Game Marketing Tips, Analysis, and News

Tuesday, November 30, 2010

The Jungle Is Testing The Waters

Panasonic's mysterious The Jungle handheld (yes, it's The Jungle, not just Jungle) is about to begin testing with consumers in the US, according to Bloomberg. If you were one of the people signed up on their website, you may have gotten an email... wow, Christmas comes early, doesn't it?

Panasonic has still not revealed any more information about the handheld device. Of course not; that would be telling. Better to have a cloud of expectations rather than hard facts. It's mysterious and murky, like a real jungle. Or maybe it's like watching a car crash in slow motion... Panasonic continues to provide lessons in how not to launch a product.

Oh, wait, here I am talking about it! More press is good, right? Somehow I don't think my comments will be causing people to rush out and buy this thing... if they ever will be able to buy one, that is.

I guess I just have a fondness for the oddball devices that have littered the roadside of the gaming industry... Gizmondo, Phantom, N-Gage, Virtual Boy... It always amazes me to see millions of dollars spent on something that just doesn't seem to have a chance. THough at least all of these other devices had a cooler name than The Jungle...

Google TV Off To A Bad Start

Not an actual Google TV.
I've seen Google TV as a harbinger of the coming AppDroid Apocalypse, as Apple TV and Google TV invade the family room with the app market business model and decimate the existing videogame industry. (Yes, I know "decimate" comes from the Roman practice of killing one legionary in ten to punish the troops... and in this case, a 10% reduction in force sounds about right for the early impact on the game industry. So the term is used with precision in this case.) Well, we may have to wait a bit longer for the carnage to begin. Early reports on the Google TV have been pretty poor; it's expensive, complicated, and most of the important video sites on the Net you'd want to see have blocked it.

Now comes this word: We're seeing discounting of Google TV units, a sure sign of weakness in sales. A 25% reduction in price is not a good sign... it may be an attempt to prime the pump and get things moving with an early holiday sale, but no matter how you look at it, when you drop the price it means you don't have enough demand to keep the price high.

What's the problem with Google TV? Clunky and overpriced springs to mind, and launched before it was fully baked. Google should have had deals in place with various key video sites, not getting blindsided by sites blocking the device and making it nearly useless. Google seems to have problems getting a slick interface together... just check out the Android Market if you want to see what I mean. Sure, I understand their philosophy; just throw something out the door fast to see if anybody likes it, we can always refine it later. Keep it open so developers can jump in and do cool stuff with it that Google doesn't have to pay for up front, then maybe acquire somebody if they do something really smart. Sounds great, but so many times Google has put something out and it just doesn't click because no one gets it or it's so clunky no one wants to take the time to figure it out (hello, Google Wave?).

Maybe this is why Apple hasn't rushed to put an App Market together for the Apple TV... they want to refine the user experience first, not second. And maybe get some content deals in place so it launches well. Sounds clever, doesn't it?

Google TV isn't dead, not by a long shot. But they will have to seriously improve it with the 2.0 version if they expect it to make a serious impact. Perhaps they will figure things out before they start making their app market available... I hope so.

Monday, November 29, 2010

The Wanting

If you're looking for another reason to be pessimistic about the holiday sales picture for videogames, here's one: Nielsen's got a survey of kids about what they're looking for for Christmas. Number 1 for kids age 6-12: The iPad. Followed by a computer, and an iPod Touch. At least when you get to the number 4 slot it's a Nintendo DS, and then number 5 is a PS3. But it's kind of interesting how far down the Wii, and the Move, and Kinect are... and the Xbox 360.

The picture for kids age 13+ is also interesting:

A computer is number 1, followed by a TV (high-def, no doubt, not 3D); and then we get into smartphones and the iPad.

You can understand by looking at this survey why handheld videogames are lagging, and why publishers should be concerned about sales of them in the future. If kids are all going to be getting smartphones, it's harder to convince them to carry yet another portable device around to play games. If they have a spiffy smartphone that can play games (and games that are cheap), why have another device? Juggling two pocket devices gets tricky. And you have to have your phone... otherwise, how will you get and send text messages? (Gee, you'd think handheld consoles might be able to do that... what if you added a 3G chipset? The rumored PSP phone might be what you get.)

If you extrapolate this to see what can happen in the family room when you have mobile device app markets available, you can see where the whole industry is headed. The high growth rates are going to continue to be in the non-traditional areas. The old school industry, currently showing negative growth rates for the past two years, isn't likely to jump into high growth rates any time soon. Or ever.

Wednesday, November 24, 2010

Size Isn't Everything, But It Is Impressive

I understand this comparison is not meaningful on many levels, but counting up the number of games on different platforms is an interesting metric. The total number of iOS games in a few short years has exceeded the total number of console games, and made a fair bid to exceed the number of Flash games.

Of course, it's far easier to create a game for iOS than for a console, and requires orders of magnitude less money and time. And without a doubt Sturgeon's Law applies, as it usually does. Still, it's an amazing example of creativity in a short amount of time, and certainly some real winners have appeared. Better still, some new game companies have emerged that otherwise would not have found financing, and some older developers have found a new source of income in repurposing old titles for the new platform.

It's also worth noting that the Android numbers would be similarly impressive, even if not quite as large as iOS numbers.

Of course, the size of the market only underscores the marketing challenge you face in trying to stand out amidst so many titles. It's hard to find gold when everybody is panning the same stream.

Will Microsoft Conquer The Family Room?

The sleeping giant may have been awakened... Apparently Microsoft is looking for engineers to help expand Silverlight on the Xbox 360. (They've already brought Silverlight there to serve as a platform for streaming media and especially advertising.) Or, in other words, they are planning to bring an App market to the Xbox 360, since Silverlight is the primary development platform for Windows Phone 7. Given that they've already said there will be a high level of integration between Windows Phone 7 and Xbox Live, the corollary is obvious: Microsoft wants to bring an App Market to the family room.

Anybody with half a cerebellum knows that Google and Apple are going to be selling Apps in the family room, and that games will be the most popular apps by far (just look at the mobile market). The console makers already have hardware in the family room, by the millions. What they don't have is the business model. It looks like Microsoft is figuring out that they have a head start in the race for control of the family room; all they have to do is start running.

