Game Marketing Tips, Analysis, and News


Thursday, January 19, 2017

E3's Slow Shrinkage Continues

Yep, that pretty much describes E3
As someone who attended the earliest Electronic Entertainment Expos (the E3 show) and continued to attend over many years, the slow shrinkage of the show has been apparent for years. The E3 show has been shrinking in many ways -- relevance, floor space, attendees, and importance. This last year saw two of E3's major exhibitors, Activision and Electronic Arts, abandon the show floor altogether. EA instead opted to produce EA Play, a show aimed at fans (not the professionals who attend E3) that took place at Club Nokia, the small expo facility located next to the LA Convention Center where E3 is held. This year, EA just announced that EA Play will again be held, but this time it's in Hollywood at the Palladium Theater, some seven miles away.

There's really not much reason to attend E3 any more. Most of the major events are livestreamed, and there will be extensive coverage on the show floor via Twitch and other streamers. The games being shown are often difficult to get in to see -- sometimes the lines can take hours to get through. Even with a press pass, some games are difficult to get hands-on time with. If you have face-to-face meetings with executives, that could be worthwhile -- but that time is hard to book, and the noisy environment often makes it difficult to conduct interviews.

Originally the intent of E3 was to show off the upcoming holiday product lines to retail buyers in order to book sales for the next several months. That was hugely important, because the holiday months represented the bulk of game sales and profits. Now, of course, things are much different. Retail sales account for less than half of console game revenue. Console games are no longer the largest segment of revenue in games -- that's been taken over by mobile games. Heck, even PC games are getting close to topping console game revenues, and PC games aren't even sold in stores any more.

The E3 show once occupied the entire LA Convention Center, including the downstairs Kentia Hall. That enormous space is no longer used. The two main exhibit spaces are no longer jampacked with booths -- in fact, there's plenty of open spaces, with large areas devoted to lounges (chairs and tables), non-profit exhibits (of old games), or just bare concrete with some tables for the thinly used food concessions selling highly overpriced convention food. (Nowadays, anyone who can visits the food trucks parked across the street, which offer a variety of tasty cuisine at prices lower than the convention center's tired menus.)

The fact that big companies like Activision see no point in spending millions to put on a big E3 show should tell you just how important the show is these days. You should expect even more defections from the show this year, until at some point the whole thing shrinks into a smaller space or a very different event.

The reality is that publishers like EA and others realize it's far more important to connect directly with consumers than to connect with retailers or journalists. Besides, in an increasingly more platform-agnostic market, brands are more important than promoting a specific hardware platform. You'll see that Sony and Microsoft will still have plenty of reasons to show hardware, of course -- that's still a strong seller at retail.

As for me, I plan once again to take in E3 remotely and avoid the traffic and the crowds. It will be interesting to see what Sony, Microsoft, and Nintendo will show off, but going hands-on can wait for a less frenetic venue.

Tuesday, January 17, 2017

Nintendo Switch: Off or On?

Nintendo's Switch is little more than a month away from launch, and the early reviews are decidedly mixed. Some of the games look great, but the high costs and limited support don't look so good. My assessment is that Nintendo's Switch is headed for a Wii U-scale disaster if it keeps to its current course -- but it's possible Nintendo could turn things around with the right moves. They've done it before with the 3DS, which if not a success on the scale of the DS at least can be counted as reasonably successful.

Let's look at the pros and cons of the Nintendo Switch, as we know them so far.

