Entries from February 2008 ↓

I have been there far too many times. When the marketing pie for a game is sliced up. So much for print, so much for point of sale, so much for online and so on. The division of the money owes nothing to science (or even art) and owes just about everything to politics. Of course the result is that marketing departments often deliver horrendous value for money. But nobody seems to mind.

As a rule of thumb (and ignoring games that are extremely good or extremely bad) 50% of the sales success of a game is down to the marketing department. And 50% is down to the game itself. So it would only be fair if the spend was split equally between the two. This is where small publishers are at a huge disadvantage, there is no way that they can spend anywhere near as much on marketing as they do on development. Big publishers have a powerful global reach and so can afford, if they want to, to spend far more on marketing a game than making it.

At Codemasters the greatest marketing success we had was when the company was in dire straits. Piracy destroyed the PSX market in just a few months and suddenly we had no income. A lot of people lost their jobs because there was no longer enough money to pay them. And we had to market Operation Flashpoint with a budget that was close to zero. So there was no pie to be sliced.

What we did was to engage with our potential customer base using PR and online and especially community. The driver was the monthly press release. This was then used as the core of the monthly email newsletter and as the focus for online discussion. We gradually built an online following that became like a snowball rolling down a mountain. So that at launch Operation Flashpoint was the number one PC game  in every market with a chart. A global success.

In fact having a big budget for marketing usually leads to far less value for money. The marketing department feel that they have to burn through the money. So they do really silly and expensive things like TV advertising campaigns for gamer’s games. The waste of money is horrendous.

If you market every game the same or just using the obvious tools out of the marketing mix your campaign will just disappear amongst all the other campaigns doing the same thing. So you need to spend more and you have to be on top of your game with everything you do just not to get buried. Whereas if you do something different you will get noticed and get far more marketing exposure for a fraction of the spend.

Richard Branson understands this. When building Virgin Atlantic airline he pulled off a series of high profile stunts with speedboats and balloons across the Atlantic. He spent a fraction of the marketing budget of competitors like British Airways yet got many times the marketing exposure.

In the game industry I have always been a fan of Larry Sparks (now VP Marketing at Square Enix) who has pulled a lot of excellent game promoting stunts. One time he got a group of people to change their name by deed poll to that of an upcoming game. This got the game a huge amount of coverage and cost very little indeed. We need far more of this in the games industry. The games are fun and the marketing should be too.

One of the most amusing features of this industry is the fanboys. On every forum they strut their stuff as the world experts on everything. Yet in reality they know very little, just what they glean secondhand from the internet. And they all want to grow up to be game designers, yet they have no idea just how few game designers there are in the world and how much dedication and sheer hard work it takes to get there. They don’t even know what a game designer actually does.

A feature of the fanboy is their irrational love for a brand of game console. An unconditional love that will suffer no criticism, no matter how fair and how slight. A blinding love that prevents them seeing any virtue in any other brand, no matter how much it is deserved. A part of this love comes from their emotional and financial investment in their console and the games for it. This represents the bulk of their income and the bulk of their leisure hours. Another part of this love comes from the fact that they haven’t discovered girls yet. When they do, and this can happen as late as their 20s or even 30s, they desert their console overnight for a new love that is even more demanding and even more expensive.

Another feature of fanboys is that they are keyboard warriors with unbounded aggression and disdain. This is all down to hormones and adolescence. Their bodies are telling them that they are men yet society tells them that they are still children. So they strut their stuff online, where they can’t be seen, like they are on some tribal rites of passage. Not realising how ridiculous they appear to those who are older and wiser.

There is much fun to be had from fanboy baiting. When the slightest insinuation will start a flame war imagine what a deliberate, well placed insult will do. They take the bait hook, line and sinker. In fact it is so much fun that I am sure that a good percentage of what appear to be fanboys aren’t fanboys at all. Just wind up merchants having some good sport.

But these fanboys serve an important function. They spend every penny they can on this industry. They are also the self appointed schoolyard experts who inspire many of their peers also to invest in gaming. And they are the people who create the online buzz that is so exciting and which helps to make this industry so dynamic. So don’t mock them too much.

For those who don’t know Jack Thompson is a rabidly anti game American lawyer who has been repeatedly discredited.

After the tragic Virginia Tech shootings he went on Fox News (no surprise there) and blamed the killings on video games. With no facts or evidence to support his claims. The game site Kotaku totally debunked his claims.  And when the board of enquiry totally absolved video games from any blame did we get Jack Thompson and Fox News apologising? Obviously not.

