Here's an interesting bit of news: According to TechCrunch, Google has invested $100 million into Zynga, with the intent of making it the cornerstone of their upcoming Google Games. Zynga has been racing along, with a rumored $350 million in revenue last year, half of which was operating profit (!). Now, you might ask why Google is getting into games? A number of reasons spring to mind. Social games, for one thing, are an amazingly fast-growing market segment with intense profitability. So are mobile games. And what company would Google be trying to outmaneuver in the social networking space? Facebook, of course, and they and Zynga aren't getting along all that well right now.
Add in the upcoming Google TV revolution that could steal serious market share from console games, and you can see the outlines of a strategy here. (Plus it helps block Apple's march to world domination along the same path.) Talk about your battle of the titans... this is going to be an interesting scrum, as heavyweights like EA join the fun with Facebook, Apple, and Google.
One winner I can predict for sure: Consumers are going to have more gaming choices, and probably at lower prices, than ever before. I think gaming is going to be an ever larger share of overall leisure time, taking a bite out of TV watching for one thing. We'll have to see how this strategy unfolds, and particularly how the various players intend to make money. Will social gaming continue to have legs? Sure looks like it at this point...
Monday, July 12, 2010
Friday, July 9, 2010
Free Apps! Why?
Many developers are giving away their apps for the iPhone or Android markets, as this article shows in detail. In fact, the Android market is 57% free, while the iPhone market is 28% free. (The average price paid for an app is about $4, though this is skewed by some rather pricey apps at the high end.) Why should developers give away their hard work, and why should you consider it too?
Marketing is the answer. Standing out in a forest of 225,00+ apps (iPhone) or 70,000+ (Android) is difficult; there are almost certainly several apps that do pretty much the same thing as yours, and if there aren't, and yours is a good idea, there soon will be. People are more likely to try your app if it's free. But how do you make money if it's free?
The free version is usually a demo of some kind; there's almost always a paid version with more features available. The hope is that you'll try the free one, like it, and then pay a few bucks to get the better version. A variation of this is free-to-play; you can play the game for free as much as you like, but there are in-game items (such as a better weapon) available for money. Only a small percentage of players pay for those, but it's enough to pay for all the rest of the players.
Some free titles don't have a paid version. What's up with that? Sometimes it's just to be funny (like the vuvuzela apps that showed up). As a marketing tool, such a free app can be a useful way to get your name out there and possibly bring people in to your web site and other ways for you to make money. A popular version of this is the business that has a free app in order to encourage your use of their services; banks, for instance.
Of course, some apps are free because they are supported by advertising. So click on an ad once in a while if you like a game; you'll be helping them out.
Consider how a free app might help out your business model; consider it as another marketing tool.
Marketing is the answer. Standing out in a forest of 225,00+ apps (iPhone) or 70,000+ (Android) is difficult; there are almost certainly several apps that do pretty much the same thing as yours, and if there aren't, and yours is a good idea, there soon will be. People are more likely to try your app if it's free. But how do you make money if it's free?
The free version is usually a demo of some kind; there's almost always a paid version with more features available. The hope is that you'll try the free one, like it, and then pay a few bucks to get the better version. A variation of this is free-to-play; you can play the game for free as much as you like, but there are in-game items (such as a better weapon) available for money. Only a small percentage of players pay for those, but it's enough to pay for all the rest of the players.
Some free titles don't have a paid version. What's up with that? Sometimes it's just to be funny (like the vuvuzela apps that showed up). As a marketing tool, such a free app can be a useful way to get your name out there and possibly bring people in to your web site and other ways for you to make money. A popular version of this is the business that has a free app in order to encourage your use of their services; banks, for instance.
Of course, some apps are free because they are supported by advertising. So click on an ad once in a while if you like a game; you'll be helping them out.
Consider how a free app might help out your business model; consider it as another marketing tool.
Thursday, July 8, 2010
Reviews Matter, Study Shows
A new study by industry analysis firm EEDAR shows that videogame reviews do influence sales, and that influence even extends to people who haven't read the review -- because people who did read the review would recommend the game to a friend. Now, the study was only based on one game (Plants Vs. Zombies), and there are holes in the methodology. But it does seem to be another indicator that reviews are important to sales.
Also found in the study is that a demo of the game, if it's good, can overcome a negative review. Which argues for releasing a demo of your game (assuming, of course, that it's a good game and a good demo).
As a game publisher, you should strive to get your game widely reviewed. You should know the web sites that review games like yours, even if they only cover such a game occasionally. Find out how games are chosen for reviewing, and submit your game. Be prepared to use quotes from reviews, and ratings, in your marketing materials.
Of course, I'm assuming here that you get some good reviews. If you don't, you can just ignore them, though in the long run you're better off trying to figure out why you were criticized and fix those issues in a future release. (The real contrarian strategy here is to feature the bad reviews... "Find out why this game rated 65! So bad it's amazing!" Good luck with that...)
Also found in the study is that a demo of the game, if it's good, can overcome a negative review. Which argues for releasing a demo of your game (assuming, of course, that it's a good game and a good demo).
