Exclusive: GamesBeat’s Dean Takahashi

BY

By Meelad Sadat

VentureBeat ventured into game industry coverage with little fanfare. It didn’t lure away an army of well-known editors from game sites. It didn’t promise to revolutionize game press. It didn’t unleash a slick branding campaign. It launched as a one man show, hiring veteran games business writer and author, Dean Takahashi. So subdued was the effort that as Takahashi puts it, he wasn’t even sure games were going to be his beat.

“When I joined VentureBeat four years ago I thought I was going to stop covering games because there was no such thing as a venture capitalist investing in games,” says Takahashi.

But he adds that, to his surprise, things drastically changed during his time at the site. Games are now considered serious endeavors with big upside potential for VC and angel investors. Facebook and Zynga have helped. So have the slew of startup successes feeding off of the growth of digital distribution.

During the same period of time, VentureBeat’s foray into games became a success story in itself. Today, the site’s GamesBeat section is a fully-staffed, well-read media outlet covering games from both business and product standpoints, including offering up comprehensive game reviews. Over the past year it’s added game press talent to its roster, with Dan Hsu, Sebastian Haley, and a staff of hardcore gaming freelancers from Hsu’s crowd sourcing site Bitmob. GamesBeat is also now the organizer of an eponymous annual conference gathering game industry heavyweights.

With GamesBeat 2012 {link no longer active} on the horizon in early July, we talked with Takahashi about their growth, and about his views on drastic changes in the industry and even the changing face of E3 in the four years since the site launched.

[a]list: Tell me a little bit about the growth of GamesBeat over the past few years.

Dean Takahashi: Venture Beat has been tripling its traffic every year. We finally got big enough in the past year or so to take on GamesBeat as a real, second site and a new project. That has grown dramatically for us. We expanded by bringing Sebastian Haley as our review editor back in October, and Dan Hsu started earlier this year for us. They brought with them a lot of freelance writers from the crowd source site that we acquired, Bitmob, which Hsu was running. That’s given us a very large writing staff for covering games. At E3, we had nine writers and editors this year. A year ago, this time, we had three writers at E3.

[a]list: GamesBeat has become a bigger and bigger part of a site that’s geared towards the venture capital community. Does that success you’ve had with readership reflect growing interest in the game industry among VCs over the same period of time

Dean Takahashi: Definitely. When I joined VentureBeat four years ago I thought I was going to stop covering games because there was no such thing as a venture capitalist investing in games. Not so long after that social gaming exploded on Facebook and the venture capital started flowing. Now we’ve got a couple of IPOs, and a couple billion dollars on top of that invested into more than a hundred game startups. That sort of came out of nowhere the past four years, surprised everybody, surprised me. Clearly games have turned into one of the great investments in the last few years, alongside things like Facebook and Apple. The growth of apps, the disruption that has resulted for traditional games because of social, mobile and online is really fueling the growth. We’ve tried to cover that disruption or that change a lot more closely than other publications.

[a]list: Let’s talk about your upcoming GamesBeat conference. You’re in your fourth year, and that’s arguably the most transformative four years in the history of games. Looking at your conferences year over year, how would you sum up the major changes and trends over that period of time?

Dean Takahashi: We’ve found a big crowd who’s interested in the cutting edge of games. That’s where we target all of the speakers and the panels. We had Mark Pincus from Zynga on one of our panels at the 2009 conference, and he’s coming back as a multi-billionaire as a fireside speaker at this conference. Last year we focused on mobile games in particular because there was this theory that Zynga was dominating Facebook and so the wide open territory for startups to invest in was mobile. A lot of those happened.

Now we have this theme for this year’s conference that it’s the cross-over era, where the different barriers that have held up over the years between the different segments of the game industry are all coming down. The web itself has obliterated them, and there’s a lot of movement back and forth between console, social and online now. This year’s conference has a lot of speakers from big game companies, the traditional ones, as well as the disruptive startups. We always try to focus the conversation on what’s on the cutting edge and what’s disruptive.

[a]list: One of the areas that could be somewhat disruptive is this growing idea that there’s a market for core games on mobile or tablets, and that there’s going to be this category called mid-core with games that look like console games to an extent but are designed specifically for mobile platforms. Do you think this is a significant opportunity and is it right for developers to target it?

Dean Takahashi: I think there are definitely some great examples of success on that front. Funzio had pretty good success with a string of games. They went three for three above a million users on iOS. Kabam has had great success with Kingdoms of Camelot: Battle for the North. There are other hardcore games out there like Infinity Blade from Epic and ChAIR Entertainment. Those games are proving that hardcore gamers are on the platform and they want to play games. As you said, mid-core is sort of like a ratcheted down experience because it is a different type of platform where you play for a shorter amount of time. So those kinds of games are making sense for sure. I think we’re just at the beginning of this.

[a]list: If you were to define the kind of core gamers that are playing these games on mobile, who is it, is it gamers filling up their time away from consoles or is there an actual migration happening?

Dean Takahashi: I think it’s everybody because these games and other free-to-play games can reach a much wider net and a wider audience because that barrier isn’t there where you have to pay sixty bucks for this game. That creates a very large funnel for the game companies that are grabbing just anybody they can, and then it narrows down based on who’s willing to pay for something like virtual goods in a game through micro-transactions. That becomes more the core group of fans gathered around different titles. It’s an interesting blend because those hardcore players wouldn’t be there if the game wasn’t populated, if there weren’t many players in it. The large majority of players aren’t monetized there but they provide a valuable function by making the game feel very popular and populated.

[a]list: What are your views on the sudden growth of Kickstarter and crowd-funded projects in the game industry, is it a threat to traditional investing?

Dean Takahashi: It’s a much needed breath of fresh air for funding games in the middle layer of gaming. The blockbuster games get all of the funding they need from major publishers. The small indie games don’t take much money, and so a group of just a few people can work on them and get something to market. But this middle layer of publishers and developers who didn’t have gigantic hits but have games that deserve sequels or properties in need of a reboot, those are the ones cashing in pretty big on Kickstarter. The big thing about Kickstarter is that it comes from the fans, and the fans can validate the idea of doing a game. Like the revival of Wasteland that Brian Fargo is doing. He got a lot of money, nearly a million bucks out of that. He also sort of validated that a lot of fans still care about the franchise. I think there’s still a need for venture funding for companies that are more ambitious, that want to raise more money, like five million bucks and upward. It’s pretty hard to imagine that crowd-funding sources are going to produce that much money. This middle layer of people who are well known already as developers, who have some property that they can revive, are the ones that I think are going to benefit most from Kickstarter.

[a]list: Has there been any rumbling among the VC community about how they feel about crowd-sourcing?

Dean Takahashi: I think they sort of realize that they have to bring their own value to the equation, that they can’t get as greedy as they might be in the absence of Kickstarter. It kind of keeps everybody honest. The VCs can’t take a controlling stake in a company for a very small amount of money. There’s a checks and balances system here. If the deal you’re getting from a VC or angels is an ownership one, you have an alternative now to go shopping for money on Kickstarter without giving up any equity.

[a]list: Let’s get your thoughts on E3. There’s this question of the viability of E3, now that there seems to be fewer major announcements made at the show. There’s also the question of where it should be located, whether it should stay in Los Angeles. What are you views

Dean Takahashi: First, I think it should stay in LA. It’s the center of entertainment in the country. It makes sense to have all of the entertainment industry represented at the show. If they move it out, maybe they move it out for a couple of years then come back to LA at some point, just because of the construction issues really. [Editor’s note: LA is mulling a new football stadium.] They could try to put it in other big cities like Las Vegas, but there are a lot of pluses and minuses there, with too many distractions in Las Vegas.

The Last of Us

As far as the show itself, I disagree with people who think it’s over. I think it’s still a very valuable venue and it’s going to be so for a long time, especially for a lot of the major tent pole announcements of the game industry. This was an in-between year so it’s sort of unfair to criticize it and say there was nothing that exciting at E3. Nintendo’s console announcement could have been better. By next year we’ll have some new console announcements coming from Microsoft and from Sony that will sort of put some life back into E3. I think there were really some good surprises in the games that were shown by different players. Sony scored very well with brand new intellectual property with games like Beyond: Two Souls, The Last of Us and The Unfinished Swan. Ubisoft also had a very good showing with some very solid sequel games like Assassin’s Creed 3 and Far Cry 3. They also had a brand new title in Watch Dogs that wowed the audience at their press conference. If you add all of that up, it wasn’t that disappointing. I think Microsoft and Nintendo could have shown their games better. They looked weaker by comparison.