Of course, if Microsoft really wants to compete with Apple with apps, they have to meet or beat Apple's environment. That means no big upfront fees to develop (Apple charges $99); no huge bureaucratic process to wade through for app approval (Apple's process is not transparent, but for the most part you just send in the app, wait a few days, and it's in the store); a reasonable cut of the revenues (Apple takes 30%). Microsoft can certainly improve on what Apple offers, certainly in the realm of helping customers find apps. App markets in general have poor interfaces and limited tools for finding apps you're interested in. And don't neglect the importance of in-app purchasing!

With some work, Microsoft could use this effort to jumpstart interest in the Windows Phone 7 offerings, and perhaps build up some market share worth mentioning. (Unlike Zune.) What's holding Microsoft back? Perhaps the prospect of thousands of low-cost or free apps and how that might hurt the business of selling higher-priced games. Well, as they say in business, sometimes you have to eat your own young, or your competitor will. Better for Microsoft if they're the ones revolutionizing the business model, rather than Apple or Google.

Of course, if Microsoft is just looking to hire someone now, that means they're quite a ways from actually having something. They are late to the party, given that Apple can flip a switch at any time and have an App Store going on Apple TV.

2011 is going to be a very interesting year for game developers and marketers.

Tuesday, November 23, 2010

Nintendo's Very Bad Year

Over at Gamasutra, Matt Matthews has analyzed the sales figures for console game software in 2010 versus 2009, and the results are interesting. As you'd expect, the older systems aren't selling much software; the PS2 really slowed down. The PSP was having a hard time selling software, too; perhaps because developers have been pulling back, and anticipation is growing for the PSP2. The DS's software slowdown is harder to explain, especially when you consider that it still sold 4.5 million units this year, making it the best-selling platform, and it's got a huge installed base of over 125 million. Yet software sales still dropped 12%, far more than average. I think it's partly due to the effect of iPhone games and Android games, but there's no way to know for sure.

The big story here is the collapse of the Wii. It's fallen to third place in software sales, despite having a much larger installed base than either of the other two consoles. Clearly Wii owners just aren't buying much software, and the issue is probably made worse by publishers backing off on Wii support (especially for major titles). The Wii's lack of hardware power will probably hurt it more and more in the next few years, as publishers continue to wring out more performance from the Xbox 360 and the PS..

Also, the HD output of the PS3 and the Xbox 360 will be increasingly important, as the adoption of high-def TV sets increases. Wii titles are going to look increasingly dated compared to titles for other consoles. Worse, the Wii's motion control is no longer unique, as both Microsoft and Sony have better solutions. The only thing the Wii has left in its favor is price, and that advantage will continue to erode unless Nintendo takes some drastic pricing action.

Let's also note that Microsoft is having a great year with the Xbox 360, and Sony is doing well, too. They seem to have finally hit their stride, and third-party support for their consoles is strong. They still have the competitive threat from the Apple TV/Google TV juggernaut on the horizon, but otherwise they seem well-positioned for the next year.

If Microsoft and Sony really want to slide the knife in deeper, they'll cut the prices on their motion control hardware next year (after they've gotten all they can from the early adopters who don't mind paying the premium). This will really make life difficult for Nintendo. At this point, only a new console will really rescue their sales. A price cut on the Wii would help, but it's unlikely to bring back big-time support from third-party publishers. Without that, the Wii will continue to sink into obscurity.

Nintendo must be hoping the 3DS is a huge success, because there's nothing in the Wii outlook that makes one optimistic. Nintendo needs to get a new console out there by Christmas 2011 if they hope to be relevant to the market, and they are already behind if they really wanted to do that.

It's going to be an interesting year in the console wars...

Monday, November 22, 2010

More Games On TV?

If you thought that Apple TV and Google TV were going to make the family room a dangerous place for console games, it looks like there's even more competition. Yahoo! Connected TV is going to be adding paid apps to their lineup. Yahoo! has had their widgets built into TVs from Toshiba, Vizio, Samsung, Sony and LG for a while now (in selected Internet-connected models), and with this new program will be allowing developers to create apps and sell them for your TV.

Nothing is said especially about games, but I can see some Texas Hold'em in some of the screen shots. The materials I burrowed through didn't mention anything about animation, but you can still create many games without animation. Sure, this will no doubt be a pale shadow of what you can eventually get from a fully enabled Apple TV or Google TV, but neither of those platforms are ready for gaming action yet. (Google has said "sometime in 2011" for having an Android Market designed for Google TV; Apple hasn't said anything at all, but it sure seems like an obvious move.) Yahoo! will start allowing paid apps in 2011, so they will steal a march on their competition.

The family room space is heating up for game developers. You'd think the current consoles would be in a good position, since they already have hardware in place (and continue to sell it) and a large installed base. Unfortunately, they are saddled with old business models and are finding it difficult to change (Ooh! Nintendo has started to allow demos of games in their WiiWare store! Wow!). The fight going on now is for the hearts and minds of developers, and the current console makers are in a stupefyingly bad position for that battle. "Hey! Sign up to create games for our console... pay this fee... plan on spending months wading through the bureaucracy and waiting for approval... wonder if your games are going to get stuffed into an obscure corner of our online store..." or "Create whatever you like and put it into our store." I wonder which one is easier to sign up for?

This all represents a big opportunity for old-school game companies... you know, the kind that still produce things on paper. Find yourself a programmer, guys. Grab a bucket, it's about to rain soup in the family room.

Friday, November 19, 2010

The New Consoles That Could Shake The Industry

Could this box reshape the industry?

OnLive and Gaikai, two relatively new companies that are trying to reinvent the gaming industry will soon reach important milestones in their quest. What are they doing and what does it mean for the industry? It's cloud gaming, but their approaches are different from each other. Can one or both succeed?

I've been skeptical about OnLive since I first heard about it at GDC. The basic pitch was interesting: A service that could stream the most graphically intense games from any platform to your TV or computer screen (all the TV would need would be a simple, inexpensive box). You'd sign up for the service and then be able to buy from a wide variety of games, with no download times and no need to upgrade your system. The games would be run on OnLive's hardware, which would be far more powerful than most home systems. (Here's a good overview of the system from a few months ago.)