Nintendo Switch Pros

  • Good-looking, reasonable size screen (720p, 6.2")
  • Zelda: Breath of the Wild is a strong launch title
  • Flexible play options (home, handheld, tabletop)
  • (Probably) Easier to develop for than previous Nintendo systems (because it's likely based on Android)
  • Good variety of input options for developers (detachable controllers with motion and gyroscopic sensors, IR vision, multi-touch screen, lots of input buttons, two analog sticks)
  • Some future software looks exciting (Mario Kart 8, Splatoon 2, Super Mario Odyssey)
Nintendo Switch Cons
  • High price ($299 with no game included)
  • Limited system memory (only 32 GB before OS takes out a chunk)
  • Games will mostly be cartridges (otherwise you have to buy MicroSD card storage, which is not cheap)
  • Limited launch software (5 titles, only one major one, two ports, two very weak games)
  • Limited 2017 lineup (Only 23 titles for this year, most are ports of older software, only 3 or 4 look great)
  • There will be no Switch versions of the latest games from top third-party publishers (the system is too different, and not powerful enough to handle Xbox One/PS4 games)
  • High software prices ($60 for top games, $50 for a throw-away like 1-2 Switch)
  • Limited 3rd-party support (All titles from major publishers are simple ports of old titles)
  • Joy-Cons are very tiny and buttons are difficult to reach even for average-size hands
  • High prices for accessories ($79.99 for a pair of Joy-Con tiny controllers; $70 for Pro controller; $90 for a dock; $49.99 for a single Joy-Con)
  • Online service will cost starting in the fall; some features through a smartphone; one free game a month, which is either an NES or SNES game that you can only play for one month)
  • Not competitive with other home consoles in power, price, or software
  • Not competitive with smartphones or tablets in power, price, or software
  • Little pre-marketing (there's been no long campaign to drive awareness or purchase intent)
  • Confused marketing (videos so far targeted at Millennials, but kids are entirely left out -- though the colorful games are classic Nintendo that should appeal most strongly to kids)
When you look at the list and think about what those pros and cons mean, you get the idea that Nintendo fans will buy a Switch right away, but after those folks (a few million, perhaps) buy a Switch, it will be tough to convince other to do so when they look at other options.

Essentially, the Switch is a fairly expensive handheld console that can display games on a TV, though its horsepower is nowhere near comparable to Xbox One or PS4 (let alone PS4 Pro or Scorpio). The console is up-gunned when it slots into the dock, but that just means more work for developers who essentially have to create and test two versions of every title (see tech analysis here). The whole thing is shaping up to be a debacle a lot like the Xbox One launch or the Wii U launch.

If Nintendo keeps going the way it is, I think the Switch will look a lot like the Wii U or the 3DS initially. As always, when Nintendo announces a new console there's plenty of enthusiasm among the hardcore (and journalists, who are mostly Nintendo fans). The first month in sales will look great, as it always does. Then the product will meet reality, and sales will plummet a month or three after launch.

It's at this point that Nintendo could decide to make some changes, the way it did with the 3DS. If you'll recall, the 3DS did well for a while, but then it became obvious the device wasn't selling. Nintendo dropped the price an unprecedented amount (from $250 to $180), which rescued the 3DS (along with marketing shifts that de-emphasized the 3D display, which almost everyone turned off).

What could Nintendo do to rescue the Switch? One suggestion has been to release a version without the home-console items -- the dock, the grip, the straps. That could drop the price to $199 for the purely mobile version. Pack in the 1-2 Switch game instead of trying to get $50 for it. I would also get Niantic to create a version of Pokemon GO for the Switch, and include that as well. Focus the marketing around the mobile and tabletop play. Then you'd have a much better value proposition.

Of course, that would likely mean either dropping the 3DS line entirely, or reducing the price on that substantially so it would no longer be in direct competition. A 3DS XL should be $149, or perhaps $129, to really look good against the Switch. That could also help substantially boost 3DS software sales, which would be a nice profit boost.

Will Nintendo actually make such a gutsy move? They have done it before with the 3DS (well, the price cut part, at least). I doubt they will, though. The company is to wedded to the idea of selling hardware. So if Nintendo does make a move to rescue the Switch, it will likely be too little, too late. The Switch will limp along, selling a few million units a year. Then Nintendo has to hope it will finally figure out how to price mobile games and make some money from that. The fact that Niantic made $950 million in six months, with a very fat profit margin (likely in the 50% range even after licensing fees) doesn't seem to have gotten through to Nintendo.

Seriously, Nintendo's got iconic brands and characters that can be worth billions, if they put them on widely accessible hardware. Which Nintendo's proprietary hardware will never again be, not in today's world. Someday, Nintendo will figure out they should primarily be a software company, but they'll have to lose billions before they even have a chance of grasping that, it seems.

Friday, January 13, 2017

Nintendo's Switch: Will it Succeed or Fail?

