E-Book Weakness Uncovered

While the publishing industry is swept towards the e-book future, willing or not, there are some unforeseen problems with the format. One of them is detailed in this article in the New York Times, which talks about how covers have traditionally been a major selling point for books (at least, for some genres... romance novels, anyone?). Covers have also been seen as advertising; if you notice someone reading the book, you might notice the cover and then look for the book yourself. Sadly, e-books have no covers that can be seen by passersby while you are reading the e-book -- at least, not until e-book readers come with outside screens to display advertising (don't hold your breath).

While I'm sure some sales are lost, particularly in genres that sell heavily based on their covers, it's important to note there are also savings realized by not paying for a complete cover design package (which may include an expensive piece of art or a photo shoot, which can run thousands of dollars). Now the modern version of such incidental sales will be driven by social media and such things as Amazon's recommendation engine or lists posted by users. This is, of course, annoying to publishers who are used to be in control of all of the messaging.

Ultimately, it means that book sales may be somewhat more related to the book's actual quality rather than how sexy Fabio looked in that cover painting. Good news for good authors, and of course the obverse may be true.

Digital Game Distribution Expands

Looks like Amazon has decided to join the digital distribution party for games, as one analyst deduces from looking at the job postings on their site. Amazon has had success with other digital media, notably e-books and music, so this is not entirely new to them. It will be interesting to see how they implement it.

Looks like Steam will have some well-heeled and experienced competition to deal with in the future. This should benefit consumers, as you can bet  we'll see more efforts to appeal to customers from all digital distributors. It's not just price; look for exclusive deals and more creative offerings. The interface is one area where we're likely to see changes. Amazon's secret weapons in this battle are its recommendation engine ("other games you might like") and the user comments. I don't know about you, but when I'm looking into a serious purchase I always take a look at Amazon's comments. You'll learn a lot about a product's pros and cons that way.

All this activity in digital distribution is another sign of how rapidly the market is growing; Amazon wouldn't jump in if it wasn't a big enough market. Not the best of news for Gamestop...

Put Your Marketing To The Test

I have looked at many package comps over the years, and I always have to remind myself to look at the package several different ways. Usually you pick it up and hold it in your hand and look at it; hopefully you can read the title clearly, and it's obvious what the product is and who it's for (all too often there's something lacking in one of those areas). The next way to look at the package is to put it on your head, and say to someone standing six feet away "What am I?" If they can't tell by look at the side of the package what it's supposed to be, then some work needs to be done. A final test is to put the package comp face out on a shelf, and stand 10 feet away and see if you can figure out what it is. If the title is a blur, you'd better fix it.

The point is that packages have to work in a retail environment, where they are usually spine out... and even when face out, most people will only see them from 10 feet away or more. So the package needs to attract and inform people from that distance.

The larger lesson is to make sure you test out your marketing message in the environment where it will be encountered... at the distances and under the conditions likely at that time. (The ultimate test for your package comp, of course, is to bring it into some retail stores and put it on the shelves, then see how it looks.) Magazine ads? test them to see how they work when just flipping through the magazine quickly. Product pages on a web site? See if it's clear at glance what the product is and who it's for... and there's some hook to keep the viewer interested in reading further (visual, textual, something!).

Video As Marketing Tool

Video used to mean "TV commercials" in the early days of video games. The only way to distribute video was broadcasting. Once VCRs became commnplace, video became an occasional way to show game play or to make a pitch for a game... sometimes even part of the game components. As consoles and computers got more powerful, video became part of the game introduction, usually as computer graphics. As the internet became ubiquitous, video could be found for downloading... but only from companies that could afford the hosting and bandwidth costs of such huge files. Youtube has changed all that. Now it's possible to create videos and distribute them online without worrying about bandwidth or hosting fees.

The cost of creating videos has also dropped, as hi-def cameras and sophisticated editing software now cost mere hundreds of dollars. CGI has become high quality with a low cost to produce. There should no longer be a barrier to creating good quality video as long as you're willing to spend the time and a certain amount of money.