Now he is at it again. And (huge surprise) it is on Fox News once more. Now they describe him as a “School Shooting Expert” as he firmly lays the cause of the Northern Illinois University  shootings on video games. With absolutely no proof or evidence of any kind.

What is wrong with Fox News that they repeatedly allow such abysmal levels of untruthful journalism? What is wrong with America that such a tragedy can be used as a vehicle for a rabid self publicist?

Massive, obviously. It is reviewing as being one of the best games ever. A major coup for Nintendo, following so close after Super Mario Galaxy (SMG) and preceding Mario Kart. This is like an AAA production line and will do much to give the Wii a far higher attatch rate than many (including me) were expecting.

So it has sold 840,000 in it’s launch week in Japan, getting to a million after eleven days. And with expectation at a fever pitch it will definitely launch at number one in America and Europe. But will it be one of the biggest games of 2008? No, and the reasons are obvious. They are the same reason that SMG, also one of the best reviewing games ever, was only number 30 in the UK sales chart for the whole of last year.

Basically Super Smash Bros, Brawl (SSBB) and SMG are gamer’s games. They are mainly bought by people for whom gaming is a hobby. And whilst many Wii owners are gamers, most of them aren’t. Most Wii owners are casual game players, and whilst some of these may well be interested in SSBB, most won’t be.

A major difference between gamers games and casual games is the profile of sales over time. Gamers games sell massively at launch but after just a few weeks they are selling very few. Casual games just sell steadily and keep on selling. Just look at how long Brain Age has been in the charts, for instance.

Another thing against SSBB is that there are a lot more HD consoles (Microsoft Xbox 360 and Sony Playstation PS3) in the world than there are Wiis. And most HD console owners are gamers. So gamers games brought out on both HD consoles have the potential to massively outsell SSBB, even if they are not as good as games. GTA IV will sell several times as many as SSBB. And by the end of the year there will be many HD titles that feature on the annual charts ahead of SSBB.

But it is not just the HD titles that will outsell SSBB. There are Wii titles that will.  The casual titles. Wii Fit for instance. Admittedly it took a few weeks to sell it’s first million in Japan, but this was because it was supply limited, they couldn’t make enough Balance Boards. They probably won’t be able to make enough to meet worldwide demand for some time. Meanwhile it will keep on selling. Week after week, month after month. After SSBB is long forgotten Fit will still be in the charts. So by the end of the year it will be well ahead. Maybe by a factor of two or even three.

Also, from Nintendo’s point of view, Fit is a lot more important than SSBB. Because Fit will be a system seller bringing the Wii to whole new demographics. Whilst SSBB will mainly sell to existing owners.

There’s a lot going on just now. Too many stories that wouldn’t wait!

• Nintendo Lost an Estimated $975 Million to Piracy in ’07.  Gives you an idea how much is stolen out of the games industry. And it could get a lot worse. The DS is moving over to a free to play, den of thieves business model. And the hackers have just about cracked the Wiis anti piracy protection.
• Analyst predicts new Xbox by 2010. Yep, it’s time to start thinking seriously about the next generation. I have an article in the works on this.
• Xbox failure rate 16%.  Across a 1,000 machine sample. But this will include both 90nm and 65 nm CPU machines. In reality it is possibly closer to 30% on the former and 3% on the latter. One thing is for sure, the term RRoD will live forever in the gaming lexicon. And it will be associated with Microsoft.
• PC gaming in ‘disarray’. According to Epic’s Cliff Bleszinski. We all know why this is, “customers” prefer to download their games for free rather than help to pay for them being made. Even selling PC games far cheaper than console games doesn’t stop the many millions of thieves.
• God botherers do 180 degree turn. Last summer they were slagging Sony off in public for having Manchester Cathederal in Resistance: Fall of Man. Now they are full of praise for the extra visitors it has brought. Religion hypocritical, surely not?
• Xbox sold out in lots of retail. What’s happening here? Are Microsoft gearing up for a price or model change? Did they just screw up predicting demand? Is there a production problem? They need to get this sorted very quickly. GTA IV is imminent and demand for 360s will go through the roof.
• God of War sex scene set to reignite media attacks? Naked female breasts in an adult rated game. This is what we want! The game industry should treat adults like adults. And we should sit back and enjoy the sight of Fox News and the Daily Mail bursting blood vessels.
• EA form strategic alliance with IMG. They will both benefit lots from this, there are lots of exciting possibilities. It is a further example of video gaming becoming a mature industry and integrating into the real world.