My skepticism was rooted in two technical barriers I saw. The problem of lag seemed to be an absolute technical barrier, and the amount of bandwidth needed to send a high-resolution screen seemed amazingly large. OnLive was able to come up with some nifty compression and worked to massage the network bottlenecks at every step, minimizing the latency and bandwidth issues. They had some good-looking demos, but of course that was in a controlled situation. Would it really work out in the wild?

Initial reports were good, but there were some issues. OnLive initially had a subscription fee as part of their plan, but quickly dropped it as it proved hard to get people to sign up for a fee and then still have to pay for the games. The bigger issue is still the limited number of titles (a couple of dozen right now), and the amount of bandwidth you need. If you want high-definition video, you're going to need a connection of 5 Mbps or greater... not something everybody has.

Now the most important component is about to ship: The OnLive Game System, a $99 box you hook into your TV and the Internet. Assuming you have a beefy enough connection, you just pick up the controller and start playing. The real battle for OnLive's future is about to begin. Can they sell enough of these boxes to create a viable installed base? And can they sign up enough games to attract an audience?

Here's an early hands-on review, and the verdict is good. One of the cool features cited is the fact that you can just buy a 3-day pass to a game for about $7, or a 5-day pass for $9, as well as buying the whole game. You can also play for 30 minutes as a free demo. They've worked to make it as easy as possible for people to try games and to buy them.

On the plus side, OnLive already has HD display, which the Wii doesn't. The low price point is great, also the fact that you don't have to worry about upgrading your system. Of course, you do have to worry about OnLive going away at some point and taking with it all the games you paid for... which is a problem Steam has faced for a while, until it got big enough that people didn't worry about its survivability.

One big question for me: Where's the marketing? No TV ad buy? Maybe I'm not seeing the ads because I'm not in the demographic they're targeting, but I'm not feeling the buzz. Are they just relying on PR to save the day, and take their growth organically rather than pour in some booster shots of marketing?

Keys to OnLive's future lies in two things: They need a large gaming library, the bigger the better, with the biggest hits; and they need to get a large installed base. Fail on either of those two things, and they're gone. Can they accomplish that before their funding runs out?

Meanwhile, David Perry's Gaikai is taking a different approach to cloud gaming. Here's a good summary of their approach; essentially they want to make it easy to embed a game anywhere on a web site, and then convert that to a paying customer. Rather, Gaikai gets paid by the game publisher to run the game, and then sales get routed however the deal has been cut.

Now Gaikai is about to enter open beta, and we'll see how well the model holds up in practice. Will they be able to get enough companies paying them to run games? Will users click on games and play them? It all sounds reasonable, but the beta will tell us much.

I think there are several factors working against cloud gaming. One is that momentum is with social gaming and mobile gaming, and the hardcore gamers are being pulled away by other entertainment options. These services are all about making hardcore gaming easier to get to... but is that really where the big audience is these days?

Another issue is the publishers. Do they really want to encourage digital distribution? If they do, do they risk a loss of revenue through traditional channels that won't be offset by the new channels? Will Microsoft sign up, or do they fear losing revenue from selling their consoles?

We are swimming in gaming more than ever before, with Facebook games and mobile games and Flash games as well as PC and console games. Are there just too many games around for these services to succeed? Was the demise of InstantAction a harbinger? Will these services take a chunk out of game industry sales or add to them?

I'm not sure what the answers are, but these companies deserve watching, and marketers need to be ready to act when the trends become clear.

Thursday, November 18, 2010

October Sales Were Scary

They aren't laughing at the sales charts.
Numbers have been shared for the game industry's October sales, despite the best efforts of NPD to put their data behind a paywall. As you might have expected, it's not all that pretty. Total sales dropped 4% over last year, but the real downer is the 26% drop in hardware sales. Software sales were actually up by 6%, and accessories (like Kinect and Move) jumped 18%.

Still, when you consider some of the high-profile software releases lately you can understand why that category rose. What's more disturbing is the huge drop in hardware sales. Nintendo sold just 232,000 units of the Wii console for a third-place finish, a decline of 54%, while the PS3 sold 250,000 units (a drop of 22%, but of course last year they had just dropped the PS3 price at this time). The Xbox 360 was the big winner, with sales of  325,000 units, a gain of 30% over last year.

NPD tried to put a happy face on things by saying that, well, these days not all of the revenue in the game industry is captured by these numbers; there's digital distribution, social games, used games, DLC, etc. True enough, but the key fact is most of the companies dependent on the traditional industry revenue don't see much of this other revenue. Sales continue to be in the dumper, and the happy holidays have not yet materialized. Except maybe for Microsoft, whose Xbox 360 continues to gain due to Halo: Reach and Kinect. I wonder if Microsoft will be able to continue their streak... or if Nintendo will manage to break their losing one.

Nintendo can try to say Wii sales will be fine, but the numbers don't bear that out. And while they are looking forward to the 3DS reviving handheld sales, meanwhile DS software sales sank 32%. Not something to make third-party publishers happy with Nintendo. Of the three manufacturers, Nintendo seems most in need of newer hardware, yet is the one most consistently saying they aren't even considering it. Maybe Nintendo wants to get back into playing cards...

Wednesday, November 17, 2010

Kinect, Move Both Selling Well

The two big gaming hardware introductions for the holidays, Microsoft's Kinect and Sony's Move, are both selling well out of the gate. Microsoft has boasted of selling more than 1 million Kinects in 10 days, and they expect to exceed their enhanced target of 5 million units through the holiday season. They also noted it would be launching in Asia in a few days, though anyone who knows how poorly the Xbox 360 has done in Japan would know not to expect too many sales for Kinect from there.

Sony, not to be outdone, has also stated that Move has sold more than 1 million units in North America and 1.5 million in Latin America, though they haven't provided recent updates for those figures. Of course, the Move is only $49 compared to the Kinect's $149... though of course you really want to get a couple of Moves to equal what the Kinect gives you.

Both motion control packages seem to be doing well, and probably will continue to do so during the holidays. The big loser in all of this is Nintendo, as Microsoft and Sony have just taken away one of the Wii's major selling points as the only console with motion control. Both Microsoft and Sony now offer better motion control solutions than Nintendo, though Nintendo still has them on price.