As a game publisher, you should strive to get your game widely reviewed. You should know the web sites that review games like yours, even if they only cover such a game occasionally. Find out how games are chosen for reviewing, and submit your game. Be prepared to use quotes from reviews, and ratings, in your marketing materials.
Of course, I'm assuming here that you get some good reviews. If you don't, you can just ignore them, though in the long run you're better off trying to figure out why you were criticized and fix those issues in a future release. (The real contrarian strategy here is to feature the bad reviews... "Find out why this game rated 65! So bad it's amazing!" Good luck with that...)
Wednesday, July 7, 2010
Xbox Live hits $1 Billion in Sales
The interesting part about this article from Bloomberg is that more than half of Xbox Live revenue comes from something other than subscriptions. Sure, there's 25 million people who pay for the yearly subscription (heck, I'm one of them). But now revenue has topped $1.2 billion, and that comes mostly from downloads of movies, games, avatars, and other such stuff (map packs, anyone?).
This week Microsoft plans to revise the interface and update the search capabilities; it'll be interesting to see how that works. Will we see more game sales? Will indie games do better? Or is this going to be more about movie sales?
Microsoft is wise to put some effort in here, as the family room is going to be a major battleground for consumer companies. They have a big lead now, but that could easily evaporate if they come up against a superior business model. (For an example, see how Blackberry and Nokia market shares have been vaporizing in the face of iPhone and Android... it's not just the hardware that's causing it.)
I'm still wondering if any of these market-makers (Microsoft, Apple, Google, etc.) are planning to help app creators with marketing tools, or if they will continue to be left to their own devices. Amazon, for one, seems to be interested in offering authors, at least, some help in promoting their books. It seems like a win-win... so why doesn't that idea get picked up by other companies?
This week Microsoft plans to revise the interface and update the search capabilities; it'll be interesting to see how that works. Will we see more game sales? Will indie games do better? Or is this going to be more about movie sales?
Microsoft is wise to put some effort in here, as the family room is going to be a major battleground for consumer companies. They have a big lead now, but that could easily evaporate if they come up against a superior business model. (For an example, see how Blackberry and Nokia market shares have been vaporizing in the face of iPhone and Android... it's not just the hardware that's causing it.)
I'm still wondering if any of these market-makers (Microsoft, Apple, Google, etc.) are planning to help app creators with marketing tools, or if they will continue to be left to their own devices. Amazon, for one, seems to be interested in offering authors, at least, some help in promoting their books. It seems like a win-win... so why doesn't that idea get picked up by other companies?
Tuesday, July 6, 2010
Narrow Your Focus For The Win
Your natural inclination is to want everyone to buy your product. You love your product (since you probably created it), and you would want everyone to purchase one... maybe two, so they can give one to a friend. Why, if everyone in the world bought one, you'd be rich! Alas, all products have a market size that is less than the total population of the planet... usually orders of magnitude less.
The real trick is to realize that you can market more effectively by narrowing your focus. Instead of writing your copy to appeal to all possible buyers, look at a subset. Perhaps instead of "all gamers" you look at where your marketing message is going. (In the good old days, that would have been a magazine that would cheerfully provide their demographics for the asking. Now, if you're targeting a web site, they may well not have such information handy... so you'll have to ask for their best guess, or make your own.) You determine that for this banner ad buy you're thinking of, the likely readers are males between the ages of 18 and 25. Then you can keep that in mind as you pick your words and images... then find some 18-25 year old males to ask if your banner ad makes sense, or if it appeals to them. (Nothing like real-world data to inform opinions.)
Don't waste your money trying to create an ad or even a press release that's trying to appeal to everyone. Know your audience, and focus on what's important to them. If you want to appeal to a different demographic, craft a message just for them. Maybe different features of your product are more important to women aged 18-25, so you highlight those features in an article directed at women of that age.
The real trick is to realize that you can market more effectively by narrowing your focus. Instead of writing your copy to appeal to all possible buyers, look at a subset. Perhaps instead of "all gamers" you look at where your marketing message is going. (In the good old days, that would have been a magazine that would cheerfully provide their demographics for the asking. Now, if you're targeting a web site, they may well not have such information handy... so you'll have to ask for their best guess, or make your own.) You determine that for this banner ad buy you're thinking of, the likely readers are males between the ages of 18 and 25. Then you can keep that in mind as you pick your words and images... then find some 18-25 year old males to ask if your banner ad makes sense, or if it appeals to them. (Nothing like real-world data to inform opinions.)
Don't waste your money trying to create an ad or even a press release that's trying to appeal to everyone. Know your audience, and focus on what's important to them. If you want to appeal to a different demographic, craft a message just for them. Maybe different features of your product are more important to women aged 18-25, so you highlight those features in an article directed at women of that age.
Friday, July 2, 2010
Traditional Console Game Sales Continue Lame
May sales for the traditional game industry were disappointing. While Red Dead Redemption and Super Mario Galaxy 2 sold well, everything else underperformed. Several high-profile games failed to hit 200K in sales, as was expected. It looks like gamers are making the big hits bigger, but they're not spending their money on as wide a variety of titles.