[a]list: With Nintendo, where do you think they came up short in the way they showed the Wii U?

Dean Takahashi: They have a major issue with the capability of the Wii U console where it has a single processor but it has to drive multiple displays. A single graphics chip inside the console has to drive the big screen, the main game screen, but it also has to provide the imagery for the tablet controller, the game pad. And yet the system itself isn’t that powerful. Nintendo only showed games with one game pad controller and the TV. Most games out there, if you’re in a social setting, you want two controllers. Nintendo didn’t show any games that do that. They admitted in a Q&A that the games are going to run slower if you have two game pads and playing on a main display. That’s a fairly big issue for them. They made a good case that you can play with one controller and multiple Wii controllers, what they call asymmetric gaming where one person is looking at the small tablet screen and trying to deploy zombies while the people playing with the controllers were all on the main screen. You come up with very creative, different kinds of games where it’s one against four, or one person going online. They tried to justify and turn into an advantage this major weakness of the Wii U, but I think a lot of people saw this as a weakness. The games themselves were creative. They tried to do something like Wii Sports with NintendoLand, which has mini-games in it that explore the capabilities of the tablet and the touch screen. But there wasn’t an obvious blockbuster within those games. They may have had a good one in ZombieU, but in the demos it didn’t necessarily play that well. Nintendo came up as a pretty big disappointment at E3.

[a]list: I know you’re a gamer. What are you playing and what are you most looking forward to?

Dean Takahashi: I just finished playing Max Payne 3. I think I’ve slayed more than 1,500 people one at a time. It’s interesting for that game, which is a very cinematic game with some outstanding cut scenes and a character driven story. Yet at E3 some of the most interesting games to me like Tomb Raider, The Last of Us and Beyond: Two Souls, they had confrontations in them with a lot fewer people. A lot fewer people to shoot but each conflict was a life and death struggle with someone who was just about as capable as you were. Instead of shooting a hundred people, it seemed you might kill one or two, and also in a more brutal way. These games that are coming up that I mentioned are much more emotionally rooted, almost like movies in the impact they can make and the power of these scenes. They can sort of make Max Payne 3 seem like kid’s stuff by comparison. The only worry that I have is they might seem too scripted to the gamer, where you’re not controlling the game as hands-on as you would like, and that it’s more like watching a movie unfold in front of you. The game industry has gone down that road and made that mistake before. It’s a hard problem to solve in how much can you increase the drama of a game before it’s no longer a game and turns into a movie.

[a]list: Thanks, Dean.

Exclusive: Publisher 2.0 — Riot And The Rise Of The Player Community

BY

By Steve Fowler

Following in the series looking at digital games and the rise of Publisher 2.0, where we last showcased the growing opportunity for mid-core games, we turn to the one of the category’s biggest games.  League of Legends is arguably the most successful free-to-play mid-core title in the digital game market. The game’s publisher Riot Games is a rising star that’s helping define what it means to be a Publisher 2.0.

League of Legends began as a small community focused PvP game inspired by the popular “Defense of the Ancients” mod based on Warcraft III.  The game has players choosing sides to defend and attack cooperatively against other real players.  The matches are furiously fast. They’re also extremely well balanced, a critical element for a free-to-play PvP game. Players get in, get their fix, and then reset or stop playing.  It’s exactly the type of play style that suits mid-core gamers.

Riot’s success with making the game a hit also has a lot to do with how it branded the IP with core gamers in mind and focused on nurturing a loyal player community. League of Legends has an impressive 32 million players registered, but what’s astounding is how more than a third still play monthly, and more than 4 million do so daily. That’s dedication that comes with attracting core players, and it speaks to both the quality of the game and Riot’s player community, which drive the experience.

For anyone who wasn’t tracking the rise of digital and free-to-play a few years ago, Riot’s success may have been off the radar. That changed in 2011, when China game conglomerate Tencent invested a majority stake in the company to the tune of $400 million. It didn’t go to Riot’s head. There was no sudden surge in marketing spend, no chase for the quick buck nor expensive and unsustainable customer acquisition campaigns. Instead, the company continued its “community first” approach.

No small part of the credit for that philosophy, not to mention the overall success of League of Legends, goes to Chris Enock. Enock joined Riot’s marketing team just as League of Legends was exiting beta testing in 2009, and he now serves as senior marketing director.

“We haven’t yet had the time to focus on traditional acquisition marketing, of going big at retail, or doing massive media buys on TV,” says Enock. “Instead we focus on helping our players engage with the game and the brand. That has been our primary strategy for both [player] acquisition and retention.”

Enock granted [a]list daily this exclusive interview to delve into what he believes defines effective marketing strategy for digital games and how Riot understands the changing face of game publishing.

Steve Fowler: Tell us, what do you oversee at Riot?

Chris Enock: I oversee a number of the publishing operations at Riot Games including Business Intelligence, Marketing, Community, eCommerce and Corporate Communications.

Steve Fowler: League of Legends is an entertainment service and not a traditional game product, given that it’s persistent, constantly evolving, and reliant on an ongoing stream of customers. How does that simple fact change the way you market it?

Chris Enock: I think it changes things drastically, but in a way that plays to our strengths.

First, I love marketing video games, not only because I get to play League of Legends and other titles in the name of “work,” but also because it’s a high involvement product. Gamers who play the types of games I most enjoy working on are highly involved in the games they play. They play a ton – most League of Legends players invest hours in the game each week – and that means they’re highly knowledgeable about the games they play. They research strategies, debate the meta-game, and even create astounding fan art. That gamers dedicate so much thought to the games they’re playing makes marketing games more interesting than marketing products like butter or socks that consumers might only take a few moments to consider.

That level of engagement and passion enables us to have a different type of relationship with players. Instead of just broadcasting a marketing message or talking at them, we talk with them, typically on our forums or on social channels like Facebook. We might start a conversation, but it very quickly becomes a real live conversation between players — a different beast entirely. Traditional marketing, like a TV commercial, allows marketers to broadcast messages and doesn’t generally offer a response mechanism. Exaggerated claims aren’t necessarily challenged. In contrast, marketers who engage in conversation with players must be authentic or players will respond negatively, challenging the marketer’s message and drowning it out with their own corrections or questions. For League of Legends, that means we only do marketing around messaging we feel will both resonate with and ring true to our players.

Steve Fowler: Let’s look at the three types of media, paid media such as ads, owned media such as videos and game assets, and earned media such as PR, social and community. Give us insight into how Riot Games uses these effectively and how you integrate your message into each.

Chris Enock: Our team of marketers takes Riot’s mission to heart: We try to be the most player focused company in the world. This means we focus on building our brands from a player perspective. Building our brand then becomes an exercise in deeply understanding what players want, aligning with development around providing it to them, then connecting the dots for players so that when they taste the improved experience they understand it wasn’t accidental. The net impact is that our players end up doing most of our marketing for us — what you’d call earned media in your framework. Most League of Legends players join because they hear about the game from a friend. Friends feel comfortable telling friends about the game because they see Riot’s regular improvements to the game experience. The medium for communicating our message – as in paid media or owned media – is in some ways an afterthought. We just want to have a meaningful dialogue with our players about the game.

Steve Fowler: In your marketing messaging, you almost see no mention that League of Legends is in fact free-to-play. Is playing up that business model no longer a focal point for your company’s strategy?

Chris Enock: That’s very insightful. Nobody plays League of Legends just because it’s free. There are plenty of games like that that don’t really grab and hold players’ attention. They play it because it’s a compelling game with a great roster of characters. Being free just makes it easier for players to get into and stay in the game. So instead of the economic model, when we discuss the game, we focus on what draws players to the game. We try to grab the attention of players by showing the iconic and epic characters. As players engage, we try to convey the action-oriented nature of the game. As gamers explore deeper on the website or elsewhere, we discuss the strategic depth of the game.

Steve Fowler: eSports seem to be a huge focus for you. Tell us how this works into your overall marketing strategy.