Then the question becomes: What do you do with the video? Game play videos have become popular, as they are a useful way to show the game experience. (This is true not only for videogames, but for board games, card games, roleplaying games, mobile games.... a short video can convey the experience, especially a multiplayer experience, more quickly and easily than a demo.) Testimonials from actual users, if brief, can be effective. An outright hard sell is probably not going to get you a lot of page views... if you want many people to see the video, try humor or create a stunning visual.

In short, put the same sort of creativity into creating your video that you do to creating your game. And think about video as a makreting tool; it's available for nearly any size publisher now.

Nintendo Makes a Mistake

Managing a PR campaign, especially for an international product at a well-known company, can be a complicated thing that requires a lot of skill to pull off well. There are some basic principles, though, that even a novice should be aware of. Like this one: Thou shalt not stomp on your own message.

Well, Nintendo blew right past that one this week. Here they are, one week away from the launch of the DSi XL in the USA, busily sending out media kits and trying to amp up the press (and the public) about their new device (albeit in an oddly clumsy way, as this blog detailed last week)... when they announce an even newer, better DSi... tentatively called the 3Ds.

Yes, this technique, called the Osborne Effect, was demonstrated so well by the Osborne Computer company long ago... announce a better, spiffier version of the current computer you're selling, only this new one won't be out for 6 months. Then watch sales dry up as everyone saves their money for the new machine... so much so your company goes out of business.

Now, this won't happen to Nintendo, but I can hardly think of a better way to reduce sales of your new device than to announce, the week your new device is being released, that you have an even better version coming out at some unspecified point in the future... more details to be announced later.

Way to go, Nintendo. You must be so worried about the threat of the iPhone and iPad that you are frantically releasing info on products still in development, just to try and deflect attention away from Apple. Either that, or somebody at corporate HQ has made a very bad mistake. Time for a pinky sacrifice, I think.

Targeting Your Marketing

One thing that's often overlooked when marketing a game is the need to focus your marketing. It's very easy to see a game (especially one you've created) as appealing to a wide variety of customers. Why, sure, teens would love this game! The whole family can play it! And it's educational... maybe teachers will want to use it. Certainly kids as young as 8 can play... and grandma will enjoy it, too. Perhaps that's all perfectly true, but it all gets in the way of effective marketing.

For one thing, a message designed to appeal to teens (with the sort of language, graphics, sound and style) is not likely to appeal to seniors. In fact, just the visual style of such  marketing would be enough to cause seniors to turn away and not even look at the marketing. The same is true of a marketing piece aimed at seniors. While your marketing may appear in a setting frequented by both groups, you need to pick one and target them. Forget about the other group.

What? Give up potential sales? No, not at all. If you really think your game has serious senior appeal, craft a different marketing campaign for them, and use channels where seniors will be likely to run across that message. In an extreme case, you may even want to retitle your game and change the game graphics to appeal to a different demographic.

I am reminded of an old Strategic Simulations game, Dragon Strike, which was a dragon-riding simulator (read more about it here; video here). They thought it would appeal to flight-simulator fans and D&D players, so they tried to get both of those audiences to buy the game... with the same marketing. You probably see the ending already: Neither group bought the game, and it flopped. Flight-sim fans had no interest in dragons, and no belief that a sim with a dragon could have any resemblance to the kind of gameplay they liked. D&D fans had no interest in flight sims... and there was no connection to their characters or the stories they were interested in. So neither group bought the game... the marketing went directly between those two audiences (though I suppose it might have appealed to fans who liked both types of games... too bad there didn't seem to be any significant number of those).

Trade Show To-Dos

Here's a good list by a veteran trade-show person about how to execute the logistics of a trade show effectively.

Some key things to remember:

RTFM: Loosely translated as "Read The Fine Manual", it's important to read all of the trade show materials thoroughly. And then don't hesitate to ask questions if you're not sure you understand something. You really don't want to spend a lot of time, effort and money on a show booth that you won't be allowed to set up because it's a little too tall or has non-approved colors or something. You may have a clever idea that isn't covered exactly by the rules... better make sure you get a ruling before you commit to doing it.


List services you require: Think about what you will have to rent or buy or use during the show, and make a list. Electricity? Phone lines? Padding under the carpet? Shipping and setting up your booth? Think through the whole process ahead of time... if possible, set up your display beforehand and practice what you will have to do. This will alert you to all of the little things you'll need to bring with you... or rent... or hire.