Which makes sense in hard economic times. Consumer spending in general is down, so it's not surprising that gamers are being more careful with their dollars. This is probably also a factor behind the rise in free-to-play games, and lower cost games in general.
If this is the new reality, how should publishers adapt to it? Currently they don't seem to be changing anything, except perhaps hoping that increased marketing budgets might make one of their titles into the lucky few superstars. A more logical effort that can be implemented in a short timeframe might be to produce more DLC for your hit titles, both to encourage sales of the title and to bring in more revenue.
In the longer view, making investments into new growth areas of gaming makes sense, and Electronic Arts has been doing this. Taking some of their marquee titles (like FIFA) into the social gaming arena is a good first step. We'll know real change is happening when we see EA turn Madden into a subscription model game.
For smaller publishers, these May sales are one more indicator that change is continuing to occur in the marketplace. Big publishers keep hoping things will turn around, but the more time that passes without a turnaround, the more likely it is that consumer behavior is changing permanently. Which is only good for companies that recoginze that change and adapt to it.
Which makes sense in hard economic times. Consumer spending in general is down, so it's not surprising that gamers are being more careful with their dollars. This is probably also a factor behind the rise in free-to-play games, and lower cost games in general.
If this is the new reality, how should publishers adapt to it? Currently they don't seem to be changing anything, except perhaps hoping that increased marketing budgets might make one of their titles into the lucky few superstars. A more logical effort that can be implemented in a short timeframe might be to produce more DLC for your hit titles, both to encourage sales of the title and to bring in more revenue.
In the longer view, making investments into new growth areas of gaming makes sense, and Electronic Arts has been doing this. Taking some of their marquee titles (like FIFA) into the social gaming arena is a good first step. We'll know real change is happening when we see EA turn Madden into a subscription model game.
For smaller publishers, these May sales are one more indicator that change is continuing to occur in the marketplace. Big publishers keep hoping things will turn around, but the more time that passes without a turnaround, the more likely it is that consumer behavior is changing permanently. Which is only good for companies that recoginze that change and adapt to it.
Thursday, July 1, 2010
Microsoft, Nintendo's Barriers to Entry
Creating console games has been something that big companies do, or smaller companies only when they have a contract with a big company. Historically, console makers charged big bucks for development systems -- upwards of $50,000 not so long ago, and more than that you had to apply and they had to accept you. Then each game had to pass an evaluation in order to be cleared for manufacturing... which took months and cost a lot of money to manage.
You'd think it might be easier these days, at least for developers creating games for the online stores of Sony, Nintendo, and Microsoft. Hah! This interview with some local developers in Santa Cruz has them recounting the lengths they had to go to... posting videos on YouTube to get Nintendo's attention, waiting 5 months just to get to talk to someone at Microsoft. With all that, they still don't have an easy path to success. Imagine how difficult it would be to post an update or an add-on to a game.
Contrast that with Apple's process. You want to be an iPhone developer? OK, $99 gets you the development software. You'll need a Mac to develop on, which would run you another $700 if you don't have one. Build your App and upload it, and wait for approval. Usually it's less than a few days, and your product is in the store. Of course, you have to tell the world about it, and bring the customers in... Apple is no help there. But at least they don't get in your way.
Sony, Microsoft, and Nintendo are all failing to take advantage of the next great revolution in software. The App market has been a huge success, by lowering barriers to entry and creating a vast array of free and low-cost titles that are easy to download and install. This is all possible in a family room, but the Big Three are still too locked into their retail partners and $60 software pricing. They fear a rebellion by their retail partners and third-party developers if they tried to open the floodgates to small developers and free-to-play software.
Apple and Google face no such limitations... I'm sure the AAA titles on consoles will still attract an audience, but there is going to be some big changes coming and the landscape will look very different in a few years.
You'd think it might be easier these days, at least for developers creating games for the online stores of Sony, Nintendo, and Microsoft. Hah! This interview with some local developers in Santa Cruz has them recounting the lengths they had to go to... posting videos on YouTube to get Nintendo's attention, waiting 5 months just to get to talk to someone at Microsoft. With all that, they still don't have an easy path to success. Imagine how difficult it would be to post an update or an add-on to a game.
Contrast that with Apple's process. You want to be an iPhone developer? OK, $99 gets you the development software. You'll need a Mac to develop on, which would run you another $700 if you don't have one. Build your App and upload it, and wait for approval. Usually it's less than a few days, and your product is in the store. Of course, you have to tell the world about it, and bring the customers in... Apple is no help there. But at least they don't get in your way.
Sony, Microsoft, and Nintendo are all failing to take advantage of the next great revolution in software. The App market has been a huge success, by lowering barriers to entry and creating a vast array of free and low-cost titles that are easy to download and install. This is all possible in a family room, but the Big Three are still too locked into their retail partners and $60 software pricing. They fear a rebellion by their retail partners and third-party developers if they tried to open the floodgates to small developers and free-to-play software.
Apple and Google face no such limitations... I'm sure the AAA titles on consoles will still attract an audience, but there is going to be some big changes coming and the landscape will look very different in a few years.
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