But I think this changes much of the argument over which console to get. When the Wii was first introduced, I think part of why it did so well was because it was a great family-oriented console, as well as being $200 to $300 cheaper than what Sony and Microsoft were selling. Now, all three consoles have a nice array of family-friendly, easy to play titles (Kinect being even easier with no controllers whatsoever), and the price differential is down to $150 or even $100 (not if you count the motion control bundles, true). So the kids can argue more successfully for the Xbox 360 or PS3 with all the cool games they really want... because the family can play games on them too. (And if you want a Blu-ray player, the PS3 becomes an even better deal.)

Is it a coincidence that Wii sales are off 60% over last year? Yet Nintendo seems to be content to rearrange the deck chairs rather than changing course. I think Santa's gonna bring them a lump of coal for Christmas.

Tuesday, November 16, 2010

Retailers Want To Let Off Steam

A retailer getting Steamed?
A UK game industry site,, is reporting that UK retailers are threatening to keep PC games that include Steam off their shelves. Apparently the retailers are afraid that Steam, with 80% or so of the digital distribution market, threatens their business.

Well, yeah, it would... if their PC business was anything to speak of. Have you been to a retail store and looked for a PC game lately? Not a lot of shelf space allocated there, and it's usually poorly arranged and jammed with an assortment of non-gamer oriented titles based on game shows and such. It's been years since PC games at retail mattered all that much to the retailers; they make most of their money from console games. Aside from the occasional megahit, that is... like Blizzard's upcoming Cataclysm release. But such AAA titles are a market force unto themselves.

I think retailers are concerned about publishers concentrating on more downloadable content that the retailer doesn't get a chunk of, as we've already heard about from THQ and others. Major publishers are already heading in the direction of digital distribution, at least for add-on content. So retailers are trying to stop the tide from coming in... but it's going to come in regardless. Banning games from stores may just push customers to looking for them online, thus bringing about what the retailers fear.

I haven't heard of this revolt occurring in the US, perhaps because retailers here are already exploring ways to deal with digital distribution. (Like GameStop buying Kongregate, for instance.) It's really going to pinch retailers if publishers start pushing for the release of console titles through digital distribution, not just the occasional map pack or scenario. Perhaps that's one of the reasons so many retailers are exploring used games as a revenue source.

Retailers are nothing if not adaptable, though, especially the mass-market chains. Audio CDs not selling the way they used to? Reduce the shelf space allocated, expand the area devoted to something else. When it happens with games, we'll see the same thing. Publishers have to be concerned about visibility for their titles, and hardware makers are especially concerned about their retail presence. I expect there will be a lot of pushing and shoving going on between retailers and publishers over the next couple of years.

Monday, November 15, 2010

Kinect Is Watching You

Insanity Clause?
Today's Creepy Marketing Award goes to Microsoft, for this little gem: Kinect could be watching you while you watch, say, ESPN, and report back to advertisers what team you're rooting for, and select ads tailored to you.

The fevered imaginings of a journalist eager for headlines? No, this was from the COO of Microsoft's Entertainment Division, trying to impress an investor's conference. Kinect could help the company “be more targeted about what content choices we present; what advertising we present; how to get better feedback and data; about how many people are in a room when an advertisement is shown; how many people are in a room when a game in being played.” Since Kinect can see and hear you, and analyze the data it collects, it can figure out things like your team preferences based on the colors you might be wearing.

Now, this is similar to what search engines do, by looking at your search history and your location to filter search results. But it seems to me that actually watching and listening to you goes a step beyond in terms of privacy invasion. It reminds me of that school district that gave students webcam-equipped laptops, then spied on them at home.

Microsoft tries to be reassuring by noting that they aren't doing this. Yet. I certainly hope that before they do this, they put in some sort of user controls so you can be in charge of how much information Microsoft collects and uses. Here's Microsoft's exact statement on the matter:

"Xbox 360 and Xbox Live do not use any information captured by Kinect for advertising targeting purposes. Microsoft has a strong track record of implementing some of the best privacy protection measures in the industry. We place great importance on the privacy of our customers' information and the safety of their experiences."

Sounds good, but of course, you're still trusting Microsoft to handle this data. And I wonder what would happen if a government agency subpoena'd this information... or could get rights to that data stream. I guess anyone really concerned by these issues might want to take a pass on owning a Kinect. Still, living in the 21st century has meant giving up a lot of privacy in order to take advantage of certain things. You can still be relatively private, but Amazon or Google won't be giving you helpful suggestions.

It's possible Kinect and Microsoft could go even further, using facial recognition software and some more processing to determine your attitudes towards what you're viewing.What the NSA could do with this sort of data stream... and Microsoft is interested in using the Kinect technology with all computers, not just 360's. They envision a home that recognizes you when you walk in the door, and responds to your voice and gesture commands. (Does the Roomba come rolling up to you, yipping happily,  when you come in the front door?)

I think it's really important for marketers, who are the gatekeepers for this sort of information flow, are completely open with customers about what data they track and what they do with it, and letting the customers control how the data can be used. Microsoft should have discussed this capability with customers before touting it in front of investors.

Instant Action, Gamebryo Shut Down

A couple of high-profile companies serving the game industry announced last week they are ceasing operations. Emergent Technologies, which has offered the Gamebryo middleware for a number of years, has decided to liquidate its assets and shut down. Their middleware had been used by many companies, including EA and Activision.

Lou Castle's InstantAction browser-based technology (which allowed to play Secret of Monkey Island, among other things) is also shutting down. They're looking for buyers for their Torque engine. It's too bad, because the idea was pretty cool: You could start playing a game right away without a lengthy download, and you could embed a pretty cool game on a website or a blog.

It's hard to tell from the outside why such efforts fail. Sometimes the idea isn't compelling, or sometimes they just don't have a revenue model that works (or works fast enough to overcome the initial capital outlays). Sometimes it's the structure of the company, or management issues, or just financial overreach.

I'm hoping that some buyers step forward and grab these technologies, because I think middleware is a very important part of the industry going forward. Middleware makes it easier for developers to bring creative game concepts to market and reduces development costs. InstantAction had some very interesting ideas that could bring gameplay to a much wider audience, and offer smaller developers ways to reach an audience and make some good money.

