Data And The Digital Shift

AdAge recently published an article concerning the distribution of data between marketers, agencies and Google. You can read the full version here, but the gist of it is that marketers make the obvious assertion that their first party data is highly valuable and they are reticent to share this asset with agency and publishing partners. They are wondering about the value proposition of exposing such a highly prized commodity to outside parties. Deep Focus makes the point  that agencies are great at taking existing customer data and finding new customers. Google promises that connecting a marketer’s first party data to the larger data ecosystem makes the marketer’s data more valuable.

I think this conversation is wrapped closely to the idea of barriers to entry. When TV stations dominated the media landscape only those with great means could launch a TV station or network. As media has become democratized any person with a voice and an idea has the opportunity to become their own media channel. The barrier to entry has been dramatically lowered to almost nothing.

In parallel media agencies have been important to marketers because they knew how to manage the complicated TV landscape through a strategic approach and economies of scale. As digital evolved into several disciplines and became a standard on the media plan the marketer’s in-house groups began to understand more about the medium. With the innovations collectively organized through ad tech and the programmatic approach barriers to entry to forge a direct path to consumers have dropped significantly.

We are seeing a shift into the digitalization of all media, in some way or another affecting TV, print, radio and OOH. Principles from the digital media ecosystem are becoming the characteristics of all media. Examples include the dynamic stratification of media, price discrimination and the rapid deployment and testing of data to derive performance.

All this is to say that it is easier than ever for marketers of a certain size to create in-house media strategy and activation practices. Data is a critical part of the decision making process.  It is a valuable asset and it is owned in-house at the marketer. Thus the first party ownership of data becomes an important catalyst for the move to an in-house media buying practice. With data being such a big opportunity for marketers, you can see how the activation of data almost takes precedent over the activation of media. In other words, the activation of media is really the acute activation of the right data, which then re-informs the decisioning process as new data is collected.

The points that Google and Deep Focus make about tying in-house data to the larger data ecosystem and finding new prospects are poignant. However, the programmatic approach makes it easier, and thus more likely that advertisers will continue to build agency-like (or agency-lite) in house media activation / data activation practices.

We are seeing the astute marketer create in-house programmatic media practices. Some examples of this include Netflix, Unilever, Proctor and Gamble, 1-800 Flowers, Electronic Arts and Guthy-Renker. Data is benefitting from the move toward automated activation, so data becomes another programmatically handled aspect of marketing, much like media is. So, I think to win the future (referencing Larry Page’s discussion at TED) marketers have to prepare for the continuing onslaught of data.  Matt Webb, CEO of BERG, in a recent Business Insider report about the Internet of Things (IoT), shares the following quote: “Connecting products to the Web will be the 21st century electrification.”  We are on path to generate and collect data from connected homes, cars, wearable devices (like my favorite the Jawbone Up), Connected TVs and who knows what else.  We’ll see smart offices, factories and cities. By 2018 there will be 19B connected devices globally.  Imagine what that number will be 10 years from now. It’s clear that data is valuable. There is more data and more variety data. The consequence is a future where data illuminates a (close to) real time view of our consumers and their usage habits.

Some marketers will create their own data and expand their data practice. Others will continue to forge strategic partnerships for data sharing co-ops; i.e. collecting second party data. We are still in the early stages of data application for media use in my opinion. As with any new technologies, methods or practices, those companies who get to practice early will generate a level of competency that will grow exponentially as time moves forward.

Image Source: Exchange Wire

‘Twitch Plays’ Past Prime

‘Twitch Plays Pokémon’ has had an incredible run. Thirty-six million views total, with peak viewership at 120,000 with such a massive amount of activity that it actually caused Twitch to crash at one point. In the end, 658,000 people participated while creating a large Reddit community and some incredible user-generated content. Brands were jumping in. Speculations that ‘Twitch Plays’ could become a regular mainstay in the gaming community were rife.

According to these charts, the fun’s all over.

‘Twitch Plays Pokemon’ rode the wave — the crest being where Twitch beat the Elite 4 — but that all came down crashing within a fairly short amount of time. Once this game was beat, the community moved on to the third generation, Pokémon Crystal. With a lot of momentum built from the initial run, one expected that this would keep going. Not so.

As of yesterday, it looks like there were just 20,000 viewers watching — a far cry from the initial spike in viewership and below the average of about 40,000 viewers.

