Redbox, the DVD and game rental kiosk company, is largely responsible for its parent company Coinstar nearly doubling its profits over the past year according to second quarter earnings reported today.

Additionally, the June introduction of video games to the available discs proved successful enough that Redbox is expanding them to an additional 5,000 kiosks beginning August 1. The company said this will bring the total number of kiosks offering both movies and games to 27,000 out of its 33,000 total.

Redbox Automated Retail is a wholly-owned subsidiary of Coinstar Inc., which projected a third-quarter profit of 83 cents to 93 cents a share, with revenue between $450 million and $470 million. Revenue from Redbox, broken out, grew 34 percent to $363.9 million.

Coinstar shared two Redbox milestones, as well. It has rented more than 4 million games since its game rentals launched in 2009, and after eight years in business it reached its 1.5 billionth movie rental in June.

The company remains bullish on shiny discs, even as Netflix pushes streaming and Blockbuster suffers the final pangs of bankruptcy. “More than 1.5 billion movie rentals and the positive consumer reaction to video games highlight the ongoing demand for physical media,” said Mitch Lowe, president, Redbox.

He added that adding all-digital offerings to Redbox services was “a priority,” however, and that he expected further developments along those lines before the end of 2011.

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Coinstar Inc. earnings call –