Friday, November 12, 2010

Holiday Fables Told Anew By Nintendo

This will save Nintendo's holiday sales? Ho ho ho!
It's that magical time of the year when fairy tales are told and wishes are magically fulfilled. Which is really the spirit of Nintendo of America president Reggie Fils-Aime's remarks to investors. Money quote: "The holidays are more important to Nintendo than to other manufacturers," he said. "We have a distinct edge when it comes to gift-giving, and it's no doubt because of the familiarity and recognition of both our brand and key franchises." He added, "The Nintendo difference continues to attract new consumers. ... For us at Nintendo, it's full speed ahead."

Yes, he'd like us to recall the golden years of past Nintendo holiday sales... not the harsh reality of this year, when sales are off more than 40% for the Wii. It gets worse: Industry analyst Michael Pachter is predicting a 60% drop in Wii sales for October, and the rest of the holiday season doesn't look much cheerier. Ouch is too mild a word... is there a word for when you take a sword blow to the intestines, or somewhat lower?

Oh, but Nintendo has a solution for the holidays: "From a Nintendo perspective, we have two red bundles in the marketplace that we didn't have last year." Right, of course, how could consumers resist buying a red Wii? I already feel this urge to replace my anemic white Wii with a spiffy new red one. That is, if I could find out where it's been gathering dust in the house while the 360 gets all the action.

I do plan to dust off the Wii and fire it up when Epic Mickey comes out, just so I can see what Warren's been up to. I have no doubt it'll be awesome. I also have no doubt that Nintendo's gonna get stomped this holiday season by people rushing to buy 360's and PS3's. For October sales Pachter expects the Wii to drop 60% to just 205,000 units sold, while Xbox 360 is forecast to grow 58% to 395,000 units sold. Sony's PS3 is expected to dip 17% to 265,000 units. I see no reason for the general pattern to change for the rest of the holiday season.

Ad Solutions For Rest Of Us

If you're looking to promote a book or a game in an inexpensive way, you've probably looked at Google's Adwords program. This is how you buy a listing next to search results, and it's been the source of 95% of Google's revenues. Because it works for advertisers, and they get to control their spending very precisely and see just how much they are making from their advertising. (As opposed to magazine ads, where you generally have only a vague idea of how effective they are, if any idea at all.)

Now there's Facebook Ads, which (not surprisingly) are somewhat similar to Adwords. You get to control how much you spend, and you can pay for clicks or just for viewing. You can send people to your Facebook page or to your web site. With Facebook's enormous audience, this could be worth a lot of business. Especially if you've been building up your social marketing by working a Facebook page and Twitter.

There are some examples to look at on the Facebook Ads site, but here's an article (a hat tip to George MacDonald) that presents some case studies of Facebook Ads usage, showing the range of what's possible. Just as with Adwords, you're limited in the amount of space and words available, but not as limited (Facebook gives you 25 title characters and 135 body text characters).

The best part about both of these programs is that you are in total control of how much you spend, and you get all the information you need to analyze your spending. It should be pretty easy to look at how much you spend, and how much revenue you bring in, and then decide whether or not to expand your ad buy or to stop spending.

Yes, you'll need to work on how you can make these ads as effective as possible... the right wording is crucial. Also, where you bring the customers and how you close the sale is important. The cool thing is you can tweak these variables and see the results, good or bad, almost immediately. There's nothing like feedback to make corrections!

(If you're looking for advice on Google Adwords, there are roughly a bajillion guides to using them out there... at some point I'll post some of my favorites. But there's plenty of advice for those interested in getting the most out of this tool.)

I see these as one of the key marketing tools for the small business marketer -- the author trying to sell an e-book, the developer trying to sell an app, a designer trying to sell an RPG. Once you've got your web site and your products ready to sell, this is how you get that first wave of customers beyond your closest friends. Without spending a zillion dollars on marketing.

Thursday, November 11, 2010

3 Key Game Industry Trends

Is this how most game industry executives discover trends?
Several news stories breaking this week show signs of intelligent life in the game industry, and point to the new directions the industry is taking.

Gaming Gets Bigger Worldwide. Sure, this has been happening for a while, but since the beginning of electronic gaming the industry has been built around the United States, Japan, and Europe. If you've been watching, South Korea and China have become huge audiences for gaming and have grown some very large companies. which have been buying up US and Japanese companies. Gaming is spreading beyond these regions, as this study illustrates. The Southeast Asian game market will be close to $1 billion this year, and will hit $1.7 billion by 2014. So far, most  big game successes in that area have been home-grown, but World of Warcraft shows that a US game can do pretty well in an Asian market, thank you very much.

Indie Distribution Options Get Better. Indie games have struggled to find an audience, mostly relegated to Flash game aggregators like Kongregate. Now this article shows that options are increasing; EA Partners has signed up three indie developers to bring their titles to Xbox Live Arcade (XBLA), Playstation Network (PSN), and PC. It's a validation of those three games, of course, but also a message to indie developers that there is a wider market available they can reach even without the capital or experience necessary to navigate the process a Microsoft or a Sony will put you through. This also benefits EA, of course, by cutting them in on a revenue stream and helping identify good developers EA might want to acquire at some point in the future.

The Big Publishers Get Smarter. One example of this trend is the above item, where EA shows they are aware of things happening in the business and taking advantage of their strengths. An even better example is this article about comment's THQ's Brian Farrell made at an investor meeting in New York. He's planning to launch one of their AAA upcoming titles at $39.99 instead of $59.99, and hopes to make more money by selling DLC. He sees the important thing as building an audience for the title, which he can then monetize for years. Obviously it's easier to do that by selling the title at a lower price point, especially in a market environment where game sales are lagging. I think we'll see more publishers try this, and go to even greater lengths to build an audience for a title. We'll also see more different ways to monetize game development, through free-to-play and subscription options. I think the $60 price point is looking increasingly unsustainable for most titles, and we'll see fewer of those high-priced units in the future.

These trends offer some hope against the relentless drumbeat of poor sales numbers. There are going to be plenty of changes, though, so keeping ahead of things is even more vital for marketers.

Wednesday, November 10, 2010

Hasbro Brings 3D to iPhone/iPod Touch

Viewmaster 2010?
Yeah, you read that right. Hasbro. Not exactly a cutting edge technology company, but you have to give them credit for thinking big. They must have looked at the iPhone market, and the excitement over Nintendo's upcoming 3DS with the 3D display, and said "What if we could combine the two?"