Chris Enock: It’s a big part of our being player-focused. We designed the game to be a viable eSport from the beginning, but when saw how important competitive play was to League of Legends players, we doubled down. There were well more than a million players tuning in to our first World Championships in 2010, and [we] have seen more than two million tune into the regular matches in our Challenger’s Circuit this year. We look at eSports, in marketing parlance, as a way to deepen our engagement with our players. That millions of gamers watch other people playing the game for hours speaks volumes about the role League of Legends plays in their lives. This is another area where our interests and those of our fans intersect. Having a lot of exciting competitive play in [the game] lends itself to great conversations, and therefore great marketing around it. It’s the equivalent of Monday morning water cooler conversations about the performance of your favorite sports team over the weekend. eSports fans have huge levels of engagement.

Steve Fowler: Can you give us some examples of what tactics are working best for player acquisition and retention?

Chris Enock: To add to the earlier answers, for retention, we don’t focus on “retention” per se. We instead focus on making sure that players have a good experience in the game. A popular tactic of retention marketing is the winback campaign, usually an email to lapsed customers. We don’t think that sort of thing is effective unless players find that the gameplay is well balanced, that matchmaking works well, that a culture of team collaboration exists, and so on. We have had to build our organization from the ground up to run the game as a live service, with content, balance and new feature updates very frequently. It has required a different structure and a lot of different choices from what more mature or older-school businesses do, but I believe that much of the industry will eventually have to make a lot of the changes and tradeoffs we’re making at Riot Games.

In terms of acquisition our players do a lot of the marketing for us. They tend to carry the message to other potential players and bring them into League of Legends. We enable that by having a conversation with our players, by discussing and getting behind aspects of the game that they will support and believe in. In that sense, we are tailoring our marketing messaging not to new consumers, or targets, but instead to our current base of fans.

We haven’t yet had the time to focus on traditional acquisition marketing, of going big at retail, or doing massive media buys on TV. Instead we focus on helping our players engage with the game and the brand. That has been our primary strategy for both acquisition and retention.

Steve Fowler: What’s your opinion on the importance of building a brand around a game, and how did you approach it with League of Legends?

Chris Enock: I think building a brand is essential, but we don’t go about it the conventional way. In traditional branding, money is spent on paid media to help a symbol start to take on a set of attributes that mean something for consumers. The Nike Swoosh, thanks to the endorsement of Michael Jordan and Tiger Woods and a whole string of celebrity endorsers and Super Bowl commercials, certainly is an amazing brand. But for League of Legends, we’re taking a more grassroots approach, instead allowing the experience of playing to define the brand for players. When someone has an amazing moment in game, there’s a deeply rooted sort of goodwill generated, and we think it’s more valuable.

Our job as marketers is to simply to highlight the highlights, to help the community become aware of the rich stream of value that’s being generated by Riot [such as] features, service upgrades, new champions, new skins, and by the community itself – team play, community-generated art, community-generated strategy guides, and so on.

Steve Fowler: What advice can you give to marketers of smaller digital games with limited resources and budgets?

Chris Enock: The great thing about this new style of marketing is that it doesn’t really cost anything compared to traditional marketing around paid media. Many of our conversations happen on our forums, Facebook, and other social channels. The reach and frequency of this marketing first scales with the strength of the play experience and value offered, and second with the number of players in the game. It’s also a virtuous cycle. Companies that better engage their players around the positive aspects of their game enjoy more positive word of mouth and more referrals.

As for jumpstarting the process and getting the word out about a game at launch, there are a number of marketing channels available today, like AdWords and Facebook, where the limiting factor is more often time and creativity vs. budget. Having a two-way conversation with players flips the tables. Now, the quality of the messaging is as important as the ability to broadcast it.

Steve Fowler: With a service-based game, the marketing really begins at the launch of the product. Can you give us an idea on how you manage the consumer message over time to keep it fresh and relevant?

Chris Enock: Being fresh and relevant means having meaningful discussions with players. League of Legends is built and run around being able to facilitate that. We update the game on a rapid cadence, adding new features, new content and balance changes about every two weeks. That cadence creates a constant dialogue with players who are excited and engaged not just to play but to talk about it as well. Add in eSports, contests, events and many other activities that Riot helps facilitate, and there’s always something new happening.

The strategic challenge then becomes more about shaping the brand by prioritizing which areas you want players to talk about, rather than as is typical coming up with a clever marketing message to get people excited about something they normally wouldn’t pay attention to. My personal challenge is around recruiting great marketing talent who can think about how to leverage this shift in marketing and understand the messaging nuances enough to sustain a conversation with our most hardcore players. When players are engaged, and new game enhancements roll off the line with regularity, keeping the conversation fresh and relevant is straightforward.

 

This interview is part of a series of articles for [a]list daily outlining the changing face of publishing and marketing games on digital platforms. The series began with “Why Publisher 2.0 is M.I.A.” Subsequent pieces have covered the shift in digital games from marketing a product to marketing a service, a publisher that gets the category in an interview with Wizards of the Coast, and a piece co-authored with Peter Warman, head of analyst firm Newzoo, looking at the growing opportunity in mid-core games.

—

Steve Fowler is a thirteen year veteran of the interactive entertainment industry. He is responsible for the brand identity and launch of the Halo franchise at Microsoft Corporation, Inc., and has held marketing and business development roles at Interplay, Sega Sammy Holdings, Inc., Square Enix, Inc., and Take-Two Interactive Software, Inc. He is the chief architect of the one of its kind annual industry conference the [a]list summit, and has been incubating new digital game publisher [a] list games internally at Ayzenberg Group for the past year. For more information on [a]list games, visit www.alistgames.com.

 

 

[a]List Game Marketing Summit: Pachter’s Bold Keynote

BY

[Update]

Pachter has responded to his critics on NeoGAF {link no longer available} with a forum post titled “A little context” about his Wii U comments during the keynote:

“I believe (and please feel free to disagree) that a large portion of the Wii audience comprised casual gamers–those who bought one or two games a year the first two years, then put the Wii aside–and that those casual gamers moved on to another platform,” wrote Pachter. “The ‘other’ platform may have been Facebook games, smart phone games, tablet games, or one of the other consoles, but once they moved on, they are not likely to come back.”

“At the same time, I believe (again, please feel free to disagree) that the growth of smart phones and tablets has attracted many potential dedicated handheld game customers, and these people also are unlikely to come back to either 3DS or PS Vita,” he continued. “Summing this up, I think the addressable market for the Wii U is around half of the market for the Wii, and I think Microsoft and Sony will compete for a portion of that market if the Wii U is priced too high. I think that the dedicated handheld market is permanently impacted by smart phones and tablets, and think that Nintendo’s addressable market is probably also half of its former market.”

“Nintendo is in disarray because they waited too long to launch the Wii U,” Pachter detailed. “I know that this sounds like (and is) sour grapes because they didn’t launch the Wii HD in 2009 or 2010 as I ‘predicted’. They should have, and because they didn’t, the decline in Wii and DS hardware and software sales drove them into generating LOSSES. For those of you who aren’t financial analysts, losses mean that the company is worth less than it was before. Nintendo stock has dropped by over 80 percent in the last few years, and the market has appreciated over the same period. I’m paid to advise investors, and none have made a profit owning Nintendo stock. I don’t think that many will make a profit over the next few years, because I don’t think Nintendo’s strategy will return them to profitability.”

“If the context above infuriates you, go back to school and pay attention, then read it again,” he concluded.

[Original Story]

Michael Pachter, Managing Director of Equity Research at Wedbush Securities, gave the keynote address at the [a]list game marketing summit in San Francisco on Thursday, and he had a number of provocative observations for the assembled crowd of game marketers.

Pachter lead off with his prediction for the industry standby of packaged console products.“I think console packaged products are going to be around for a long, long, long time,” said Pachter “When they do go away, they’re going to be replaced by console download products. People are going to have that $60 – soon to be $70 – game play experience as long as there’s somebody who has a vested interest in making sure that happens.”

Pachter took exception with an observation by David Cole that was cited by Steve Fowler of the Ayzenberg Group, who introduced Pachter and the summit. “I think David Cole said something that’s wrong. He said there could be a social bubble, because all the games are copycat, there’s no originality… you could absolutely say that about first-person shooters. You could. They’re all the same game. Except they’re not. I would say that about Hidden Chronicles and Gardens of Time. I love Zynga games, and I get why they’re doing them,” Pachter said. He followed with double-edged compliment: “Zynga actually does a great job with their games. Even when they rip somebody off, they do a better job than the person they ripped off.” That’s one quote that Zynga probably won’t be using in their marketing materials.