Nintendo revealed more details about the Switch recently, and it's an interesting risk for Nintendo. The launch of a new console these days is anything but a guarantee of success (just look at the Wii U, the worst-selling console in Nintendo's history). There are some strong points to the Switch, but there are far more weaknesses or question marks. Will the Switch succeed for Nintendo, or become another failure like the Wii U? Let's look at the situation.

First, the hardware. It's $299 to get the console, the dock (for connecting to your TV), two controllers (called "Joy-Cons", tiny controllers with an analog joystick and four buttons the size of the original NES controller that slide onto the sides of the console, or can be used separately, or used by two people, or slotted into a Grip to make it like an Xbox or PlayStation controller), two straps for the controllers, a charger (using USB-C), and an HDMI cable. There is no game included.

Basically, the Switch is a 6.2 inch tablet with a 1280x720 (720p) multi-touch screen, running off an Nvidia Tegra chip (which means it's probably a modified version of Android OS underneath Nintendo's interface), where you can attach small controllers to the sides. You can also dock it and connect it to a TV, where it boosts the resolution to 1080p (though Zelda: Breath of the Wind runs at 900p). Or you can set in on a table, propped up with its built-in kickstand, and share the controllers to play a multiplayer game. As a handheld device, the battery life is about 2.5 hours to 6 hours depending on the game (the joycons last for about 20 hours); with Zelda, you get about 3 hours of play.

Software: There are only two launch titles from Nintendo: Zelda: Breath of the Wind (a Zelda open-world game) and 1-2 Switch, a very simple set of minigames using the joycons (like milking a cow or a quickdraw game, for instance). Other launch titles are Just Dance from Ubisoft (of course) and a Skylanders game from Activision. Some 80+ titles are in development according to Nintendo, but major ones like Splatoon 2 won't hit until summer, and Super Mario Odyssey won't be out until the holidays (a grand Mario game in the tradition of Super Mario Sunshine and Super Mario 64, from the brief video that was shown). Most software will be $60, though some like 1-2 Switch may be only $50.

One other important note: Nintendo will have an online service that you will need to use in order to play games with other people online. It will be free until the fall (as a trial run), when it will become a paid service (no price point announced). The service will give you access to some old Nintendo games every month, but you will only be able to play them for that month – then they go away. Unless, presumably, you want to buy them (just like you've repurchased other Nintendo games over time).

Interestingly, Nintendo's videos are centered on adults in their 20s and 30s... and some that look even older. Kids are almost nowhere to be found. (Probably because the kids were all too busy playing Minecraft or iPhone games.)

Here's what Nintendo hasn't talked about: Graphics power. No doubt because the Switch is probably somewhat less powerful than an Xbox One or a PS4, probably more like an Xbox 360 or a PS3. Certainly it doesn't compare to the latest iPhones or Android devices in terms of screen resolutions or graphics power, either. So Nintendo is wisely choosing to avoid talking about all that.

The graphics power does matter, though, when it comes to getting third-party publishers to create games for the device. The third-party lineup Nintendo announced was really quite lame – ports of old games like Skyrim or FIFA or Skylanders, or bringing back old icons like Sonic or Bomberman. What you will not see on the Switch are the big AAA titles that are the latest from the top publishers – because that would require a whole lot of work and expense for an unknown payback. No Battlefield or Call of Duty or Grand Theft Auto or Assassin's Creed, or any of the upcoming games from top publishers. Maybe someday, if the Switch were to sell 100 million units, but even then those top titles would arrive on the Switch a year after launch on other consoles, simply because of the massive effort required to port them.

So in the end, as a Switch buyer you will be left with Nintendo's titles and a number of second-string titles, mostly from small Japanese publishers. And it already seems clear that Nintendo will not be able to push out its very best titles very quickly – probably one a quarter if we're lucky. And unlike previous Nintendo handheld consoles, games will not be cheap. $60 this time, noth the $40 from the 3DS days.

Can the Switch succeed? Maybe, but it seems unlikely. Sure, Nintendo will sell several million in the first month or two (if they can make that many) to all of the diehard Nintendo fans out there. Beyond those people, it's going to be an uphill fight to sell this console. If you look at the Switch as primarily a home console, it will be more expensive than its competition (Xbox One S and PS4 Slim can be found for $250, with a game or two included) and far less powerful... and with a far smaller library of software, not just now but forever.