Those are the hard facts, but it’s too early to tell if this is a lull or if the situation will recover itself. It appears the live streaming audience is a fickle one, and without an infusion of new and novels ways to be entertained, it is possible that ‘Twitch Plays’ may have just been a fluke one-off.

Game marketers are looking are going to be incorporating Twitch and live-stream gaming into marketing strategies, but perhaps may tread lightly. We’re only just getting an inkling if this is what we can expect for the future.

Social Is A ‘Battlefield’

The successful release of Battlefield 4 this past month by EA’s DICE studio has been making waves online, ranking at number 4 for top games on social media in October. Next up is the release of their ‘Second Assault’ expansion pack this Friday, alongside the launch of the Xbox One.

The presence of Battlefield on social media has enabled an involved and devoted fanbase to participate in the telling of their story. It doesn’t just happen organically — this requires months of planning and day-to-day detail to create something this cohesive. These efforts have paid off in a big way with a Silver Award win for ‘Best Overall Use of Social Media’ from EventTech, alongside such brands as American Express and Pepsi. We talked with EA’s Senior Online Marketing Manager, Daniel Lingen, to give us insight into what work kind of work is behind this award-winning social strategy, how they engage users, and more.

What’s the focus on now that you’re in full launch-mode with Battlefield 4?

Daniel Lingen, Senior Online Marketing Manager at EA

I think a lot of times when you launch a game, it kind of takes the focus of getting ready for launch. You spend a lot of time pushing pre-orders and talking about launch and how great it’s going to be once it launches. I think what’s interesting about Battlefield is that it’s just the beginning. A Battlefield product spans, oftentimes, for multiple years after it launches. So if we look at Battlefield 3, we were launching expansion packs for a long time for that game, which is great— it definitely gave our users a lot more to interact with — but it does kind of change the model away from this idea that we ship a packaged good to the fact that we ship a service. That’s what I like about the Battlefield franchise so much is that we do ship a service. We are still talking about Battlefield 3 in our channels, we are still talking about Battlefield 4 in our channels. There’s so many great pieces of content — especially UGC that comes in, that we can really celebrate all of it. So now that we’ve launched, a lot of our focus goes into, well, what are our fans doing We are promoting what they are doing within our channels. I think a really good example is our ‘Only in Battlefield‘ campaign, which had started by us creating a bunch of “moments” that had happened organically during play-tests, by creating these videos and kind of showing of these fan stories. We did enable our fans to create their own ‘Only in Battlefield‘ moments during the beta, but once the game had launched, some of the things we’re seeing were just far beyond anything we could have imagined. So as we move into post-launch, a lot of our focus becomes celebrating the awesome things that our fans do.

How do you go out and find the best UGC?

I have a couple people on my team that actively source videos that are coming up. We also do source things from communities like Reddit or Twitter, or a few things that people post on our Facebook. We’ve also set up an email alias that users can email their videos to. Beyond that, we really leverage our partnership with people like Ayzenberg to have eyes on the channel all time time. We work with Ian Tornay very heavily and he talks to a lot of the influencers so if they have a really cool video or something, they’ll send either to him or somebody on my team.

What does the Eventtech achievement mean to you?

A lot of the time, especially when you’re working on a franchise like Battlefield, you get extremely heads-down and you spend the time executing in your own channel without having the time to look up out of your own lane and see how you’re performing against other franchises. We do a lot of competitive research within the industry, focusing on competitors, but we don’t do a lot outside of it. For us, it really does help validate this theory that we have that we are leading the industry and that as much as reading these social media blogs and reading about what other people have done in the world, it’s about getting off the couch and doing your own tests and creating your own campaigns. As much as we can read about what our competitors are doing and what the industry is doing, the more things that we do on [our own], the better that we’re able to get ahead of our competition and start defining what social media best practices are instead of reading about them.

What social network do you consider as the most important in meeting your goals?