Pachter went on to compare the evolution of the gaming industry to the evolution of the casino gaming industry. Pachter noted that to be a successful player, games like poker require a deep knowledge of the game and a lot of play time to develop the necessary skills. (He also said that he paid his through law school as a poker player, earning $250,000 per year for three years of law school.) Poker is played in long sessions; you don’t just sit down and play for a few minutes, Pachter noted. Casinos all have a poker area now, but they also have table games like craps and roulette, which are kind of complicated but not as highly skilled as poker. You spend time playing them, but you don’t have to spend as much time as when you play poker. The biggest area in casinos is devoted to slot machines, which anyone can sit down and play for a minute or two or for hours.

How is all of this like the gaming industry Pachter explains: “Texas Hold’em is like playing an MMO. Exactly like one. Nobody does it for five minutes, and when you play it you are immersed in it. The same kind of people do both, obsessive-compulsive people.” In Pachter’s analogy, the table games are console games. “You cannot just start playing Call of Duty. You tend not to play it for a few minutes,” said Pachter. In both cases you have to learn something about the games and develop some skills, and you tend to play them for at least an hour or two.

Then you have slots, which Pachter says “are just like casual, social , and mobile games. Everyone can figure them out, and they’re really mindless.” When Las Vegas was just table games, that was like the game industry with just console games. “Console games were really like Vegas thirty years ago. The 90s was when the MMO started to appear, and that’s when the poker rooms started to appear in casinos,” said Pachter. Now we see that casinos have devoted a huge amount of space to slots, and they generate a lot of profit for the casinos because they are so easy to play for anyone, and you can play them for a minute or for hours. The casinos still have the table games, and they still have the poker rooms, and they’ll continue to draw a good audience even though the slots may get the majority of the floor space.

Pachter now sees social games as a good business that will continue to grow, especially when the social game companies are able to refine their business model. “Free-to-play is free, and that’s a mistake,” said Pachter. “Free to play should not be free. In Western cultures, we get nothing for free. It’s ad-supported if you don’t pay for it.” He pointed out that we have no problem watching an ad in order to listen to music on the radio, or to watch television, or see movies on TV. The scoial game market needs to take that to heart, according to Pachter. “If publishers and developers can figure out a way to monetize the 98 percent of the people who don’t pay, this is a great industry to work in.”

Pachter had quite a lot to say about the console market, too. “Smartphones have absolutely destroyed the casual market for consoles. They also killed the casual Wii game,” Pachter noted. “The market for hardcore games is bigger today than it’s been. Nintendo inflated the numbers with a bunch of great casual experiences, which have been replaced by social games, and smartphone games, and tablet games. I can tell you that the women that were playing the Wii Fit are now playing FarmVille, CityVille, CastleVille. Wii was a bubble. The Wii bubble has burst.”

We took advantage of the question period to ask about the next generation of consoles. New consoles are in the wings, the Wii U’s been announced, but pricing hasn’t been announced. There are rumors that Microsoft’s next console might be as much as $600. Could the next generation of consoles really be successful at that kind of price point

Pachter didn’t hesitate to share his thoughts on the next generation of consoles. “Since Microsoft hasn’t settled on specs, I think that’s probably premature,” said Pachter, referring to the idea of a $600 price point for the Xbox 720. He moved on to his thoughts on the Wii U. “I think Nintendo’s in disarray. I think the idea that we don’t know the price point yet, but we do know what the console is, is just sad. I think they’ve completely blown that. It’s gonna launch at $249; because it has to. They’re dead if they launch at $259, I think they’re toast then. I think they’re toast anyway.” Why “I think the Xbox 360 with Kinect will be priced below that by the time they launch.”

Pachter went on to talk about the next console generation in general. “I’m a little worried about the next generation because I actually think we’ve gotten to the point where people don’t care any more. Look at television displays; we’re at 1080p (2K) already and they’re already talking about 4K and then 8K. Nobody’s buying a 4K TV or an 8K TV in the next ten years. They’re $15,000! All the consoles now are running in 1080p, so what are we gonna get 60 frames per second standard, and 120 frames per second occasionally Who cares Have you played NBA 2K? It looks like a frickin’ movie. The facial animation isn’t great, but the game looks like a movie. It doesn’t get any better than that. I’m actually worried about them in general.”

Pachter finally circled around to the pricing question. “So the answer to your question is, yeah, price I think is everything, because I don’t think features matter that much. I think what you’re going to see in this next generations of consoles is this: 4 GB hard drive, except for Nintendo which will be no hard drive, and maybe some type of built-in cell access or something, some way to connect with the television without wires, it’ll be like little features… but as far as gameplay, you’re talking about faster framerates, but I’m not even sure what manufacturers want. We’re in a really interesting time. I think the manufacturers better figure it out and better let consumers know, because we don’t want to make them to wait for something that’s not coming. If Microsoft launches at $600 it’s over.”

Nintendo’s pricing of the Wii U will be a very important part of the puzzle; not just the price, but when they choose to announce it, and then how Sony and Microsoft respond. The holiday market in 2012 will be very, very interesting to watch.

Finding Publisher 2.0

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The search is on for a new approach to binding product development and market making in the game industry as more and more products are served digitally. It’s the search for publisher 2.0. This series has covered the issues facing developers and publishers in the shift to digital. It started with how developers gunning for success in the category might overlook essentials, some in their haste to  shun the old publishing model. The last piece drilled down on the fundamental differences between marketing packaged versus service-based games.

Both articles have also argued how important it is to establish a cohesive branding strategy. It’s critical for an entertainment product, where people have become accustomed to highly creative marketing campaigns that are compelling and aim to entertain.

In the search for publisher 2.0, let’s look at one company that gets it.

“A brand is nothing more than a promise between you and your community,” says Bryan Chu from Wizards of the Coast. “The validity of that promise is expressed in every interaction, every product release, and every experience you create together.”

One way to look at a brand is that it’s the wrapper for a product. It’s a potential customer’s first impression. Whether they run into an ad pasted on the side of a building or find a game in a Tweet from a friend, the first impression better be good. So should the second, and the third and so on. According to Chu, Wizards of the Coast goes to the level of seeing their flagship franchise, Magic The Gathering, as a lifestyle brand.

“Regardless of the level of player or whether their play experience is in stores, around the kitchen table, or digitally, we continuously and actively engage with our players,” says Chu, adding how key to the effort is “unity of voice and messaging across all channels.”

That stance came into play when the company was ready to take their IP, viewed as the most successful trading card game in history, into digital games. It was with the release of Duels of the Planewalkers. The game hit PC and console digital game stores just under a year ago and has been selling briskly, becoming one of the most successful Xbox Live Arcade titles of all time.

We go in-depth with Chu, who serves as Wizards of the Coast’s senior business manager, on how strength of brand as well as tactics unique to digital games factored into how they marketed Duels of the Planewalkers.

Steve Fowler: What’s your opinion on the importance of building a brand around a game product, and how did you approach it with Duels of the Planewalkers?

Bryan Chu: It’s about the overall brand experience. I think you need to build a brand holistically and deliberately. You can’t just throw product out there hoping that people will find it anymore. You can’t just think of your players as consumers or worse yet, wallets. You need to think of them as partners in the experience that you’re creating together. It’s not about sales or moving units in the short term. It’s about creating great experiences and touch points and by doing so creating lasting, long term value. We don’t think of Duels of the Planewalkers as a one-off Magic experience, but rather as an on-ramp to the greater Magic brand.

Steve Fowler: Give us an idea of how you manage the consumer message over time to keep it fresh and relevant and continue to attract and retain players after launch?

Bryan Chu: It’s about integration and providing a consistent and great experience in both the campaign and the products. That means constant innovation for both, and understanding your consumer. Who they are, what they want, where they are, how and when they play and on what journeys they want to go on with you. That means as marketers we need to listen and not just pitch. Every time a consumer buys a game, a piece of DLC, or plays in an event they are telling us something. Our job is to hear what they’re saying and to work with the rest of the team to provide that next great experience.

Marketing in this day and age isn’t just about acquisition of new players. This isn’t the game industry 10 years ago when it was all about gearing up the hype machine and getting a huge launch only to move onto the next big launch once product was on store shelves. It’s now, more than ever, about managing the lifecycle of franchises. We’re a part of our players’ lives and we have a responsibility to work just as hard to build engaging experiences as we did to get them to try us out in the first place.

Steve Fowler: How did you approach different channels to get your message across, whether through paid ads or earned media such as social or community?