This is their answer. My3D, a device that lets you slide in an iPod Touch or an iPhone, and it sells for $30. Of course, you'll need 3D content, which they're hoping will be games (some free), TV and movies, and perhaps even virtual excursions into aquariums and the like.

Gee, maybe they can redo some old Viewmaster collections and put them up as apps.

OK, perhaps you're sensing some skepticism on my part. Good catch... I think that putting something up to your face like that for more than a few moments will get real old, real fast. And how exactly would you control a game when the iPod is inside the case? Throwing your head around? What do you do when the phone rings? No amount of marketing will save a bad idea, and this is one of those cases. How bad it is depends on how much money Hasbro throws at it, which I hope for their sake isn't a lot.

I don't think this will take over the world. Remember, you heard that prediction here first.

Kinect the Dots

Kinect allows you to feed Wiimotes to virtual children?
Will the Kinect sales surge fade before I run out of puns? You can but hope...

While there have been some weird (Kinect is racist because it doesn't see dark-skinned people) and disturbing (Kinect is eavesdropping on you and broadcasting your private conversations!) news reports about the Kinect, generally the early buzz is positive. Early reports had Kinects selling out at and, while even some brick-and-mortar locations sold out in the first morning of availability.

Of course, the cynical marketer in me wonders how much of that is Microsoft manipulating things by not shipping a whole lot of Kinects right away. You can always say you haven't ramped up manufacturing as rapidly as you had hoped... and it sure is nice to have reports of product shortages popping up in the media, creating more demand. Besides, Christmas shopping hasn't begun in earnest yet... plenty of time to stock the stores before Black Friday hits.

Still, interest in Kinect is high, as a survey by Black found that interest in Kinect as a holiday gift was exceeded only by the iPad. Microsoft has upped its forecast for Kinect sales, expecting to move 5 million of them over the holidays.

A British survey had somewhat different results for Kinect. While the iPad was still the number one item on holiday shoppers' minds, the Kinect only hit 5%. Apparently it's because the Kinect requires 6 clear feet of space for full functionality, and perhaps many places in the UK don't have that kind of space around where the console lives.

I'm glad to see Kinect demand high, though I wonder how much of that is being eaten from Wii sales rather than just reaching the current Xbox audience. The real test will be in 2011, once the initial "cool new device" enthusiasm dims. Will Kinect become an important part of the Xbox experience, penetrating the installed base? Will Kinect become a big enough sub-market that developers will spend extra time and money supporting it? Will Kinect drive more Xbox 360 sales at a time in its life cycle when it could sure use a boost? Numbers coming in next spring will tell us a lot more.

Microsoft needs to evangelize the Kinect hard among developers if it expects these kinds of things to happen. Developers will only support it if it's relatively easy to do, and they believe that supporting Kinect will provide an ample return on their investment. Microsoft needs to sell a lot of Kinects to make that happen. I think one of the key factors is whether or not Microsoft can get Kinect adopted for uses other than games. Can Kinect become a cool high-tech home feature by controlling more than just an Xbox game? Microsoft, get busy and answer that one.

Tuesday, November 9, 2010

Indie Games Win Xbox Live Victory

Breaking news... Microsoft has moved the Indie games category back into the games section on Xbox Live, after the tar and feathers were being prepared. Interestingly, this was done quietly, and not with a PR blast... even after Microsoft tried to defend the original move out of the games category.

Kudos to Microsoft for responding so quickly to an obvious mistake. A press release would probably be a good idea in order to put Microsoft's reasoning on the proper slant, at least from Microsoft's perspective.

Finding E-Books

As a corollary to my last post on finding digital products, I thought I'd talk about the problems of finding e-books. It's a related issue that's of concern to many authors, especially new ones. How will readers find my books? Fortunately, the tools for finding books have been refined much more than for finding games. Amazon has developed some great software behind the scenes that helps you find books you might be interested in, knowing what you've already purchased.

The problem with Amazon's tools, for instance, from the author's standpoint is that this is a black box. You don't know how Amazon figures this out, and there's no clear way to influence it. You don't know who will find out about your book, or how many of them. So it's not really something you should worry about. It just is, and hopefully it will be of some help.

Authors do face something of a conundrum. For the most part, they don't want to be marketers, or to become marketers. It's hard enough being a writer, and the time you spend marketing your book is time you could be spending writing another book. Yet you see books become bestsellers that you know aren't particularly well-written... so you figure it must be marketing, and if only you could add some of that magic pixie dust maybe your book would be touted by Oprah, too.

If only it was that easy... but there is a middle ground. Setting up a Facebook page for yourself as Author is pretty simple, and an easy way to get started. You'll have to spend some regular time adding to it, though, to make it work for you. Social media like Facebook and Twitter only help if you (or someone working for you) is using them to be social. (Authors may want to enlist a friend or big fan to help... but you have to monitor that to be sure you're getting the kind of help you want.)

Authors who make friends with other authors can cross-promote, if their fan bases are at all similar. The experiment that Draculas conducted was interesting and worked well on a number of levels.

I'm making notes towards a book to help authors market themselves. I think it's most important for authors to know how to get maximum marketing impact for the minimum time and effort. Authors should be spending time writing more books, and making sure they are the best they can be. A good series of quality books is a terrific marketing tool all by itself. Besides, they make money. Dean Wesley Smith, an author who blogs about such things, believes writers should write and spend a minimal amount of time marketing. I agree; if you don't enjoy marketing, don't really understand what it is you should be doing with it, then do enough to cover the basics and get back to writing. You might try to buy some marketing services and see if it brings in enough extra revenue to pay for itself. Otherwise, get back to turning out some books you can sell, and hone your craft.

Monday, November 8, 2010

Finding Digital Games

This is what happens when a game loses Facebook communications.
The biggest problem for game makers and gamers today is the same: How do you find good games? At least recognition of this issue is spreading. GameStop's head of digital business seems to be pretty clear on where the problems lie in digital distribution. Here's the money quote:

"One of the key points that can't be underestimated is the increasing challenge of discovery. If you start off with presumptions on the percentage of consoles that are connected, are they as high as everybody would want them to be? No. The percentage of people that have purchased for their console games downloadable content for XBLA or PSN games is very low. It's barely above ten per cent,” reports Petrovic as saying. "Discovery, much like in the Apple App Store, is as bad - if not worse - in the console environment because you've got such a limited form factor to work with."