So we have specific goals that we set across the different channels. I think one of the ones that we find really important and kind of like a lifeline for us is Facebook. Obviously we leverage the other channels but Facebook we rely really heavily on to do a lot of our metrics-tracking and our analytics. Facebook has a lot of really great Insights that you can use to find out more about your team. They also have several different types of analytics that you can track. When we sit down at the beginning of the week and actually plan out what the goal for each post is, we can sit down and say, are we going for awareness Is the purpose of this post to attract new people to our Facebook page If so, then we have a complete set of best practices for that type of post. Or we could say engagement— is our hope here to have people engage with the brand We’re not looking necessarily to bring new people in, but we want them to comment on the posts, we want them to ‘like’ the posts. We have a complete different set of best practices for those. Finally, conversion; so if we’re trying to sell the game in a specific post, how are we doing that We apply those best practices. We use those three pillars, which are three distinct pillars that we can set up within Facebook analytics, and we use that to define what the post schedule will look like over the course of a week. We’re not always looking at just one post, we’re not looking at promoting a certain trailer or pre-order message, we’re looking at how we can mix up our UGC, our interactive posts, any of the content that we are releasing with Electronic Arts. We look at how we can leverage all that into one cohesive, multi-channel story. That works with Facebook leading the way.

So do you plan this week-to-week?

We plan out an entire campaign very high-level, so we’ll plan about 12 months at a time on a month-to-month basis. Then, once we are about 3 months out, that month, we will break it down week-to-week. Once we are looking at that month, we start breaking down the weeks into days. So, for example, we are looking at the month of January right now, so we’ve already talked about what we were planning for January months ago, and now we’re going to re-evaluate that. Is that still what we want to be talking about Yes, that is. Okay, what are we going to be talking about on a weekly basis What’s the story that we want to tell each week We define all of that. So now that we’re close to January we’ll sit down and say, what are we talking about each day For the first week of January, we want to put up 6 engagement posts, 4 conversion posts, however many awareness posts— that sort of thing. We look at what we have coming out and build the calendar from there. We find that doing it that way instead of just reacting, results in us having a cohesive story over time as opposed to a bunch of wild marketing messages that might not even tell a story.

You can follow Lingen on Twitter @huskyhog.

This Week’s [a]list Jobs – September 25

Opportunity is missed by most people because it is dressed in overalls and looks like work.”- Thomas Edison

Picky about where you’ll work  A couple high-flying game makers have made Fortune’s list of top small and medium size company workplaces.

Here are this week’s [a]list jobs:

  • Microsoft, Xbox – Marketing Manager (Redmond, Washington)
  • Google, Android – Head of Regional Marketing (Mountain View, CA)
  • YouTube – Partner Marketing Manager (San Bruno, CA)
  • Game Duell – Head of Social and Mobile Games (Berlin, Germany)

[a]list daily is your source for the hottest job openings for senior management and marketing in games, entertainment and social media.

To see last week’s jobs, click here.

Building A Game Company On Platforms, Not Hits

Digital Media Wire’s New York Games conference kicks off tomorrow with a keynote by a different kind of game company, one that stresses success in the digital games business comes from a careful platform strategy and not necessarily chasing big hits.  New York-based Arkadium thrives on following a model that contrasts someone like a Rovio, which found huge success in digital games seemingly overnight with its first Angry Birds game. While not exactly a household name, Arkadium has been around for 12 years making games for a huge segment of the casual gaming audience, the ones who dawdle on web sites for their favorite TV shows and online portals for major media companies.

Arkadium co-founders Kenny Rosenblatt and Jessica Rovello

Arkadium is co-founded by husband and wife team Jessica Rovello and Kenny Rosenblatt. They’ve released more than 300 games. According to Rosenblatt, they boast about 10 million active users. Yet while the company’s games are on the most popular digital game platforms, Facebook, iOS and Android included, it credits its longevity to platform partnerships with companies like Comcast, Xfinity, CNN, the Discovery Channel and, most recently, Microsoft.

Ned Sherman, CEO and publisher of Digital Media Wire, says Arkadium is perfect for its conference keynote. For its New York event, DMW turned the focus to helping digital game makers find the money. Many of the sessions revolve around monetization, and the speaker list has that air of pairing successful players in the space, whether game makers, publishers or marketers, with up-and-comers. Aside from knowledge sharing, there’s also the opportunity for more meaningful partnerships, for instance attracting investors. One of the programs on the conference agenda is a pitch session where a handful of promising startups have a chance to present their business plan to a panel of venture capital firms.

“As it becomes increasingly more difficult for indie developers to reach an audience, there is a greater need for them to partner with companies like Arkadium that have the experience, resources and channels to reach an audience and increase the chances of success in a crowded market,” Sherman said.