Understanding the show floor plan and drayage requirements. Before you pick your booth spot, think about the placement of the booth and what's in neighboring areas. Hopefully you have some idea what the large booths look like, or what kind of traffic they might draw. Sometimes being next to a large booth may be bad for your traffic, if you're on the back of it... or where crowds might make it impossible for passersby to see your booth. Drayage? That's the art of moving stuff into the booth, which often requires professional help that must be hired from the show. You may be able to carry things in yourself, but usually under strict limitations (for instance, no hand-trucks). Prepare to bring materials accordingly, and try not to make last-minute changes.

The bigger the show, the bigger the preparation should be. Shows are usually expensive, so you really want to make every dollar count as effectively as possible.

Google TV Ads

This is an interesting service for marketers:

Thanks to the march of technology, you can now put together your own TV advertising campaign and get your ad seen on major networks... all without the need for an advertising agency. Google has made it easy for you, if you care to risk the money. This is an amazing capacity to have, but of course it's going to require some skill and thought to take proper advantage of it.

First, you need to decide if the demographics of the TV audience are a good match for the demographics of your product or service. Research this first; the networks are usually happy to give out demographic information on their viewers, and you should have a pretty good idea of your potential user base... right? Second, you'll need a good TV ad. This will require skill and effort to put together, and it may well cost you thousands of dollars to get the necessary talent and equipment. (Don't be discouraged; TV ads usually cost hundreds of thousands or even millions of dollars to produce, so if you can do it on the cheap, that's a big win.) Third, you'll want to track the results, so make sure to direct the ad viewers to a unique web site (or landing page) so that you know precisely how many people you snagged. And then measure how many actually clicked through and bought something. Ideally, you'll bring in enough new business to pay for the ad production and the ad buy, and hopefully a good bit more. The beauty of this program is that you can constrain your ad buy to a minimal level (hundreds of dollars) until you're sure it works. If it doesn't work, you're only out the cost of making the video, and hopefully the video can be used on your web site and in other ways. It's an inexpensive way to test out an awesome marketing tool.

App Futures

The App Market looks to keep expanding at a breakneck pace, at least according to this study, and should reach a $17.5 billion dollar market by 2012. That's a lot of Apps... considering 7 billion were downloaded in 2009, this study projects downloads of 50 billion by 2012. I wouldn't be surprised if that ends up being conservative, as I expect the iPad and its competitors to gain considerable market share. Also of note is the "App-ization" of computer software.... Google has started an App Store for online PC Apps. Simplification and ease of installation/ease of use are becoming more of a selling point.

All of which implies an even greater need for maketing solutions, as the universe gets more crowded with titles. We're already seeing recommendation networks arise, in-app advertising, web sites devoted to Apps... but it's still early in the market's development. Marketers will have to stay nimble, as things change in the span of a few weeks. Change is the only constant.

Handling Graphic Artists

It's important to have a good graphic artist working on your marketing materials, whether it's collateral like fliers or a website. You want your materials to be professionally presented. Why? Because there's a message you want to transmit, and the graphics help transmit that. Sometimes it's just a subliminal "this company has a quality product" message, in addition to the overt marketing messages. Sometimes the graphic presentation helps reinforce the marketing message ("this is a pirate game, and the graphics look like an old treasure map").

The important thing is not to let the graphics get in the way of the marketing message. If you can't find your web site easily, that's a problem. If the headline is important, it better be readable. Don't let the graphic artist get so wrapped up in "pretty" that they forget about "functional". This is not art, it's commerce. Here's the instruction to give the graphic artist: "Use your skill to make this marketing message as beautiful as you can, without obscuring the message."

More Odd Marketing

I'm kind of torn about reporting bad marketing incidents. On the one hand, I hope that we can learn how NOT to market by some examples. On the other hand, just by linking to these examples, am I not showing that this "bad" marketing is actually getting more attention? Upon consideration, this is like a small child acting badly in order to get attention. Yes, your parent will pay attention to you, but is it the kind of attention you want? And do you get rewarded or punished for your bad behavior? I like to think that bad marketing gets punished by bad sales... but usually marketers are at their best when using their skills to market themselves within an organization, so they spin their bad efforts as good ones and hope the manager isn't paying close attention.