Bryan Chu: We’re fortunate as a company to have such a robust and engaged fan community, so much so that our earned media efforts often take on a life of their own. This carries over to fantastic traffic to our owned media, which of course creates improved efficiency for paid media. Our players are great. It all starts with them and continuously providing them with great experiences.

 

Steve Fowler: Can you give us some examples of what tactics work well with selling digital games on consoles?

Bryan Chu: If there is one thing that I’ve learned over the years is that there’s no such thing as a small launch. There is a tendency to think of digitally distributed titles as small plays, or side projects and not deserving of focus and attention due to smaller budgets and lower price points. However, this “small play” might be a player’s first and potentially only contact with their brand. In fact, given the delivery and the generally lower prices, it’s even more likely that a player will come into contact with a digital product. We put as much effort behind Duels of the Planewalkers as we would anything else.

Steve Fowler: With eSports being a huge focus for Magic The Gathering, tell us how this works into each product’s marketing strategy.

Bryan Chu: Wizards has the most robust organized play program of any company I’ve ever been a part of. The team here provides amazing experiences year round for all levels of play, from local level Friday Night Magic events to the Pro Tour. Not only are events happening for all levels of players, but they are also happening all the time in a myriad of locations. Players can walk down the street to their local store, hop online and play digitally, or just login to the website to view the robust coverage of the Pro Tour events. What this means from a marketing perspective is that it’s extremely easy to be highly engaged in Magic.

Steve Fowler: What advice can you give to marketers of smaller digital games with limited resources and budgets?

Bryan Chu: The first bit of advice is not to over focus on your limited resources and budget. No one, in the history of the world, has ever gone to market with as much budget as they would have liked. Understand your core consumer and who your target is. Serve that community. Digital marketing is disciplined marketing. It’s more similar to traditional CPG [consumer packaged goods] marketing than the old launch based game campaigns. That means the devil is in the details and getting all those things right.

To me, digital games are making games marketing grow up. We’re suddenly a real discipline and not just a bunch of guys thinking of throwing feather boas onto the Statue of Liberty. That also means that it suddenly is less about the budget and more about your skill as a marketer. Doing your homework, spending those hours in front of your spreadsheets and building your strategies is more important than ever. That is what will let you optimize your budget and make your campaign as efficient as possible. And if your budget is limited, that efficiency is what is going to make or break you.

The other piece of advice is something that does still hold true from traditional video games. Work on your relationships with your product teams. With digital games, especially F2P and rapidly evolving micro-transactional games, the relationship between marketing and development is more critical than ever. You need to be partners from inception through launch and beyond. Good marketing helps good products succeed, and good products make good campaigns great.

Steve Fowler: Bryan, thanks.

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Steve Fowler is a thirteen year veteran of the interactive entertainment industry. He is responsible for the brand identity and launch of the Halo franchise at Microsoft Corporation, Inc., and has held marketing and business development roles at Interplay, Sega Sammy Holdings, Inc., Square Enix, Inc., and Take-Two Interactive Software, Inc. He is the chief architect of the one of its kind annual industry conference the [a]list summit, and has been incubating new digital game publisher [a] list games internally at Ayzenberg Group for the past year. For more information on [a]list games, visit www.alistgames.com.

Exclusive: Transforming A Brand Into A Game

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When you ask someone who grew up on the action cartoons of the ’80s which was their favorite, there’s a pretty good chance they’ll say Transformers. Iconic as a toy brand, now a mega success as a movie, there are still a number of people who feel the greatest connection to the original cartoon series, (known as Generation One, and abbreviated to G1). High Moon Studios saw an opportunity with the franchise outside of just adapting the movies into video games and have run with it. We talked with High Moon Studios President Peter Della Penna and Marketing Manager Greg Agius about the brand and their latest game Transformers: Fall of Cybertron.

[a]list: How did you get a chance to do a game based on an original take on Transformers in the first place?

Peter Della Penna: It was pretty obvious to us and Activision, that our studio capabilities and sensibilities were a great fit for the Transformers license. Also, it was perfect timing for us to develop a Transformers game that was not based on the film property and did not interfere with the movie franchise release schedule.  The natural place for us to go was back to our childhood roots in G1 and start telling the story of Transformers before they came to earth.

Peter Della Penna

[a]list: What are ways that you look to bring in fans of the classic cartoon series Do you try and tap veteran voice actors?

Greg Agius: Authenticity is our biggest strength at High Moon Studios. You walk around the studio and you see G1 fans everywhere. I’d say that bleeds through to the game in every way. The look and the feel all are heavily inspired by G1. But everything is updated so that it feels right and up to date with the look of a modern game. Landing original G1 voices like Peter Cullen to voice Optimus Prime and Gregg Berger to do Grimlock is another key. Transformers: Fall of Cybertron reboots your childhood and makes it cool again!

[a]list: What games do you try to emulate as far as being successful with a classic brand?  Do you try and learn something from the recent Batman and Spider-Man games?

Peter Della Penna: Game wise I would say both Batman and Spider-Man are great references. Especially the Batman Arkham series where everything you do in those games drives the player back to the core of what makes Batman so cool.  For us, it’s about transformation and the variety of awesome characters in the Transformers lore.

[a]list: Talk to me about the reveal trailer for the game and what you thought the important messages you were trying to convey were (prescience of certain characters, style of the graphics, etc.)

Greg Agius: We wanted Transformers fans and gamers to take a fresh look at our game. For me, we needed to communicate that Fall of Cybertron is an adult oriented game that stands totally apart from anything related to the films. So the team set out to break every rule we could think of for a Transformers trailer: we had zero voiceover, we destroyed main characters, we made the story come to you, and we picked a song that is totally groundbreaking for this franchise. When fans started posting, “attention… this is how you do Transformers!” I knew we had done things right. The style and look is all very in line with what gamers are currently playing.

Greg Agius

[a]list: How do you balance aesthetic considerations for these games?  The Transformers are evocative of G1, but they’re not cel-shaded. Was it conscious to make it like the early cartoon but have it be a little grittier?

Peter Della Penna: Visuals are very important to gamers.  If it doesn’t look good many won’t even try the gameplay.  So, yes, our style is evocative of G1 but not a reproduction of it.  By design we intended to have a gritty, nostalgic sensibility.

[a]list: What went into bringing in the Dinobots for Fall of Cybertron?

Greg Agius: Getting the Dinobots in Transformers: Fall of Cybertron was a labor of love that has paid off handsomely. This game is new canon for Hasbro, and we are working with them to write lore that will stand for future storylines for this multi-billion dollar brand. Our team passionately fought to keep the Dinobots in the lore so that we can have them in our game. And why not You can’t find characters more unique than this! Of course we had to work with them to find a plausible creation story that Transformers fans would accept. We found some inspiration from the old U.K. comics and it provided some excellent ground that players will explore in our story. Playing as Grimlock is fantastic, you just feel super powerful!

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Like Transformers? Looking forward to High Moon’s latest? Join the discussion on Facebook.

Why Publisher 2.0 Is M.I.A. – Part 2

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There is a single radical shift facing marketers and developers in the emerging digital game landscape. In the first article we covered opportunities in digital games and evidence that a lack of a new approach to publishing them is hindering growth. One shortcoming could be that not everyone recognizes this radical shift. It’s that many games in the digital distribution era are more akin to services than products, and that marketing a service has a set of different fundamentals.

The shift is very similar to when television emerged, adding to Hollywood’s annual slate of products a persistent service for filmed entertainment.

From the onset, it was apparent to TV networks that they would have to approach content development and marketing very differently than film. Their product was free to consume, with profit reliant on sponsors and advertisers. This gave a uniquely important role to audience analytics, which provided the means for broadcasters to prove the value of content. There was too much at stake for any room for error, and advertisers of powerful companies holding the money end of the stick. It didn’t take long for the industry to develop a single standard for analytics using Nielson ratings.

The ratings were projected estimates, yet they gave broadcasters a dramatic new tool to quantify viewership and thus set pricing for advertisers. Suddenly there was a need for mathematicians in the entertainment industry to do more than budget and count money. Statistics were influencing what got made, what got canceled, and how shows were packaged and promoted.

As shows came and went at a brisk pace, the networks needed some sense of consistency to their business. They needed a strategy for building audiences continuously while maintaining those they had the best they could. Nielsen was a good source of consumer research. Outside of development, it also helped networks measure how their service rated and made adjustments.