Arkadium’s success going forward may hinge on how it’s putting a lot of attention on one platform, Windows 8. It struck a deal with Microsoft before the launch of the operating system to become a preferred games developer, and is in-fact now the official developer of updated versions of classic bundled-in Windows games like Minesweeper and Solitaire. This past spring the company turned to outside funding for the first time since its founding, raising $5 million in a series A round with Edison Ventures. That money may have gone towards what Arkadium announced some months later. In July, it said it had developed a metrics platform for Windows to rival performance data app makers get from the likes of Apple, Facebook and Google. At the time, Rosenblatt told Inside Social Games that robust analytics that could help app makers with user acquisition were one of the “major barriers” on Microsoft’s platform.

We had a chance to talk with Rovello and Rosenblatt to get more insight on how Arkadium has found success and, as a preview of tomorrow’s keynote, what it hopes to impart on other indies in the space.

Tell us about the strategy to put a good chunk of your resources behind supporting Microsoft and Windows 8.

Rosenblatt: We have always charted our own course and did what was right for the business. We saw the rise of Facebook gaming, we saw the rise of iOS and Android, and an opportunity came from Microsoft when they were launching Windows 8 to be one of the premiere providers of games on that platform, and be a close partner to Microsoft. We knew that they already had the number one gaming console, we knew that they had 800 million Windows 7 devices out there, and Microsoft had a lot of money to spend to make sure that over time Windows 8 would be a dominant platform. So we looked at the value creation from companies like Facebook and what that did for Zynga, and a company like Apple and what that did for Rovio, and we said here’s our opportunity after waiting 12 years.

We decided to commit to that platform because they knew games, and we knew over time they would gain market share on mobile and on tablets because those markets are too big for Microsft not to be a part of. So we decided to go that route because we knew the value it would build for our business long term versus trying to differentiate ourselves on Android and iOS, which are cluttered. This is our opportunity to be number one.

Arkadium says its pre-bundled Windows 8 games reach 150 million players

DMW Conference organizers have hinted that this keynote is going to be a unique one in some respects. How will it be unique?

Rovello: I think what [people] should expect is something a little bit different. We’ve been in the industry a long time. A lot of times you don’t get a dual keynote or a husband and wife team. I think we’re just different all around.  A New York audience is very different than a West Coast audience as far as our industry goes. We believe that we’re going to be speaking to a lot of people dealing with issues we were in five, six, 10 years ago. We really want to help people on how they can effectively grow their business without needing to take too much capital, without losing control, without worrying about where that next hit is coming from, and will they survive. Really it’s about smart tactical [ways] for how you can really fundamentally grow a gaming business.

As a teaser, what are some of the big takeaways attendees can expect?

Rosenblatt:  What we’re trying to get across is that there are opportunities for game developers to build themselves to last. It’s very rare to find an independent game developer that’s been around for 12 years and hasn’t gotten itself scooped up by a larger game publisher. I think we’re going to be talking about one of the tactics we’ve used to stay independent, love what we do, and build a real business. One of the core principles we want to get across is that while games are a hit driven industry and a lot of game companies’ revenues are directly tied to the success of their games, there are certain tactics you can take to even that out so that even if you don’t have a successful title under your belt, there are ways to bring in the revenue and keep the lights on.

Rovello: One of the things we’ll be talking about, what Kenny was just touching on, is how to build a business for the long term without having the deep pockets that some of your competitors do. One of things we took to heart at the beginning was to be able to use our clients to extend our brand. Initially, we have a very large distribution network on the web through these top media companies and portals. They’ve been hosting and distributing our games for many, many years. For us, the way that we’re able to get above all of the noise is by establishing our game brands early on, on the web and the mobile web, through our distribution channels. In addition to spending hundreds of thousands of dollars [on promotions], we have additional marketing channels where we can get the word out about our games.

You sound like a big publisher despite being an indie, talking about building brands and channel marketing. How did it come to be that Arkadium approached its business so differently than most independent game developers?

Rosenblatt: Maybe because I come from a marketing background, or maybe just because it’s what we’ve done for so many years, it’s become ingrained in our DNA. Really we don’t think about other game developers as being our only competition. We see Netflix original content as our competition. We see HBO series as our competition. Anything that people are doing to get enjoyment for a couple minutes a day is potentially a competitor to us. We really need to think that way. It’s about media content consumption as opposed to game players. We know our demographic is so broad that it could be somebody watching Game of Thrones, or somebody who’s watching Food Network.

Arkadium’s services include building branded game portals

Where have you had the most success with generating awareness when you launch a new game?

