Large video game publishers are complaining that they can?t compete with $.99. Of course they can. They just need to adjust their business model.
I am a 20 year veteran of the games industry and have witnessed much of the change being discussed first hand. I have worked as a video game publisher, developer, independent and now direct a social games company.
The "traditional" video game industry is very much like the movie business. Only the hits really make money and when they do it can often be a windfall. If you spend a lot to develop a game, of course, you need to sell a lot to make it profitable. When you are a "traditional" publisher, the expectation from your stake-holders is that you are targeting the top of the market. You became a top publisher because you successfully navigated the waters and were fortunate enough to come to the surface with a hit on a major console. Doing this many times over is expensive and risky. The risk has gotten extreme. It costs tens of millions of dollars just to market a top selling game today. Budgets for AAA console development today start at $30 million. Because of this games cost $60.
The truth is, the public expects "shiny" on consoles and it's less risky for a publisher to reheat and polish something old than start from scratch. So, in the ?closed? world of consoles, we see a lot of graphically rich copycats with little innovation and, as game players, we feel robbed of $60.
Something new has come to town. It?s fast, tasty and cheap. Consoles are online, have storage and can provide a shopping experience straight from the couch. Players are mobile, portable and always connected to a rich source of delicious content through the Internet ($.99 content ? impulse buyer?s content).
The online phenomenon is the true culprit, not $.99 apps. Traditional console publishers need to reinvent their business model if they want to stay relevant.
The digital goods (fast food) model offers the console publishers what they need but they haven?t fully opened their eyes to it yet. ?Modding? was an early example of how the industry started to create a business model that benefitted from reheating and seasoning what had been developed prior. Yes, this was a PC phenom, but consoles are now on the Internet.
In the mod business model you initially sell a core game experience. Then games with modifications ?mods? are released for purchase or free. The hitch is that players need to buy the original game to play the new mod.
If AAA publishers stop to analyze what they have, they are in a great position. The next generation of consoles will be connected to a high speed network, and with robust architectures for content distribution.
Give away the core game for $2, attract a broader audience and sell digital goods (upgraded features and compelling skins, stories, environments, characters, sounds, etc.). Players will easily spend $60 and more, but in smaller bites and the shelf life will be extended. Selling smaller pieces also gives you an understanding of what players are truly reacting to. It gives you plenty of room for innovation in marketing (E.g. time to play with pricing and limited runs on certain elements to add value).
Bottom line: Traditional publishers need to focus on the community that plays their games and embrace the fast food metaphor. Create content the community is hungry for. Give players a taste, for almost free, and let them season it to their hearts content. Consumers will know what they are buying in every bite, taste the value and be willing to spend more to complete the feast. The difference here is that the player will be in charge of what he buys and the publisher will continue to keep the buffet stocked with tasty content.
This model also helps you create a stronger bond with the playing community. They will be coming to you frequently and your brand will have more value.
Making great content is hard and those who own it should be compensated.
Those who aggregate it and find novel ways to bring it to the consumer have the opportunity to gain as well.
There are many innovations that can help direct consumers to great content. Old media companies just need to partner with innovators and or nurture innovation within their ranks.
The consumer will decide what she likes.
It is the job of the content publisher to find distribution methods that meet the needs of the content audience. Innovators will fill the gap if the Publisher fails to.
Old Media (Publishers) need to think of new distribution mechanisms as content. If I can better enjoy a Publisher's content with feature X then it adds value. Publishers need to be on bleeding edge or open their minds to those who are and mash-up resources so that everyone wins.
Partner with the innovators and together capture a larger audience.
I really think that they are missing a huge opportunity.
Sharing content is making folks feel important, expert even. Social games thrive on this peer based "leaderboard" status.
Gamify the way people experience the news. We can combine sharing the news, in any format, with proven games dynamics and incentives.
There are many ways to do this and make it so content is digital goods that players must have or sponsors provide for free. Make the sponsorship part of the experience and not just an extraneous banner.
Global Innovation Game (GiG) is enabling players to share content in the context of worldwide news events. It's the stock market for the global ideas economy. Check out GiG's market and see what your solutions are worth.
As long as there are bad guys there will be "good" guys trying to find them and "bad" guys trying to evade being found. The government really doesn't have enough money, time or resources to care too much about your personal details. Are you really that important? The biggest comedy of our ages was "Enemy of the State." It is not difficult to manage multiple social media accounts but they are just now getting around to doing this?! What kind of data are they really going to get with this approach. If they friend you what's the big deal? Why are you sharing personal details with strangers anyway? Let's get serious and spend some time having fun in Global Innovation Game (GiG)on Facebook (http://apps.facedbook.com/globalinnovationgame). You can share your ideas and see how they impact the world. I hope to lure thousands of "sock puppets" in and pick their collective Muppet brains on how to solve the real challenges our world faces.
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It?s not $.99: Blame Al Gore & McDonalds
Large video game publishers are complaining that they can?t compete with $.99. Of course they can. They just need to adjust their business model.