If you consider the Switch as a portable gaming device, it's not a very good deal compared to your smartphone or tablet. Poor battery life and screen, nice controllers, middling graphics power, and insanely expensive games compared to what you can find on tablets or smartphones. As a tabletop gaming device... it may get used that way occasionally, but likely no one will buy a Switch with the primary intent of playing it on a table.

While the Switch may beat the Wii U in sales, I don't think it will be an enormous success – nowhere near the 100 million units of the Wii. In the end, I don't think people want to carry around another portable device, especially one that cannot fit in your pocket. Everyone will always take their phone along, but the Switch will be a distant second choice. The $299 price point is going to be a difficult sell against the Xbox One S and PlayStation 4, especially once you start to look at the software libraries and other entertainment features.


The Switch will be a second console purchase for some, particularly Nintendo fans who will line up to buy it. After the first 5 million units are sold, it's going to be tough for Nintendo. Could the Switch succeed? Yes, especially if you define success as "selling 20 million units in two or three years." Beyond that, the Switch will have a difficult time, and it's not going to be the kind of profit engine Nintendo really needs to return to its gloriously profitable days of the Wii.

Tuesday, November 22, 2016

Nintendo's Switch: Will the Market Take the Bait?


Now we know a little bit more about Nintendo's new console, but really very little – especially when we're only a few months away from the release date. We know it's called the Switch, it's capable of playing as a portable and hooked up to your TV, it uses an Nvidia Tegra chip, and it's going to be released in March 2017. Officially, the only game we know that will be on the Switch from Nintendo is Zelda: Breath of the Wild. Most of what we know comes from this video that Nintendo released a while ago.

There's a lot of excitement over a new console from Nintendo, and fans are already salivating. We know there are a few million hardcore Nintendo fans who will buy pretty much anything the company releases, no matter what issues it may have. The real question here is can Nintendo find a massive audience for this new console – like the 100 million who bought the Wii – or at least one on the scale of the Xbox One (25 million or so so far) or the PlayStation 4 (45 million or so so far)? Or are we looking at another failure of Wii U proportions, with lifetime sales of 13 million to make it Nintendo's worst console ever?

My best guess at this point is that the Nintendo Switch will end up far closer to the Wii U in sales than it will to the Wii's sales. Why am I skeptical? Several reasons, including the software, Nintendo's continuing difficulty in appealing to modern gamers, the overall value of the system – and the fact that it's essentially a mobile device. Let's deal with each one of these reasons, in reverse order.

How Many Pockets Do You Have?
I think Nintendo has made a fundamental error here in trying to make its home console more successful by blending it with their more successful handheld consoles. What they failed to understand is that their handheld lines have already been on a downward slope – the 3DS line is selling in far smaller numbers than the DS line. Why? Smartphones, of course. You can now play terrific games on your smartphone, and nearly everyone who would be part of the target audience for the Switch already has a smartphone. You're always going to take your smartphone with you wherever you go. Would you take a Switch? Sometimes. The bigger question is, why would you even buy a Switch in the first place when you have a better game playing device in your pocket already?

Top-end smartphones will be better than the Switch. They have better screens, more RAM (doubtless), and a better CPU/GPU than a Tegra. If not now, then they certainly will in the next yearly update cycle. You can already put your smartphone games up on your TV (via Chromecast or Airplay). And now you're going to get Nintendo characters on your smartphone... so is a Switch really worth hundreds of dollars to play a few different games? No, I don't think it will be for most people.

What's the Value of a Switch?
It's hard to say until Nintendo announces the price, but you have to figure if the price was going to be low they would have announced this early. Delaying the price announcement means a chance to build up more anticipation, and perhaps less resistance if the price is high. Expect a minimum of $249, and $299 would not be a big surprise. Since it's Nintendo, even higher is possible – they really hate to lose money on every sale. Say the Switch is $299 – which is the same as the basic price for the Xbox One and the PS4. The Switch will certainly be less powerful than either of those consoles, but it will be portable. Is that really enough to sell the Switch?

The overall value of the console has to include what software is available. There will certainly be some Nintendo exclusives, but we don't know how many, how often we'll see them, or how good they are. As for software that you see on other consoles, that's unlikely except for one or two experiments. The Switch is going to be a non-trivial port for games from other consoles. It's likely the Switch will never have most of the popular console games that appear on Xbox One or PS4, so if you're interested in those the Switch becomes a second console to buy. That's a tougher sell, and gives it less value.