Which is all a preface to this example of odd marketing for a game based on the Prison Break TV series. OK, sending an interesting package to a reporter can get you a story... but really, a bar of soap and the message "grab your ankles" for a prison game? Classy, very classy. That might be the kind of remark you make to a friend that you know will laugh at it, but you woldn't say it to a stranger you're hoping will write a story for you. Would you?

Just like using pole dancing as a marketing tool, this may have worked when the only market for games was 15-year-old boys of all ages, and that also described all of the journalists. Now, though, when the highest growth is in a market where the average gamer is a 43-year-old woman, the sophomoric guy-humor approach is far too limiting.

 

Oh, and now Nintendo gets into the act with this piece of marketing for the new DSi XL. I guess I know what Nintendo's marketing is concerned about. I guess they've decided to give up on appealing to female buyers.

Questionable Marketing

I did manage to miss this marketing effort, but Ars Technica covered it here. The bright idea is holding a press event for your True Crime game that involves Chinese triads and making it special by replicating a back-alley Chinese club... complete with pole dancers.


Now, I don't have anything against pole dancing myself, but when you do something like this you need to consider the possibility that someone you invite to this event may not like pole dancing. Might even be female... and whether or not they are female, they might be offended by pole-dancing. In any of those cases you wouldn't be getting the best coverage from such a person.

And then there's the issue of exactly what creating a deliberately sleazy environment says about your company and the game... it just seems like a risky way to get attention. Though here I am talking about it, so it's succeeded in that sense. But not all publicity is good publicity.

GDC 2010 Post-Mortem

I'm back and just beginning to sort through the flood of information from the show. I'll have some more detailed information on specific topics over the next week. Initially, I want to provide my overall reaction to the show.

There was a great deal of energy at the show. Not for new technologies, but for new business models... and the demise of old ones. The biggest crowds, as you might expect, were in the Career Pavilion, where people laid off from older companies were looking for work at newer companies. Or old companies that are trying to hop onto the fast-moving growth of new market segments.

There was the usual roster of middleware vendors and technology companies, as well as countries and regions trying to attract developers. Holland had a booth nearly as big as Germany... and both of them were quite good-sized. I'll have to count closely, but there were at least a dozen vendors involved in some form of payment processing, from Bank of America and Chase to small start-ups at their first show, all hoping to grab a piece of virtual goods, social gaming, and downloadable content.

There were many interesting lectures, most of which I'll have to catch on the recordings later. Ones I did manage to attend were packed, especially when they were providing any sort of hard numbers about sales and how to get them. The crowd was hungry for data. It's not surprising... opinions are commonplace, data far less so. Exceedingly rare is audited data, where some third party has actually verified numbers. It's easy enough for me to claim I've sold 3 million copies of my game (Using this magic formula! Buy a bottle today!), not so often you'll find an independent verification of that.

At least I didn't see too much in the way of overblown marketing, where the eagerness to get results causes the truth to get lost, and ends up tarnishing the whole business. There was some... and I'll cover that in a future post.

For now, I'm going to get back to sorting information, adding to my contact list, and beginning to get back to everyone I talked to at the show. The all-important followup... having a good plan is nice, but execution is essential. Thanks to all who I talked to that provided input about what I can and should be doing. I have a lot of work ahead, both here and on the web site. I do appreciate you passing the word about this blog and the web site, and I look forward to more comments and discussion.

GDC Day 3: Battle of the Payment Processors

I spent most of the first day of the Expo walking through and talking to all of the business/marketing related companies... and there were a lot of them. Apparently they've noticed the explosive growth in the mobile and social games markets, and how there are many new companies forming to publish games. So many vendors are looking to sell picks and shovels to these gold miners. Picks and shovels like payment processing, quality assurance, localization, and in-game advertising. And every combination possible of these services... with different countries covered, and varying plans, and different specialties...