I am a 20 year veteran of the games industry and have witnessed much of the change being discussed first hand. I have worked as a video game publisher, developer, independent and now direct a social games company.
The "traditional" video game industry is very much like the movie business. Only the hits really make money and when they do it can often be a windfall. If you spend a lot to develop a game, of course, you need to sell a lot to make it profitable. When you are a "traditional" publisher, the expectation from your stake-holders is that you are targeting the top of the market. You became a top publisher because you successfully navigated the waters and were fortunate enough to come to the surface with a hit on a major console. Doing this many times over is expensive and risky. The risk has gotten extreme. It costs tens of millions of dollars just to market a top selling game today. Budgets for AAA console development today start at $30 million. Because of this games cost $60.
The truth is, the public expects "shiny" on consoles and it's less risky for a publisher to reheat and polish something old than start from scratch. So, in the ?closed? world of consoles, we see a lot of graphically rich copycats with little innovation and, as game players, we feel robbed of $60.
Something new has come to town. It?s fast, tasty and cheap. Consoles are online, have storage and can provide a shopping experience straight from the couch. Players are mobile, portable and always connected to a rich source of delicious content through the Internet ($.99 content ? impulse buyer?s content).
The online phenomenon is the true culprit, not $.99 apps. Traditional console publishers need to reinvent their business model if they want to stay relevant.
The digital goods (fast food) model offers the console publishers what they need but they haven?t fully opened their eyes to it yet. ?Modding? was an early example of how the industry started to create a business model that benefitted from reheating and seasoning what had been developed prior. Yes, this was a PC phenom, but consoles are now on the Internet.
In the mod business model you initially sell a core game experience. Then games with modifications ?mods? are released for purchase or free. The hitch is that players need to buy the original game to play the new mod.
If AAA publishers stop to analyze what they have, they are in a great position. The next generation of consoles will be connected to a high speed network, and with robust architectures for content distribution.
Give away the core game for $2, attract a broader audience and sell digital goods (upgraded features and compelling skins, stories, environments, characters, sounds, etc.). Players will easily spend $60 and more, but in smaller bites and the shelf life will be extended. Selling smaller pieces also gives you an understanding of what players are truly reacting to. It gives you plenty of room for innovation in marketing (E.g. time to play with pricing and limited runs on certain elements to add value).
Bottom line: Traditional publishers need to focus on the community that plays their games and embrace the fast food metaphor. Create content the community is hungry for. Give players a taste, for almost free, and let them season it to their hearts content. Consumers will know what they are buying in every bite, taste the value and be willing to spend more to complete the feast. The difference here is that the player will be in charge of what he buys and the publisher will continue to keep the buffet stocked with tasty content.
This model also helps you create a stronger bond with the playing community. They will be coming to you frequently and your brand will have more value.
Mash-up for Mega Profits
Making great content is hard and those who own it should be compensated.
Those who aggregate it and find novel ways to bring it to the consumer have the opportunity to gain as well.
There are many innovations that can help direct consumers to great content. Old media companies just need to partner with innovators and or nurture innovation within their ranks.
The consumer will decide what she likes.
It is the job of the content publisher to find distribution methods that meet the needs of the content audience. Innovators will fill the gap if the Publisher fails to.
Old Media (Publishers) need to think of new distribution mechanisms as content. If I can better enjoy a Publisher's content with feature X then it adds value. Publishers need to be on bleeding edge or open their minds to those who are and mash-up resources so that everyone wins.
Partner with the innovators and together capture a larger audience.
Social Games as News Aggregator
I really think that they are missing a huge opportunity.
Sharing content is making folks feel important, expert even. Social games thrive on this peer based "leaderboard" status.
Gamify the way people experience the news. We can combine sharing the news, in any format, with proven games dynamics and incentives.
There are many ways to do this and make it so content is digital goods that players must have or sponsors provide for free. Make the sponsorship part of the experience and not just an extraneous banner.
Global Innovation Game (GiG) is enabling players to share content in the context of worldwide news events. It's the stock market for the global ideas economy. Check out GiG's market and see what your solutions are worth.
http://apps.facebook.com/globalinnovationgame
Seriously Funny - Sock Puppets?!
As long as there are bad guys there will be "good" guys trying to find them and "bad" guys trying to evade being found. The government really doesn't have enough money, time or resources to care too much about your personal details. Are you really that important? The biggest comedy of our ages was "Enemy of the State." It is not difficult to manage multiple social media accounts but they are just now getting around to doing this?! What kind of data are they really going to get with this approach. If they friend you what's the big deal? Why are you sharing personal details with strangers anyway? Let's get serious and spend some time having fun in Global Innovation Game (GiG)on Facebook (http://apps.facedbook.com/globalinnovationgame). You can share your ideas and see how they impact the world. I hope to lure thousands of "sock puppets" in and pick their collective Muppet brains on how to solve the real challenges our world faces.