Amen to that, brother. If you are annoyed at the iTunes store for its poor interface and weak search tools and almost non-existent help in finding apps you care about, you will become apoplectic when you look at the Android market or the console's lame excuse for a digital product marketplace.

Unfortunately, though GameStop would like to do something about this problem, they haven't mentioned exactly what they can do to help thousands of games find their way to gamers who would like them.  As a marketer I can come up with strategies to help an individual game break out of the sea of similar titles. But how you can do that for everything in the sea? Yet I see some companies making vague promises about ways to get your app in the top 100... of course, you have to pay them a big pile of money first. I guess that's right after you take care of that little bank transfer your new Nigerian friend wants you to help with.

Oprah can take an unknown novel and propel it to the top of the bestseller list... but she can't do that for every good novel, because if she promoted a thousand books the impact would be far less. A blanket solution to promoting all games is inherently flawed. I think the only logical solution for all games is for the service provider to do a better job, with a better interface design and better tools. I suppose Apple's gaming network is a step in this direction.

It's also possible a third-party like GameStop could step in and create something that would help customers find games they like. Or something already popular could help with this... Facebook continues to be the key factor in social media games and their popularity. (Notice how Monthly Average Users took a hit when Facebook started making it a little harder to get a zillion updates posted to your friends.) Check out here what happened to one social game company's users when Facebook cut off its communication channels. You can probably guess... the word "plummet" comes to mind.

It does come back ultimately to making sure you have a great game. Going viral is really only possible when that's true; you can throw all the marketing you like at it, but unless the quality's there in the first place you won't achieve orbit. Honestly, I'm glad we have gone behind the days of "We can sell dog crap in a box!". Now you have to have a good game... and then your marketing better not be the equivalent of dog crap if you want to get the most sales out of that game.

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Friday, November 5, 2010

E-Book Pricing Excites Discussion

E-book pricing is a hot issue among authors and publishers, because prices are all over the map. New York publishers would like you to pay somewhere between $7.99 and $15.99 for an e-book, the difference being in how new it is or how much in demand it is. Joe Konrath, a midlist mystery/horror writer, prices his e-books at $2.99. Who's right?

Many discussion revolve around "value", as in the proper value of an e-book should reflect the author's time and skill level. I think the more practical way to look at it is "How much will a customer pay for it?" Some publishers (and authors) think the pricing should be related to the length of an e-book. That certainly seems reasonable; the price I pay for a short story should be less than I pay for a long novel. But what should those prices be?

I don't think there is an easy answer. Some of the authors weighing in on the question feel the same way. Some take issue with the idea that their books should be $2.99, and argue for a higher price point. Author Dean Wesley Smith lays out a price structure that puts long novels at a higher price point of $4.99 to $5.99. One thing they all seem to agree on is that there isn't enough hard data to really answer the question of pricing.

A few things seem pretty obvious to me. New York publishers have their offices in Manhattan to pay for, an extensive staff, all sorts of expenses... while authors putting their own e-books online don't have to worry about those things. So prices those New York publishers choose for their e-books are rooted in their past, and their current situations... and should not be taken as gospel for an independent author.

Another good point is that a low price won't rescue a bad novel. The first thing an author has to do is make sure their work is good, because pricing and marketing won't transform it into a hit. Especially since, as barriers to entry lower, we're going to be seeing a lot more writing coming onto the market.

I think the most important thing about e-book (and other digital product) pricing is that you can easily experiment with pricing. There's no need to price-protect retailers, somehow notify all retail channels about the price change, make stickers to put over the price that's printed on the covers... you just change the price online. And change it back after a week and see if the sales have changed. Then see if it's made a difference after a month, or two. If you only sold 10 more copies by lowering the price $1, and you normally sell 100 copies, lowering the price doesn't help you enough. If you suddenly sold 500 more copies by lowering the price $1, then you should probably stick to the lower price point.

You can hold sales for any reason, and make the time period brief or long. The data you get will be invaluable. Especially because your data may not transfer to some other author. I would guess that Stephen King could charge more for a novel than I could because of his enormous brand value. But even King might want to have at least one book at a low price point in order to attract new readers.

The e-book market is still developing and changing, so don't look for a hard and fast answer on pricing. Look at the data; look at the deal you can land; take your best guess. Then, if you have control over pricing, experiment. See what works best for you. Don't just pick a price and never change it, because then you'll never know whether you were right or wrong.

Thursday, November 4, 2010

Social Games Adding Gambling

The fast-moving world of social gaming is heading to some interesting places. First off, a survey done by looking at Facebook ratings shows that users feel the games are becoming higher in quality. Or, perhaps, more adept at delivering what the users want, which is not necessarily the same thing. The survey looked at 5 games with at least a thousand ratings from users, and found that the ratings are generally rising, from 3.82 to as much as 4.5 or so. It's not clear what this can mean for developers, though it's certainly something you can tout in your marketing. There does seem to be a correlation between higher ratings from users and games that grow faster and have larger user bases.

While social games may be getting better, they are also changing their nature. One of the interesting new trends is adding gambling. Yes, games of skill tucked into social games, or just explicit games of skill, where you can wager your virtual dollars and hope to bring in more virtual dollars or prizes. The games, of course, always win... not only through a house edge, but from the fact that the user is spending more time on their site. And, of course, spending more virtual dollars.

The more explicit use of gambling is in the game shows, like Wheel of Fortune. The Game Show Network is at the forefront of this trend. It's yet another way to make money from games that are free to play, though of course you have to worry about fraud, and cheating, and a host of other issues which are not simple to solve. Which is why this technology is being offered as back-end support to social game companies, which you can expect to start signing up for as the revenue possibilities become clear.

The whole thing points up the absurdity of trying to ban Internet gambling. Not only is it difficult to control Internet access for your whole country (look at the effort the Chinese put into the Great Firewall, and that's still pretty porous), but even defining gambling gets much trickier in an age of virtual currency. Why not simply tax it and let it grow? Yes, gambling addiction (like other addictions) can ruin lives, but that's why you take some of the revenues and put it into treatment programs and education.

