is a point of discontent. Wal-Mart’s kiosks will spit out the usual range of offers, from $25 for high-demand games to 50 cents for undesirables. Generally, you can expect used games at those trade-in prices to sell back for double. I’m surprised none of the competition wants to tinker with that formula and see how it affects market share.

It’s not clear what will happen to the used games. Instead of operating the kiosks directly, Wal-Mart is leasing space in the vestibule area, just outside the stores themselves, to a company called E-Play. That company has a “couple different methods” for resale, marketing VP and business development executive Kristen Fox told Gamasutra, but declined to be more specific.

Meanwhile, a writer for Neocrisis has already spotted one of the kiosks (seen above). It lacks Wal-Mart branding, except for the slogan “Save Money. Live Better.” Notably, Neocrisis reported some serious bugs in these early boxes. Most of the games offered didn’t scan, and the only one that did — the fairly high profile Mirror’s Edge — wasn’t in the kiosk’s database. The writer walked away without trading anything.

Maybe humans have some merit after all.

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Wal-Mart and Amazon seem to have been the biggest beneficiaries of Circuit City’s fall, splitting the company’s business rather evenly. Best Buy has not seemed to gain much at all, even though it was expected to by analysts.

Displays will be roomier, and top brands will get their own distinct sections. The moves are a continuation of Wal-Mart electronics expansion, this time apparently aimed at making the department more sophisticated.

One thing that will make computer manufacturers happy is a new laptop section where consumers will be able to try out the products. Many were not happy with Wal-Mart’s strategy of keeping them locked away to prevent shoplifting: this would bring them more in line with what other electronics retailers do.

The recession has definitely helped out the retailer: consumers that normally would not shop there have turned to Wal-Mart in search of better deals. Company executives see this, and are making an honest effort to step up their game to keep these new shoppers when the economy improves.

Changes in consumer behavior is also being noticed by the manufacturers themselves: Wal-Mart is now able to compete for first runs of new products, whereas before they weren’t even considered.

(Hat tip: Wall Street Journal)

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Like iTunes, both stores have cheaper tracks too: Amazon will have tracks for 79 and 89 cents, and Wal-Mart will have selected tracks at a price of 64 cents. In either case, though, the number of more expensive tracks in the top 100 are much less than iTunes.

For Amazon, that number is only eight, and Wal-Mart has 17.

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Sneak peek: Dell’s Adamo notebook.

Macworld’s iPhone 3.0 wish list.

Three More HTC Android phones.

Nine-hour MSI Wind netbook.

Comcast passwords exposed on Web.

Super-fast game download service.

Boxee does an iPhone remote control.

Best Buy takes on Walmart.

Rough February for Macs, iPods.

HP adds long-life batteries.

Nintendo victorious in remote lawsuit.

Vatican: Serious about the Internet.

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As of Sunday, iPhones will now available at Apple Stores, AT&T stores, Best Buy, and Wal-Mart. And I hope that this marks the end of it being worth of note when Apple lines up additional retailers. (It does feel inevitable that RadioShack will join the lineup eventually, given that it currently sells both iPods and phones.)

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* The first sentence of Bloomberg’ story, by Connie Guglielmo, says that “two store representatives [say] the world’s largest retailer will carry two models of the Web-surfing handset this month.” The second sentence says “Employees in the cell-phone departments at five California stores, contacted by phone today, said Wal-Mart will offer iPhones by the end of December.” I don’t understand the distinction between the two Wal-Marters mentioned in sentence #1 and the five mentioned in sentence #2. (Not surprisingly, Wal-Mart declined official comment.)

* Guglielmo’s Wal-Mart sources provided at least three different statements about when it would launch in their stores: “around Dec. 15,” “between Christmas and the New Year,” and “Dec. 28.” Presumably it’ll launch everywhere at the same time. And launching the hottest cell phone on the planet shortly after Christmas would be peculiar timing.

* The Mercury-News story, by Troy Wolverton, quotes another Wal-Mart staffer as saying “Originally they were going to release it before Christmas, but they can’t get them that fast to us,” which might explain the timing decision. Except that Wolverton found another store employee who said that her location was supposed to be getting phones two days before Christmas: “They’re trying to push it before Christmas because they know how people will want it for Christmas.”

* The Wal-Mart staffer who told Wolverton that her location would be getting phones two days before Christmas also told him that she’d been told it would be getting a 4GB model–presumably the fabled $99 iPhone. But other Wal-Marters told Wolverton there’d be no $99 model, and a leaked image of a Wal-Mart ad mentions no sub-$100 phone. (It does mention a low everyday price of $197. Two bucks less than Apple and AT&T’s price.)

Ultimately, I’d say that:

* iPhones at Wal-Mart in December appear highly likely;

* We don’t know if they’ll show up a bit before Christmas, or a bit after;

* Apple may be struggling to crank out enough iPhones to stock all those Wal-Marts. (There are 4,100 of them in the U.S., versus around 200 Apple Stores and 900 Best Buys. I’m checking on how many AT&T Stores there are. AT&T has 2200 company-owned stores.)

* The prospect of a $99 iPhone still seems unlikely. At least a $99 iPhone available imminently and sold only through Wal-Mart.

More updates as breaking news warants…

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