To build a following, however, these media companies had to approach marketing the same way Coca-Cola, McDonald’s and Ivory Soap were building loyal customer bases. Their marketing strategy revolved around branding. Performers, producers, programs, even the network as a whole were given personas. Tuning in was akin to joining their community. Tune out and you were bound to miss something. It’s why even today TV networks quite explicitly project a feeling of belonging, presenting shows and their stars as your extended social group.

That’s what it took for TV to attract a persistent stream of customers. To a game company or product in the digital marketplace that needs a persistent player base, some of the same fundamentals apply to you. It’s part of being a game publisher 2.0.

Forget Nielsen and its estimation. We have at our disposal enormous amounts of granular data on player behavior. We can track people all the way through the funnel, from awareness to purchase. More remarkably, for some games that means from impression to click to registration through download, log in and first in-game purchase. This allows us to make informed decisions on what content to make, how to price it, how to sell it, even how to promote it more efficiently.

As a career game marketer, once I began working on digital games, I was amazed how access to all of this data immediately changed the way I made decisions. In the console days of “fire and forget” marketing, we made educated guesses on messaging and placement and hoped it worked when we fired the product onto shelves for a few weeks.

With digital games, marketing spend and execution became a gradual exercise. I could roll out a campaign then test alternative multivariate creative or shift spend from one outlet to another, and use that agility to constantly maximize key performance indicators (KPI). I was always mindful of how much it was costing me to get someone into the game, otherwise known as cost per acquisition (CPA).

To have data like this to support every decision is a powerful drug. For me, it drove the desire to reduce CPA to as low as possible. That became my primary KPI. Seeing direct response to my marketing and employing different tactics to react to it brought out my inner Billy Mays. Acquiring users became a scientific exercise.

Looking back to the first few years of this kind of execution, I can now say it’s too narrow a view on marketing. Tactics driven by analytics alone, whether DR efforts or media referral plans, do not provide value to potential customers in the way the product is being marketed.

Start with branding. So many digital games are presented as commodities with such little personal attachment. It’s why people easily decide to move on to the next one with very little emotional attachment. If a player downloads your game because of an offer for a $25 free starter pack, and the game is free in the first place, what have you done to encourage them to stay? Unless the game is delivering an exceptionally engaging experience, the next game that offers them a free starter pack is all it takes for them to jump ship.

We need to give our potential customers a sense of ownership, the feeling that they are appreciated, that they are wanted. Making an emotional connection requires thinking of them as people, not consumers. Simply changing the way you talk about them is a good first step. Words such as “acquisition” and “discoverability” have a side effect in that they dehumanize what we do. At the end of the day we are selling entertainment, not Sham Wows.

We also need to entertain them in our marketing so that they believe us when we say our product or service is entertaining. And if we want them to stick around, then we need to empower them, engage them, listen and respond.

It goes farther for games as service-based products. For these games, there is no single launch towards which you build as big an audience as possible. All of the above begins in the lead-up to launch but then continues afterwards. The strategy needs to be consistent communications through a variety of channels, usually with the goal of growing the game’s player base gradually. Launch is not the window out for these games, it’s the door in.

The strategy also needs to surround the consumer via all appropriate channels. The importance of adding layers to the marketing message has never been more critical. Key is proper utilization of the three tiers of media: paid media, a.k.a. ads, owned media, which can be your game and its assets, such as a trailer, and earned media, whether PR or social. In the world of service marketing, the ability to combine communications through these multiple channels into one integrated campaign takes discipline, guts and planning.

Layered over all of this is building appeal with longevity in mind, again much more important for service marketing. Brand affinity is critical for this. Continuing from our television analogy, digital games can look to current great entertainment service brands such as HBO or Hulu for cues. These companies are constantly looking at metrics and trying to acquire, monetize and retain users. At the same time they build their brands as quality entertainment providers, and foster loyalty and a sense of community around their products.

Enough theories and anecdotes. Starting with the next article, we’ll look at companies who get it. We’ll delve into case studies for mobile, PC and social games from people who are blazing the trail into this new digital landscape. These are game makers who effectively executed campaigns with well thought out “performance-based” marketing that also factored in branding and customer loyalty.

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Steve Fowler is a thirteen year veteran of the interactive entertainment industry. He is responsible for the brand identity and launch of the Halo franchise at Microsoft Corporation, Inc., and has held marketing and business development roles at Interplay, Sega Sammy Holdings, Inc., Square Enix, Inc., and Take-Two Interactive Software, Inc. He is the chief architect of the one of its kind annual industry conference the [a]list summit, and has been incubating new digital game publisher [a] list games internally at Ayzenberg Group for the past year. For more information on [a]list games, visit www.alistgames.com.

Exclusive: Gogogic On Branded Games, Accessibility And More

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A couple weeks ago, we published the first part of our interview with Gogogic CEO Jonas Antonsson concentrating on mid-core games and bringing games cross-platform. In part two of our interview, we talk about everything from single-player experiences and branded games to transmedia and accessibility.

[a]list: Games like Demon’s Souls exist that don’t guarantee you any progress. It’s certainly challenging, but for some people it asks to much to have all your progress wiped out in a single encounter.

Jonas Antonsson

Jonas Antonsson: There’s clearly an audience for those sorts of games, but if you advertise a game that’s going to hurt you and make fun of you, it has to be the right sort of game. For the DayZ mod, you have people who have played for days and get killed, but I think that the experience fits with the mood of brutal survival and it becomes an acceptable part of the gameplay. So I think there is a strong audience for hard and unrelenting games — I personally like them — but as core gamers take on added real-life burdens I think they can’t spend as much time playing games and that increases the frustration level of losing all your stuff or having to begin from scratch. You learn to appreciate using your time more efficiently.

I also think that it is worth to note that the single player mechanic is a gimmick — games are meant to be played with others and it doesn’t matter if it’s in-person or online. The first games were designed as multiplayer experiences, but when computer and console games became a thing there was a need to construct an antagonist and/or a protagonist for commercial purposes. You couldn’t depend on people coming together to have a synchronous experience over a game. That would have simply stifled sales. And since there was no reasonable way to connect people in other ways — the arcade was the only serious attempt — it became an industry need to project the game as the other player. Playing a game is a multiplayer activity and can easily be seen as such when you watch young toddlers play by themselves. They invent someone to play with, someone that they talk to and interact with.

The high score list is a simplest way to make a game social, to transform it to an asynchronous multiplayer experience. A simple list allows me to share an experience with others — comparing myself to you in the game. This also becomes a great reason to create games that are hard and difficult to master. Enter the classic hardcore game that allows dedicated players to compare not only scores but progress and in-game assets found or unlocked. But now we can connect people in and around a game through real time PvP and PvE mechanics and the need for pure single player games had gone down. We have multiple plots and stories and build the meta-experience for the entire audience. The premise for making games has changed — reverted back to building multiplayer experiences that are true to the game form.

This doesn’t mean that we have run out of room when it comes to great single-player titles or games that make you sweat and curse every couple of minutes. It means that those titles have to be very appealing and cater well to the hardcore audience. So games that drive you crazy can be excellent because they are well designed, not because that’s what games are supposed to do or how they should always work.

[a]list: Tell me about your work for branding and what the opportunities are there.

Jonas Antonsson: I think that there were a lot of interesting developments a few years ago and I remember specifically that web games were really leading the way in 2006-2008. I remember the M&M movie game featuring a still picture of M&Ms adapting scenes from horror movies and the player was supposed to guess what movies were featured. This was for Dark M&Ms and practically everyone could play it. It went viral instantly and brought a lot of attention to the product. I also remember when the California Milk Association created a 3D modeled board game, featuring a a family of small time crooks trying to steal some extra milk and it was fantastically well done. They actually showed the metrics generated by the game some months after it launched and how it affected their bottom line. The results were mind blowing and extremely positive.

Dark M&Ms Ad

After that, in late 2008-2009, branding shifted gears towards product placement in games. Because of this we are not seeing the same quality in advergames. Instead, we see partnerships with game studios, because it feels like advertisers have moved away from producing holistic game experiences and I wonder why that is because we have stats that show these games can do wonders if they are done correctly and it shouldn’t cost more than what you do with a traditional ad spot campaign. You can generate metrics from the game — maybe that’s the problem, they can tell it failed! While it might be harder to trace success for radio or TV, games have definitive statistics – maybe there’s something there. I haven’t touched on this for some time now, to be honest.