It made my head hurt and I already generally understood these areas. It's no wonder that most of these booths were empty of showgoers... the programmers and artists and designers were mostly gawking at the spiffy 3D utilities or over in the Career Pavilion trying to find a new place to get paychecks.

The exhibitors were delighted to talk to someone, so I was able to make a lot of good connections. I'll be swimming in information next week. As far as I can tell (and this was confirmed by all the exhibitors I talked to) no one has actually done an overview of payment processing options that covers all the companies (or even a reasonable number of them). I need to do that and explain all the various types of payment options out there, and how they apply to different types of companies... I've talked myself into a big task, but it should be quite useful for developers who want to become publishers.

After that I plan to make a similar effort for QA, localization, advertising, and similar things that are generally useful (or potentially useful) for small publishers.

GDC Day 2: Mobile Marketing

Some good suggestions on marketing iPhone games from the creators of Doodle Jump, which has now sold over 3 million copies on the iPhone. Frequent updates are a big help, but you have to have continuous involvement with your user base as well. Facebook, Twitter, email... monitor the channels of communication and engage the audience. Be ready to leap on opportunities that arise... like when you find out the Jonas Brothers play your game, be ready to blast that info out to your user base and buy an ad in a magazine that Jonas Brothers fans read.

Interestingly, advertising in general was cited as a mostly ineffective marketing tool for them, particularly because their game is only $0.99. Cost per acquisition was too high for most advertising to be cost-effective. Cross-promotions with Pocket God were much more useful, as were buy advertorials on Gizmodo.

I'll be working on a more detailed breakdown of marketing tips distilled from the GDC next week... after I recover from the show.

GDC Day 1

Lots of people were attending the various summits: Mobile, Social, iPhone, and lesser crowds in Serious Games, AI and other events. A number of vendors have tables in the hallways with literature about payment processing, virtual products, cloud computing, and similar topics of interest to developers.

Session contents were interesting. Social games are exploding, with industry revenue estimated to go from $450 million in 2009 to $850 million in 2010. Mobile games are also expanding rapidly, lead by iPhone games. Blackberry and Google are making strong efforts to attract game developers to their platforms, having realized how important games are to the success of the platforms. Apple only realized that after it was demonstrated to them... Apple didn't pay any attention to iPhone and iPod games at the beginning. Now games are a featured part of Apple's marketing efforts. iPod Touch sales are very largely impacted by games, and it's no coincidence that iPod touch sales exploded over the holidays.

It's a gold rush in mobile and social games, so pick and shovel vendors are proliferating.

GDC: Before Day 1 Begins

 Glancing through the program materials, I see many companies are offering a variety of services to developers, including in-game advertising and payment processing. I see I'll need to analyze these and post some info on the 20th Level web site... sorting through all of these competing services is hard enough if you're familiar with advertising, and it gets even more difficult if you're not.

Developers are being bombarded with marketing messages here. I'll begin reviewing and rating the marketing efforts during the show. There are also some interesting talks scheduled that concern marketing issues... more on that later.

The Game Developer's Conference

Next week is the Game Developer's Conference in San Francisco, and I'll be there all week. I hope to see a lot of folks there, and I'll be blogging from the show with my perspectives on the interesting marketing news. In particular I'm always looking at how marketing is conducted at trade shows, and I will highlight marketing that works and marketing that doesn't work as I observe.

It should be an interesting show indeed, as the industry is in turmoil from a slowdown in sales of traditional videogames while there's an increase in mobile, social and downloadable games. Old business models are having problems, and new business models are still experimental. Where there's great change, there's also great opportunity.

If you have been reading this blog and see me at the show, please mention it! Feedback is always welcome.

A Marketing Classic

Positioning: The Battle for Your Mind, 20th Anniversary Edition
Here's a classic marketing text which I highly recommend. This explains the whole concept of Positioning, which is the idea that a product or service occupies a certain position in the mind of the consumer. It's important that you know what position your product occupies, and better still that you are the one to decide what that position is and reinforce it with your marketing efforts. Once that position is in place, it's awfully hard to change it... if you think of a Hyundai as a low-cost car, it's going to be difficult to get people to think of it as a luxury brand.

So if you're looking for a good read on a marketing classic, try this book. It will give you a new way of thinking about your products.