Whilst the outside of a console may remain unchanged through many years of production the internals go through multiple revisions. Some of these are forced, such as when Microsoft tried to stem the Red Ring of Death (RRoD) epidemic last year. But mostly they are to reduce cost. Component count reduces with greater integration and the PCB gets smaller and smaller. A by product of this is less energy consumption, so less heat removal measures are needed and a smaller power supply can be used, both of which save yet more money.

With the current console war being fiercer than ever before, both Microsoft and Sony are putting a lot of work into reducing their manufacturing costs. They know that this gives them room to cut retail prices to gain a competetive advantage. Or to pull back from a competetive disadvantage imposed by the competition. Sony have an advantage here because they have decades of experience of reducing costs in consumer electronics. This is a core competence to them. Microsoft are primarily a software company so are at a natural disadvantage. They have countered this by running a very high powered cost reduction team since day one of the Xbox 360.

It is only recently that I reported here that both manfacturers had improved their Central Processor Unit (CPU) fabrication technology from 90nm to 65nm with consequent reductions in power usage and, for Microsoft, a solution to their RRoD problem. So it is amazing that Sony have now announced a further improvement to 45nm technology. This gives them a massive 40% further reduction in chip power requirements. Because this is IBM fabrication technology, you can be sure that the Xbox 360 CPU will be going the same way.

The second big chip in these consoles is the Graphics Processing Unit (GPU) which lags somewhat behind in fabrication terms, still being 90nm in the Playstation PS3. This is said to be coming down to 65nm at the same time as the 45nm CPU introduction. Presumably Microsoft are in a similar position.

But it’s not just the chips. Sony are at a huge cost disadvantage with their Blu Ray drive in the PS3 compared with the much cheaper DVD in the Microsoft Xbox 360. So they have driven the manufacturing cost of this part down too. Most recently with the introduction of a far smaller and simpler laser diode. More problematic is the hard drive. Firstly because the base Xbpx 360 doesn’t have one whilst the base Playstation PS3 does. Secondly because the business model of hard drive manufacturers is not to drive down costs. Instead they raise disk capacity whilst keeping costs the same.

So now you can see the mechanics behind the upcoming price war. It will be interesting to see how quickly the base 360 gets to $199.

• Apple make very significant trademark filing. Extending cover to: “hand-held units for playing electronic games; hand-held units for playing video games; stand alone video game machines; electronic games other than those adapted for use with television receivers only; LCD game machines; electronic educational game machines; toys, namely battery-powered computer games”. This will come as no surprise to regular readers here.
• EA creates new studio to tap into social networking. Once again regular readers will appreciate the significance here. Social networking and gaming are converging and EA are going to make money out of it. You really can’t fault the way that EA is being morphed into a forward looking publisher, they are doing all the right things. This is a big positive change from the EA of old. No wonder they think they can get to $6 billion turnover by 2011.
• Microsoft will “own” the GTA IV launch. According to one of their top executives. And I believe him. This is going to be one of the decisive moments in the console war for this generation and Microsoft should win it convincingly. Now we hear that the 360 version will have exclusive multiplayer elements. Sony can’t be happy.
• Microsoft buy cellular phone software company. So it doesn’t take Einstein to figure out which way Zune is going. We are headed towards the integrated pocket device and Microsoft are going to make one.
• Yahoo rejects Microsoft advance. Which is pretty stupid. Yahoo have been going downhill for ages and there doesn’t seem to be anything that will stop the slide. Combined with Microsoft and re-energised they might be able to take on Google. Might. This rebuff leaves plenty of money in the Microsoft coffers for the purchase of Sega.
• Atari continue their slide into the abyss. Even if they were healthy, and they are very far from being so, they are just too small to survive in a market which has ever increasing benefits of scale. Their only hope is that they get bought. Infogrames has stripped them of their IP in previous support operations so the only thing of value that is left is their excellent North American distribution system.
• Valve reveal their reasoning behind Steamworks being free to developers. And it’s nice that they are so open about it, so everyone knows where they stand.
• And finally a little gem. Wii games get significantly lower average review scores than HD console games. It’s simple really, too many publishers put shovelware on Wii. And Nintendo let them.