At a traditional marketing and advertising firm, some creative person internally can execute on a campaign and it might be worked on by professionals and the idea is kept. With an advergame, you will be hard pressed to find someone with capabilities and expertise in making games within an advertising firm. So it can be fussy to make games. Where do you place the campaign or the cash Let’s say you’re making a web game — it isn’t a fire and forget thing. A TV ad lives for 6 weeks and it’s gone. The game doesn’t go away — you can do an A B test with the game and update it – change the message, whatever. But you also can’t control it and it can have nothing to do with your current message, two or three years downstream. So I think that it’s a tricky space. We’ve have a client take a down a game because it was too successful, and overwhelmed their servers. They were not happy until we pointed out the reason why their website went down.

Of course, working with an outside ad agency, they might be steering them away from games. That might mean a large part of the budget that they would otherwise get would go to this other company.

The time factors in, because if you’re going to build a big game, to execute it requires several months. And I’ve gotten calls for visions of the campaign and they’ll say it’s coming out in 3 weeks. That works for a TV ad but for a game, it’s going to be buggy. Three weeks are tough if you’re advertising a product – you want to make damn sure that game runs.

[a]list: It’s intriguing that sometimes big shot directors will moonlight for these commercials. I can’t imagine Ken Levine or Tim Schafer taking time to make an advergame.

Jonas Antonsson: There’s a bit of a culture clash there between ad agencies and game developers. Dan Draper would think of Schafer as a huge geek! [laughs]

There are a few titles that are changing how games are generally viewed. League of Legends, I was at PAX and I saw the west coast finals and it’s crazy to see a thousands of people watching it as a live sport and they’re booing and yelling and crying. It’ll take a while for the general public in Europe and the U.S. to view games as sport, but the baseline has been set.

Hawken, with their transmedia strategy, where they have web episodes and a feature film from the story that everything is based around, is also rocking it. It’s a holistic franchise concept – that, along with others like it, will revolutionize the stepchild relationship that’s in effect between Hollywood and Games. Things will also start to change because a lot of today’s superstar actors, directors and producers are game players and they actually respect game makers a lot.

The Batman franchise is another great example of how this can work across all mediums. The new movie trilogy is amazing, and you have the Gotham games that didn’t have anything to do with the movies but they have the same essence. There’s also the New 52 incarnation of the character that’s been popular in its own right. That franchise has proven you can build fantastic IP on numerous branches and in numerous ways — as long as you keep the core intact

[a]list: We recently got a chance to talk to Bigpoint about browser based games. Do you see that as a sector on the rise?

Jonas Antonsson: When we founded Gogogic we had recently begun to understand that there was a significant change silently happening in the games industry and that games were becoming mainstream. Browser games had started to appear as commercially viable experiences and mobile devices would get better and more connected. I’m a core gamer, I bought a lot of games, but my wife, who did not identify herself as a gamer at the time, spent more than me on games. They were discreet buys, from Big Fish Games and PopCap, all downloadable casual games. It was obvious the game world was changing fast.

The founders were personally at an age where it had become more difficult to engage in core game experiences, so we decided to concentrate on accessibility for cross platform MMOs — really a hard core space but one that was lacking accessibility both in terms of platform and engagement level. For the last couple of years we have seen this industry change take shape and the browser and mobile devices have become the most accessible platforms. But I don’t think the browser is on the rise. I think accessibility is on the rise. Steam, for example, increases accessibility to all sorts of games and that’s why Steam has also been on the rise.

It explains the success of Ouya because developers want an accessible console that’s intriguing and pulling people to it naturally. Unity is another fantastic example, letting people develop more easily and get their games to accessible platforms with relative ease. Sony bought Gaikai and I believe accessibility is a big part of that. Being able to play and stream from the cloud instead of having to download 8 GB clients — what you have is increased accessibility.

Vikings of Thule

[a]list: Anything you’d like to add?

Jonas Antonsson: As much as I am for increase accessibility, I’m firmly against dumbing down games or using psychological tricks as the only means to get people playing. With our latest game, Godsrule, we are trying to make sure we strike a great balance between access, deep gameplay and a great story. It’s a high fantasy MMORTS and it will be the first mid-core MMO game that implements a real RTS where you’re dependent on your skills as you take on opponents in real-time. And it has accessibility through both mobile and online platforms. During the day you can make things ready and at night you can sit down and RTS the hell out of someone! You can play five or six battles and you have an half hour to an hour session.

We want community to be at the heart of the experience and I’m personally a big fan of that. Any game becomes boring to the player with time, but the social interactions helps build up an experience that lasts a long time.

[a]list: Jonas, thanks.

Publisher 2.0 — The Emergence Of Mid-Core

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Publisher 2.0 is a curious beast.  A series of articles here that began with “Why Publisher 2.0 is M.I.A.” have outlined the shortcomings with those that are publishing on digital platforms. Follow up pieces have talked about what changes need to be made with the shift from marketing a product to marketing a service, and highlighted a publisher that is doing it right in an interview with Wizards of the Coast.

In this piece, we enlisted Peter Warman, co-founder of analyst firm Newzoo, to shine the spotlight on one of the most important developments in the digital game space. It’s the opportunity to re-introduce, and somewhat redefine, the mid-core game. It’s a category that used to drive innovation in the game industry, especially for hardcore games on console and handheld systems. Now with consumer behavior and what types of products are successful on digital becoming better understood, mid-core is once again poised to rise. It could represent the biggest growth category in digital games.

“As a core gamer I’m genuinely excited to see diversity return with new platforms and the fusion of core and casual mechanics.” – Jonas Antonsson, CEO of GoGoGic

There was a time when you could walk into a game retailer and be blown away by the diversity of products. A variety of games for every genre and even niche products rounded out the AAA and franchise-based mainstream offerings.  That time is gone.  Retail now relies on pallet after pallet of big budget games, mostly sequels and from just a handful of genres. Traditional publishers have become less and less interested in mid-core games, a category traditionally made up of modestly budgeted games often based on unknown IP that targeted a niche among gamers on a given console or platform. For big publishers, the highest upside for a these types of games still isn’t lucrative enough to invest in developing them and allocate resources to market them.  At first slowly but now surely, they’ve abandoned the category.

As mid-core neared its abyss at retail, digitally delivered casual and social games hit their stride.  With the viral capabilities of Facebook and the mobility of cell phones and tablets, a new game market was created for a whole new crop of consumers who didn’t even consider themselves gamers. Millions of new people enjoyed the addictiveness of games like Farmville and Angry Birds, with their experience facilitated by the ease with which they could access these games. To some extent, these games also drew an audience from former game players. These are people who at one point looked for their gaming fix on PC, console or handheld systems but eventually found the narrowness of what publishers offer on those platforms unappealing. For them, casual and social games filled the void that mid-core used to serve.

Redefining mid-core for digital

In digital, mid-core is defining itself as games with a combination of immersive experience and casual gameplay. As such, it’s positioned between packaged products or hardcore MMO games, whether on console or PC, and the “new gamer” targeted casual titles served up in droves on mobile and social platforms. It’s a bit of a shift from what made up mid-core in the earlier days of console, where game play could be very hardcore.

The shift comes from new platforms. Tablets and smartphones force game developers to adapt their game to the intuitive interface and typical situations in which these screens are used. Casual gameplay characteristics are inevitable. We could therefore consider Grand Theft Auto III on the iPad a mid-core game, whereas it was very much a hardcore title on console. This is a bit of psychological hurdle that game developers, and especially those whose pedigree is hardcore games, need to overcome. Those that haven’t yet dared to adapt their games, whether from a game play mechanic or monetization standpoint, to what they see as an inferior experience are sitting out. Where they’ll miss out is with other developers who are more comfortable with these new platforms piggy backing on their ideas or IP to create titles targeting mid-core.

An example of this is Funzio’s Modern War. It’s undeniably inspired by Activision’s Call of Duty franchise. Based on Newzoo data, U.S. and Europe revenues in May of this year for this game on iOS were more than twice that of combined revenues from all iOS games carrying the Call of Duty IP. Modern War is free-to-play, a model well adapted to by digital gamers, but one that Call of Duty has yet to adopt even on mobile.

From a consumer perspective, the mid-core digital game segment comprises players looking for a more in-depth experience than a casual game. Yet it’s not as time-consuming as a core game, both in terms of learning curve and game play progression. That’s partly because of the fundamentals of a platform such as mobile, where cumulative screen time is now substantial but split up between a multitude of functional and recreational uses.