Nintendo Doesn't Do Internet Well
One of Nintendo's biggest problems in appealing to a modern gaming audience is that they still don't understand the Internet, multiplayer online gaming, and related issues. There's no reason to believe they'll have this any more figured out with the Switch. Maybe we'll see Friend Codes. Even if we don't see those again, there's not likely to be any great online multiplayer games for the Switch – and those are some of the very most popular games.

The Lack of Compelling Switch Software
Wait, you cry, Nintendo has already announced Zelda: Breath of the Wild for the Switch, and it looks great! True, except now rumor has it that the game may not be ready at launch, but perhaps months after that. While we saw things that looked like Skyrim and NBA 2K17 in the Switch video, Bethesda and TakeTwo have refused to confirm they are releasing those titles (or any titles!) for the Switch. This does not induce confidence in the software lineup.

Ideally Nintendo would be releasing major titles (using the best Nintendo characters) for the Switch every couple of months. If they were going to, they'd have already announced that. Nintendo has struggled for years with getting major new software out for HD screens, with constant delays. It's great that they want to release excellent software, but on a corporate level they don't seem to be able to figure out how to do that on a regular schedule. Other major game publishers have mostly figured this out, but Nintendo seems to be incapable of doing that – and honestly, most of the big titles from other publishers are significantly more complex than most of Nintendo's games.

The Switch is going to be ARM-based (using a Tegra CPU), so it's essentially going to be running an Android variation I'd expect. Which means porting from mobile titles should be easy – if Nintendo allows it. Though then you'd just have a title you can already get on a mobile device you already own (your smartphone), so this wouldn't seem to provide much of an incentive to buy the hardware.

Summary
It's true we haven't seen the hardware specs, the software lineup, or the price for the Switch yet. I submit, though, that while those will all be interesting, none of them are sufficient to guarantee the Switch sells in big numbers. Honestly, you'd think if any of those three things were really impressive, Nintendo would have been touting them for months, instead of waiting until the very last minute to make them public.

Perhaps Nintendo has finally figured out that mobile is the future for them, but they were so far along this hardware path they had to continue. Or maybe they really figure the Switch has a chance to generate Wii-like sales. That ship has sailed, though. With literally billions of good gameplaying devices in the hands of people around the world, there's no way to create a hardware market that's even a fraction of that size. With Pokemon GO, we've seen where even a pretty limited title (the game initially didn't have much to it), we could see 500 million downloads and over $600 million in revenue in a couple of months. That shows the power of great IP on the right platform with the right monetization – and it's not even as great a game as it could be (though it's becoming better).


Someday, perhaps, Nintendo will be able to realize its potential on mobile platforms. The Switch, though, just isn't going to be it. Even if the Switch is a huge hit, selling 50 million units in a couple of years, that hardware and all of its software wouldn't generate as much profit as Pokemon GO will in one year. That's the real switch Nintendo should be making – the switch to creating mobile games.

Tuesday, November 15, 2016

Super Mario Run Pricing Set: Will It Fly?

Nintendo has finally announced when its highly anticipated iOS game Super Mario Run will ship: December 15. And while the game will let you play for free, that apparently only applies to a limited part of the game (though you will be able to check out all three game modes, apparently). You can unlock the entire game for the princely sum of $9.99.

Wow.

Now, if there's any company whose brands could command a high premium price for a mobile game, it would be Nintendo. But $10 for an endless runner game? That seems like a big ask, when there are plenty of free runners out there. Sure, it's a big discount from a 3DS game at $30, but that's not the point of comparison that most mobile gamers will be making. They'll be looking at free games, or maybe something like Minecraft Pocket Edition at $5.99 -- which seems like it packs in far more value than an endless runner, no matter the IP doing the running.

 Of course, we don't actually know how much content there is that you'll get for your $10, nor how many hours of play you'd expect to get. Perhaps the game is a really good value at $10, delivering dozens of hours of game play. That seems unlikely, though, given the genre. It's not like it's a deep strategy game, or an RPG, or even a sophisticated platformer. What we saw demoed looked pretty simple, and not enough to justify the price.