Anyway, the take-home message is that social gaming is evolving rapidly, monetization options are increasing, and this category will continue to grow faster than traditional gaming. Marketers take note.

Wednesday, November 3, 2010

Microsoft Vs. Indies

Microsoft has rolled out a new Xbox 360 dashboard, mostly to support Kinect and to look spiffier. But they've also made changes beyond the cosmetic, and in the process have ignited a firestorm among indie game developers. It seems Microsoft has moved the indie games out of the game store (where they have been, and you'd logically expect to find games). Now indie games are stuffed into the Specialty Shops, right next to the Avatar Clothing store. Seems eminently logical, doesn't it? But for some reason indie game developers aren't feeling the love.

Some developers feel that Microsoft was just stringing them along, allowing indie games as a way to get major publishers to support digital distribution. Now that they've got the major publishers trying it out, there's no need to clutter things up by allowing little tiny developers to use up space. Microsoft points out that hey, now they're showing the top 50 titles and not just the top 20 titles. Yeah, counter indie game developers, if anyone can even find the Indie Game store when it's not even with the rest of the games.

Developers who have been working on games for Xbox Live  and were getting near to release are especially angry, now that it looks like their games won't get much exposure. Many were hoping that they could move their games to Windows Phone 7, hoping for some strong connection between the two platforms. That may still happen, but Microsoft hasn't really said much about that.

I think Microsoft is making a mistake by sidelining the independent games. While the new dashboard is a little spiffier, it still makes it hard to find games. Much like iTunes and the Android Market and PSN and WiiWare... they all try different interfaces, and nobody's found a really good one yet. So it's up to the developer/publisher to try and get customers to come to the game. Not optimal, especially when you have tens of thousands of games to compete with on some platforms.

This incident also illustrates the dangers of dealing with a distribution channel. Sometimes the big dog scratches (like Apple or Microsoft) and the fleas get thrown off. Then again, if you didn't deal with a big distributor, you'd be left in the trackless wilderness of the Internet hoping for customers to stumble across your little game. Which brings us right back to marketing...

Tuesday, November 2, 2010

5 Keys To Naming Your Game

He's got a game company name.
Sometimes coming up with a name for a game is easy, but sometimes it's a long painful process. Often you'll have a name you used when you were developing the game, and that becomes the name almost by default. However you come by it, the name is an important part of your marketing effort, and there are some key factors to consider before finalizing the name of a game.

The name is a marketing tool. Don't choose a name just because you like it; make it work for you. The name may be the only point of contact a potential buyer has for your game, so the name may have to be memorable and sell the game all by its lonesome. That's a heavy burden for a name, and most won't be able to handle it by themselves. Choose a name that can work hard and it will make your marketing efforts easier.

Choose a memorable name. Since your name may be the only thing a buyer sees or hears, if they can remember it they can use Google to find it (hopefully). Only if they remember it, though. A bland, generic name is easily forgotten.  A game called "Word Hunt" may be descriptive, but it's not very memorable. "Scrabble" or "Hexalex" is a lot more memorable. (Hexalex is one of my favorite iPhone games.) A name that's both memorable and trademarkable is best.

Choose a trademarkable name. Unless you enjoy getting a cease-and-desist letter, you need to make sure your game name doesn't infringe on someone's existing trademark. And unless you like the idea of someone else using your game name as their game's name, you'd be well advised to get your own trademark. (If you're unfamiliar with trademark law, Nolo Press's web site is a good place to start; I highly recommend this book: Trademark: Legal Care for Your Business & Product Name). If you ever wondered why some product names have funky spelling, the reason is trademark law. An unusual spelling can transform a common word into a trademarkable term, and it also helps make it more memorable. If you want to see if your name is already in use, check out the US Patent Office web site. You can search for the name you have in mind. Remember, though, if your name is trademarked in a category other than games, you may still be able to use it. Nothing's completely cut and dried, though. If you have a lot of money at stake, consulting a trademark attorney is a very good idea.

Choose a descriptive name. Or at least one that has some relation to what your game is about, or what it's like, or the emotion you want to generate. A random sequence of consonants may be trademarkable, but it's probably not too memorable and certainly not descriptive. (Rules can be broken, though... XKCD is a great web comic, with the name specifically chosen to be unpronounceable, and the quality of the comic has made it memorable.)

Think about the future. Will you be creating more games in a series? Is there an overall title and a subtitle that you want to use? How about your company name? (All of this discussion should apply to your company name as well as any game name.) Check out this post on Kotaku about naming game companies... it will sound familiar to those who have looked for names.

Really, choosing a name for a game is easy. Just stare at a screen until drops of blood form on your forehead, and press the keys they fall upon.

Monday, November 1, 2010

3DS Online Shop

Nintendo has figured out that their online shopping for the Wii and the DS might be less than optimal, so they're planning to improve the experience for the 3DS. They're changing the interface, adding videos and more information, and even allowing (gasp!) user ratings. Software you buy will be downloaded onto a 2 GB SD card (apparently included with the 3DS). You can (somehow) transfer previously purchased downloaded titles from the DSi to your 3DS.

Iwata-san even mentioned that there will be 3DS software for download... though I'm not sure he meant titles that would also be available on cartridges in stores. The real revolution will be when you can buy all software from your 3DS and never have to go into a retail store, and when all your games can be stored digitally in your 3DS so you never have to worry about which game you have with you.

Though Nintendo has even bigger plans for shopping: shopping for real stuff from your Wii, according to this post. Pretty neat, you can actually shop for goods on your TV screen. Imagine if you could do that from your computer, or even somehow hook your computer up to a TV and do that! Oh, wait a minute... something tells me this may not be an entirely new idea.

Here's what their press release says the selling points are:

  • Ease of use through the Wiimote
  •  Customers can enjoy shopping 24 hours through their television.
  • The service will offer over 10,000 items, from including food, fashion and furniture.
  • The service will offer exclusive items that will not be sold elsewhere.
  • Buyers will be able to make payments via credit card, cash on delivery and payment at nearby convenience stores.
  • The service will also allow orders to be placed via the phone.
No word on whether they'll try something like this outside of Japan. I don't think the Home Shopping Network needs to be worried though. Or Amazon. I guess for Japan it's revolutionary, though.

I'm not sure that Nintendo is inventing the future any more; seems more like they're inventing 1997.