This classification for mid-core is important. As mentioned, the segment includes former core players whose tastes in gaming are also affected by how much time they can dedicate to them. For some, it’s a byproduct of age and the responsibilities that come with it. As much as a gamer of this kind appreciates and seeks game play depth, they’ll likely show little tolerance for steep learning curve, slow startup curve or the inability to play in short bursts and come and go quickly. For instance, for them an RPG or MMO shouldn’t require tens of hours to build your character before having a great play experience.

The size of the prize

There’s no science to how you draw an exact line between casual and mid-core, nor between mid-core and core. But it is certain that there is room for a category for game products between casual and core. The key questions to ask have to do with the size of the opportunity today and its future potential. Newzoo approaches the questions from these perspectives: 1) how much of the current share of games and game expenditure goes to products defined as mid-core; 2) how many gamers who typically play hardcore games on PC and console also pay for mobile and social games; 3) what’s growth outlook based on ways to prevent core gamers from dropping out of games entirely as they age.

Current share of mid-core on mobile

Analysis of April and May iOS and Google Play Store data in the U.S. shows that of the top 20 grossing games, 45 percent on iPad and 50 percent on iPhone can be considered mid-core. These games are generating 40 percent and 45 percent of revenues respectively. Mid-core games seem specifically popular on the iPad in Europe, illustrated by 55 percent of games being mid-core, generating 47 percent of the revenue generated by the top 20 grossing iOS games in the territory.

Kabam’s Kingdom of Camelot is clearly the best performing mid-core game, taking the number two grossing spot in May just behind Ice Age Village, Zynga Poker and DragonVale depending on region and device. Kingdom of Camelot monthly earnings are currently approximately two and half times that of Infinity Blade II. Both are considered mid-core, and it’s significant to see how the free-to-play game is beating the paid one when it comes to dollars generated.

Core gamers who also pay for games on social and mobile

Newzoo estimates the current potential market for mid-core games to be at least $1.2 billion a year in the U.S. and another $1.4 billion in key European countries. This is based on 13.1 million American and 15.7 million European gamers aged 30 and up who currently spend money on both core console, PC and MMO titles as well as on casual games on social networks or mobile devices. The data hints that this audience is not buying PSP Vita or Nintendo 3DS, turning to mobile devices for their gaming on the go. It’s safe to say a good portion of this audience is exactly who is seeking mid-core type experiences on digital platforms.

Growth outlook: Save the core gamer

When comparing age groups from 10-30 year-olds and then 31-50 year-olds, 54 percent of core gamers stop playing core games while the drop in number of gamers in general is only 30 percent. In EU countries, the drop-off for the segments is less with 43 percent, but dramatically higher than the 22 percent for all gamers. If mid core games live up to their potential to keep the core-gamer playing immersive games, at least limiting the drop-off to the average share, that could represent an additional $600 million opportunity in U.S. and EU territories combined. Based on this underserved potential and the possibility to open up new markets, the mid-core gaming segment is certain to boast double digit growth figures for many years to come.

“I’m going to go on the record and say that I believe the middle class game is dead.” — Cliff Bleszinski

The quote from Cliffy B. is curious, considering his company is responsible for mid-core on digital’s current poster child, Infinity Blade.  The game is a clear winner in this new category. What makes it the perfect example of a mid-core game is how it combines hardcore qualities, such as its visual fidelity and the nature of the IP, with more casual game play.  In essence, it’s applying simple gameplay mechanics to a game that looks core in almost every other respect. Why is Infinity Blade the best known example of a mobile mid-core game It’s due to the effort to create a polished brand around the game IP as well as its extensive marketing, both requirements to launch it as a premium priced game on a platform that is still getting accustomed to the concept.

Other developers are achieving success more quietly, yet still proving the opportunity in mid-core. We mentioned Kabam’s Kingdom of Camelot. Another that operated in relative stealth mode over the past year is Lords and Knights from German publisher Xyrality. It entered the top 5 grossing ranks in Europe earlier this year. The game spent months slowly moving up the ranks, supported by online marketing that was purely focused on reaching current paying online MMO gamers. Xyrality’s approach to marketing their game didn’t garner mainstream attention. That’s where the next challenge lies for mid-core, in the debate on how to market these games. Take for instance Godsrule, a game to soon-to-be launched by Icelandic developer GoGoGic. It’s an art-rich MMO game that’s also cross-platform, allowing iPad and PC players to battle against each other. It’s shaping up to be an ideal title to further establish mid-core on tablet and generate some level of mainstream interest, even having the potential to draw in gamers who have traditionally only played their MMO games on PC. Whether the company realizes the potential, and puts marketing muscle behind it, will become evident in their run up to launch.

This is the interesting position for mid-core. Whether paid, and likely premium priced, or free-to-play, they will need to appeal to the more seasoned gamer, a consumer who is often a savvy entertainment customer overall. They can’t rely on analytics-driven marketing and chart manipulation, or low-hanging fruit tactics such as referral companies or viral/spam efforts like what we see too frequently in Facebook and Zynga games. They need to warm up the marketing engine, and rev it up early. Establish a strong brand around the IP, develop polished assets and video trailers designed to build early awareness, enlist traditional PR efforts that includes preview outreach, and use that early buzz to develop a community of fans well before launch.

Digital distribution has certainly changed the characteristics of the game market, from buying habits to game play behavior. Its reintroduction of a viable market for mid-core may be one of its most positive byproducts, setting the stage again for new IP and innovations in game experiences. It hasn’t changed how people decide to allocate their time and money when it comes to games and entertainment.

About the authors:

Peter Warman is CEO and co-founder of Newzoo. He previously worked at Europe’s largest interactive agency LBi. Prior to that, he was responsible for internet development at Reed Business, and operated as commercial director for a MMO for kids. Peter is a frequent speaker on the business aspects of the games industry. For more information on Newzoo, please visit www.newzoo.com.

Steve Fowler is a thirteen year veteran of the interactive entertainment industry. He is responsible for the brand identity and launch of the Halo franchise at Microsoft Corporation, Inc., and has held marketing and business development roles at Interplay, Sega Sammy Holdings, Inc., Square Enix, Inc., and Take-Two Interactive Software, Inc. He is the chief architect of the one of its kind annual industry conference the [a]list summit, and has been incubating new digital game publisher [a] list games internally at Ayzenberg Group for the past year. For more information on [a]list games, visit www.alistgames.com.

3D Market Growing In 2012

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The buzz about 3D has quieted lately, but consumer spending on 3D content has been growing regardless. IHS Screen Digest today released findings from a recent report, saying the market is “thriving” in theaters, home video, and video-on-demand.

 

The number of 3D-capable theater screens has quadrupled in the last three years, from 9,000 in 2009 to 43,000 in the third quarter of this year. Box office receipts for 3D features are up double digits in 2012 over 2011, from $6 billion to $7 billion. That tally was enough for 3D films to account for 22 percent of the global box office total last year.

US spending on 3D Blu-rays has nearly doubled in 2012, up 94 percent to $220 million. The research firm called that an especially encouraging sign as it bucks the trend of slumping sales for films on physical formats, and also noted that it is expected to continue growing until 2016.

According to IHS Screen Digest, the number of 3D TV channels is on the rise worldwide, although growth in the market has slowed. 3D video-on-demand is expected to do well in the coming years, with IHS Screen Digest expecting it to increase from $11.1 million in 2012 to $76.1 million in 2016.

“In an age where consumers have at their easy disposal a virtual treasure trove of entertainment options to draw from, the encouraging growth of the 3-D medium is remarkable to behold,” said Tony Gunnarsson, analyst for video at IHS Screen Digest. “The continuing expansion of the industry is especially significant when one considers that 3-D is but a small niche of overall digital viewing, and that consumers have to shell out considerably more money for 3-D products, which are priced at a premium and not necessarily an easy sell in these economically uncertain times.”

Hunger Games Dev: Free-to-Play Is ‘Ultimate Marketing Tool’

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Funtactix CEO Sam Glassenberg told GamesIndustry International that projects like his company’s Facebook tie-in for The Hunger Games are “changing the way Hollywood does business.”

 

“The lines are blurring,” Glassenberg said. “The old model was marketing would go and invest in cheesy advergames for the movie that nobody cared about, and licensing would run out and try to license some big console game. But now the walls between marketing and licensing are starting to fall.”

“You’re creating something that’s a revenue-generating profitable product on its own, but at the same time, it’s the ultimate marketing tool,” he added. “Because not only does it market the movie, it markets everything that comes after and keeps the audience engaged.”

Source: GamesIndustry International