Perhaps Nintendo can indeed command that price, and sell millions of units at $10. That would be great for the industry -- with Nintendo leading the way, we could make premium mobile games a real thing and not just a fluke. Let's hope that is what occurs.

I'm doubtful, though, because I think mobile gamers are less concerned about the brand and more about value. I think Nintendo will easily get millions of downloads, but getting people to drop $10 will be much, much harder. I don't think the problem is $10 per se, though there are few apps of any kind that demand that. It's a value question -- do you really get your money's worth? More than 20 million people have paid for Minecraft Pocket Edition at $5.99, so it can be done. But compare what you get for $6 to what Nintendo is offering for $10, and I don't think Nintendo compares very well.

Now, one of the many great advantages of digital distribution is that price changes are easy. Nintendo could (and should!) experiment with its price point to find the optimum level -- the point at which Nintendo maximizes its revenue for Super Mario Run. (In other words, selling 100,000 units at $10 each is not as good as selling 20 million units at $1 each.) That optimum level may be $10, or it may be $1, or $5. Only testing would reveal that. That said, I'm doubtful Nintendo will actually test various prices, because that's something they are not used to at all. I'd like to be pleasantly surprised, though.

While the upside for the $9.99 price is that it may help others in the mobile game business charge more for premium games, there's also a possible downside: Nintendo could create a great deal of ill will towards themselves and their brands if the value isn't there. The company's first mobile "game" Miitomo was a pretty clear failure, though it really wasn't a game per se (another mistake -- why should a game company release something that isn't a game, especially as their first foray into mobile games?). Nintendo might be hurting their future titles like Animal Crossing and Fire Emblem (both announced for mobile, coming sometime next year) if Super Mario Run is a big disappointment.

We'll see. I think Nintendo is trying to create mobile games that are very different from its handheld console games, to avoid cutting into those sales. That's a remarkably shortsighted idea, though. Here's a simple piece of data that should convince you why that is: Pokemon GO has been downloaded or 500 million times. That's an order of magnitude more than any Pokemon game, ever, and more than all of them combined by several times. So why in hell wouldn't Nintendo give up low-margin hardware and just make killer mobile games (with a very high margin)  that can attract an audience at least ten times larger than any they've ever had?

OK, hedge your bets a bit and do one or two mobile games first to demonstrate you can actually do that well before you give up on hardware. I can see that. But Nintendo's Switch is never going to sell more than a tiny fraction of the number of smartphones out there, and therefore any Switch game will be microscopic in sales compared to a good mobile game. There are no multiple mobile games that generate over a billion dollars a year in revenue with a profit margin greater than 50%. No Nintendo game has ever generated that sort of profit, and few indeed have ever created that kind of revenue.

It's going to be a very interesting product launch to watch, and come January we should have some idea of how successful it is.

Sunday, October 30, 2016

The Death of Game Reviews


While there's no attending physician, and no generally accepted criteria for a cultural phenomenon subsiding into irrelevance, I think we can call it here and now: Game Reviews are dead, at least in terms of cultural influence. Bethesda Softworks' decision this week to stop providing advance copies of games to reviewers signals that reviews, long diminishing in effect, have crossed over into complete uselessness. Or, at least game reviews in the classic sense of being written by professional reviewers for professional web sites or magazines.

Here's what Bethesda said in their press release:

"At Bethesda, we value media reviews. We read them. We watch them. We try to learn from them when they offer critique. And we understand their value to our players.

Earlier this year we released DOOM. We sent review copies to arrive the day before launch, which led to speculation about the quality of the game. Since then DOOM has emerged as a critical and commercial hit, and is now one of the highest-rated shooters of the past few years.

With the upcoming launches of Skyrim Special Edition and Dishonored 2, we will continue our policy of sending media review copies one day before release. While we will continue to work with media, streamers, and YouTubers to support their coverage – both before and after release – we want everyone, including those in the media, to experience our games at the same time.

We also understand that some of you want to read reviews before you make your decision, and if that’s the case we encourage you to wait for your favorite reviewers to share their thoughts."

