Video game rental royalties?

I was wondering if anyone knows how the video game rental business works when it comes to companies paying royalties out to the game developers per unit rented or do they agree on a set price before hand or do they just buy the game at retail price and rent the sucker out?

I'm not sure, I'll try and find some info

Nevermind, I'm just going to guess they get a discount on the games and then rent them out to people?

I'm pretty sure that they buy the game at retail and rent it out.

If the company can guarantee the studio a certain amount of profit, the company will cut them a deal on a larger amount of copies.   If the company fails to provide that revenue then the studio will be less likely to cut them bulk deals in the future.

For example, Silicon Knights, who isn't accustomed to the rental market, and didn't make a proper marketing push with anyone other than forum readers, only allowed a scarce few copies per store on discount, so most renters didn't buy many.  Conversely, Turok was heavily promoted by its publisher, pressed in massive quantities, and benefited from corporately mandated marketing pushes from the companies who received the discounts.  Most rental outlets ended up with surplus copies that they can't even sell at clearance, but the profit they made through rentals from uninformed consumers, seeing that massive push on the shelves, was enough to make money for the publisher. 

Therefore, they are more likely to press extra garbage copies of a mediocre game, with a shorter development cycle and slightly more expensive promotional costs, than dumping millions into a AAA game, which took years and tears to develop, and making less of a profit on the same amount of rental copies.

Supply chain management is a bitch.