The company said it will shut its 24 Hong Kong outlets during the next 18 months. Two hundred employees will lose their jobs.

A Blockbuster Hong Kong spokesman said high rents were a factor, but pirated films were a major problem.

Pirated movies are available in Hong Kong for as little as HK$10 (70p).

"Hong Kong has always been one of the film capitals of Asia, but it has been a very expensive market to develop and operate," Blockbuster International President Chris Wyatt said in the statement.

Blockbuster Hong Kong spokesman Michael Wong said the costs of rent in the former British colony were the highest Blockbuster faced in Asia.

The chain has had stores in the Chinese territory since 1999, and saw a presence in Hong Kong as a precursor to moving into the Chinese mainland.

It said expected returns from the Chinese market meant it was a poor investment.