What's happened to professional game reviews is the rise of social media, the growth of reviews in online stores, the increasing popularity of public betas, and overwhelmingly the huge influence that livestreamers and YouTubers wield. People don't look to professional game reviews to make their buying decisions – they ask their friends, they look at what people have said online, and most of all they look for YouTube videos or a livestream where they can see the actual gameplay and listen to someon's commentary about the game.

Even though reviews don't seem to affect sales so much any more, why would Bethesda stop providing advance copies of games for review? It's very simple: Pre-orders. Bad reviews could hurt pre-orders. Heck, some game writers are even calling for people to stop pre-ordering, because it encourages bad games. While that may or may not be true, what is true is that once you've purchased a console game, you're not really able to get your money back unless you return it unopened. Which is why we see pre-order bonuses becoming more popular – publishers want to lock in your purchase by offering some goodies you can't get if you wait until the game comes out. Or until reviewers have had a chance to tell you if the game is any good or not.

Yes, that's the way the business has worked for decades. True, if a publisher ships a bad game there's going to be some blow back – reduced sales on the next title, perhaps. But it's usually not very substantial compared to all of those lovely sales that aren't refundable. And as game budgets rise, risk rises too – giving publishers even more reason to want to lock in your dollars before you even have a chance to know if you like the game or not.

Part of the reason free-to-play games have done so well is that they turn this model on its head. You don't pay anything unless you've found the game worth playing, and want to get more out of the game by spending some money. Now, the problem for developers is that all too often there aren't enough paying players to make the game profitable.

Ultimately the problem gets resolved, as good quality games rise to profitability and low-quality ones can kill off a franchise or even a developer. Players now have plenty of fine gaming choices all around, and if they really feel they are getting a raw deal by pre-ordering they'll stop.


Still, the professional game review matters very little these days – unless you can deliver it engagingly during a livestream or in a cleverly crafted video. It's bad news for traditional game reviews, but good news for streamers and YouTubers.  

Thursday, September 22, 2016

Value Is The Key to In-App Purchases

Many games are free-to-play these days -- the majority of mobile titles are F2P, some of the leading PC games are F2P, and now even some console games. Usually, that means the games monetize through in-app purchasing (the sale of virtual goods or services inside of the game, usually abbreviated IAP) or advertising. Surveys show that many gamers feel in-app purchases detract from their enjoyment of the game -- according to an Ipsos survey, 47% of UK gamers feel that way. Why? And is this a problem that game designers need to tackle, or game marketers?

It's useful to take a look at some examples of games with in-app purchases that are doing very well, like League of Legends, World of Tanks, Clash of Clans, and others. Those games don't have a problem with players; their players seem pretty happy to have the opportunity to purchase things for the game. (The image of DJ Sona above from League of Legends is an example of an extremely popular in-app purchase.) Those who don't buy in-app purchases enjoy playing the game, or at least don't seem put off by the fact that you can buy things in the game. At least, we can infer that from the tens of millions of people playing these games on a regular basis.

What is it about some games that makes IAP annoying, and tolerable or even appreciated in other games? There are two factors, I believe. One is the game design: Games that annoy you with purchase requests (intruding during the game play), games that require purchases to speed up play (time-gating), games that let you buy your way to victory (though this depends on the culture, as its a desirable thing in China), those types of game design make IAP into something annoying. The other factor is value: Games that offer a good value in IAP don't annoy the players.

The important part of this value determination is that what constitutes value comes from the player's point of view, not the designer or marketer's idea. The fact that you can buy 100 game tokens for only $7 instead of $20 doesn't mean it's a good value to the player. Sure, maybe it's a deal compared to is usually charged for game tokens, but that may not connect directly to value in the mind of the player. What can you get for those game tokens? Are they readily usable for things that players definitely find useful or enjoyable? The determination of value comes from using a player's point of view to look at things.

You may not really know what is valuable to players at the outset of the game design, but game testing should reveal that if you ask the right questions. You could even run some tests with different groups of players to see what they like, and what they think is a good deal for an in-app purchase. Sure, start with some assumptions, but test them out and verify them. You can also test the effectiveness of different price points, too.

The ideal F2P game lets you have fun with the free version, for as much time as you like. Then it allows you to pay something to increase your enjoyment, but in a way that doesn't leave you feeling annoyed if you don't buy it. Doing this well requires both good game design and good marketing input.