20th Level Goes Live

Check out my new web site at www.20thlevel.com. It's a work in progress, and will be getting a lot more content once the Game Developer's Conference is over, but I hope you'll all visit!

More on E-Book Pricing

The New York Times has talked to some unnamed book publishers, who must have been getting the impression that customers don't exactly believe that e-books should cost $15. This article lists the logic of these unnamed publishers in pricing e-books at that level. Fundamentally, they point to their overhead that needs to be paid for, production costs of e-books being the same as for regular books, and how, well, even if they do make a bit more on e-books it's because they need to keep the poor bookstore chains alive, so they price e-books high to keep from selling too many of them which would reduce the sale of paper books and send bookstores into oblivion.

There are so many things wrong with this logic it's hard to figure out where to start. Let's look at one unspoken assumption first: Their logic assumes that each e-book sold means one less physical book sold. If you only ever addressed your marketing to people who already buy your books, I still don't think this would be entirely true. There have been no studies on this subject that I'm aware of. Mike Stackpole address the issue in this essay on his blog.

The fundamental logic of e-books is that you have eliminated many expenses: printing, warehousing, shipping, returns, lost sales from being out of stock, and the extra margins given to distributors and retailers. All you're left with are transaction costs (getting less all the time, and generally around 3%), the overall cost of your operations (which can, as Mike points out, be conducted nearly anywhere, and most of anywhere is cheaper than New York City), your production costs (graphics, art, typesetting), and the cost of paying the author. Oh, yes, and of course any marketing costs you may have, such as web sites, PR, book tours, advertising... and all of those costs you should be spending in proportion to what you think you're going to sell of the book.

This all means that with an e-book, you can experiment much more with pricing to find if lower pricing actually generates more total profit for you. If your fixed costs for the book are less than $1, then the important thing is not whether you charge $2 or $20 for the e-book... the important thing is the total revenue you take in and the net profit you're left with. Usually the author costs are variable, being a royalty based on the selling price. If you as publisher or author get $10,000, do you really care if it was from the sale of 1000 books that earned you $10 apiece, or 10,000 books that earned you $1 apiece?

The only part you should really care about is whether you could have generated a bigger pile of cash by pricing the e-book differently, or by spending more or less on marketing (and how you chose to market). This is the sort of thing each publisher should learn through experimentation. Trying to set prices with your gut, and then spending time preaching to the customers about how you know what's best for them and the world, is a recipe for failure. You'd think the example of the music industry should have been sufficiently instructive... but it appears the publishing business is planning on similar head-in-the-sand mistakes. Small publishers should avoid this.

Some Humorous Marketing Advice

Here's a funny piece from Gamespy on how to build and market a Japanese or Western style RPG (electronic, I hasten to add). It's all too true in the conventions of electronic RPGs... and in their marketing. Sometimes you can get some good ideas on what not to do by reading some satire... a good reason to avoid the ordinary in both your game design and your marketing.

Though it is hard to get terribly creative with your marketing when the game is utterly formulaic. Then you risk making marketing claims that are way beyond the capability of your game to deliver. Which can put your future marketing at risk, as customers relegate you to the category of infomercial pitches and snake-oil salesmen, and start mistrusting everything you tell them. Overselling may help with your current product, but it can hurt you in the future.

iPhone App Piracy

An interesting post on Gizmodo looks into the piracy situation for iPhone apps. While many publishers deplore piracy and blame it for significant lost sales, that may not be true for the iPhone. Apple's locked-down distribution methods have kept piracy to a minimum; it's somewhere under 10%, and probably significantly below that. The new ability to sell products from within apps also seems to be helping keep piracy down.

I think the low pricing of the apps also has a lot to do with it. The incentive to pirate are significantly less when a game is 99 cents than when it's $60. Even the games that sell for $10 are a bargain compared to their counterparts on other platforms (some of which may be nearly identical). The larger concern for publishers should be finding the buyers rather than worrying about piracy.

This is the reason, probably, behind ngmoco's move away from selling games to free-to-play games. They are looking for revenue from upgrades and the sale of digital objects, which is a fast-growing area. We'll see if this works for them.