Rovello: We have a number of users that we can market to already.  We have a large database of users who play our games prolifically. We reach out and try to get them interested. We do soft distribution through our online distribution network. We either do teasers of games or light version of games, and then we do traditional digital marketing — ad buys when titles are released, then work to get editorial coverage and spotlight promotion [in app stores] if we can.

Autodesk Takes Aim At Indies

Autodesk’s entry into the indie developer market last month with 3D modeling and animation tool Maya LT may have surprised some observers who are familiar with the company’s array of powerful professional tools that typically cost thousands of dollars. The [a]list daily spoke with Greg Castle, senior marketing manager at Autodesk, about the company’s initiative to address this growing market.

“At Autodesk traditionally we have provided the tools for the big boys, for people like Cameron to develop Avatar and Epic to create Gears of War,” Castle said. “With the changing of the industry, so too we must change. With the influx of indie development, more accessible tools, more accessible platforms, it’s important we provide tools for this new demographic.”

This was really a marketing-driven product development effort, seeing the needs of the market and modifying an existing product to suit that. “You’re spot on there,” said Castle. “We wanted to get out a product in fairly quick order to address this need. The plan for the product in the long term is a focused product on adding in features that are specific to indie development.”

The prospect of a fast-growing indie market drove Autodesk to study and work with smaller developers “in order to see what parts of our tools they’re most interested in and what their needs really are,” said Castle. “The two main things we discovered are that indie developers are only using a small segment of the power of our tools, and that our tools are just too expensive for a lot of them to afford.”

Autodesk then went through the process of figuring out what features of the tools were most important to smaller developers and what price points they’re most comfortable with. The effort showed that the general needs of indie game developers are similar across platforms, from mobile to Facebook to PC and console. “People want maximum reach for their games, and they’re trying to develop games that are accessible on all platforms,” said Castle.

The end result, Maya LT, is specifically targeting smaller developers. “We looked at all our tools and tried to determine which tools indie developers would be most interested in,” said Castle. “Game developers are predominantly using the renderers of game engines, so they don’t need a tool to doing rendering. The viewport in Maya can be used to preview assets.” That saves time for developers building assets, enabling them to check their work without the need to create a new build of the game.

Of course, the pricing of the software is a critical issue. Indie developers won’t even consider the typical pricing structures for Autodesk’s professional packages, which can run thousands of dollars per seat. When you’re working on a mobile game, that’s a dealbreaker for a small team scraping by. Pricing is also an issue for independent artists or small studios that provide art under contract to developers. Autodesk put a lot of thought into the pricing options for Maya LT.

“We created a flexible pricing plan, with two options,” Castle explained. “The rental plan works out to be $50 per month, with quarterly or annual licenses available that can bring the price down to about $35 per month. For perpetual, the price is $795 and then the product is yours.” You can try out the product on a rental basis and see if it works for your development process, and then purchase the product outright. “We believe a bunch of people will do exactly that,” said Castle. “The amount of indie developers who are outsourcing is huge,” Castle noted. “For freelancers to be able to bill back the cost of the software is something I think they’re going to like.”

Autodesk is committed to the task of opening up this market segment, and they understand that developing the market and refining the software is something will take time. “This market segment is super important, we want to support it as much as we can, and they have very specific needs,” Castle pointed out. “Why not create a product that is just for these guys There will be more frequent releases with Maya LT than with regular Maya. This isn’t a short-term play.”

Accordingly, Autodesk will be patient with its marketing of Maya LT. “We don’t want to go and just spend millions of dollars and get the word out to everybody in the world,” Castle said. “We’re taking a more measured approach to our marketing and letting it spread in a more organic way. We want to make sure that the messaging is right and the product is right. I would expect that the product and the messaging might morph slightly after the launch, when we see what customers want.”

That customer engagement is key to the future of the Maya LT. “Part of the plan is to be very engaged with customers,” said Castle. “We have a small team of people internally with different specialties who we’ve formed into a task force, to go out and constantly be interacting with customers. We plan on being very responsive to the customers.”

Autodesk realizes the difficulty of finding indies and informing them of the product, given that indies are all over the world with no one gathering place. “We definitely see that as a challenge, especially with the worldwide dispersion and how strong it is in different areas,” Castle agreed. “I think leveraging the community for word-of-mouth marketing and getting them all onboard and comfortable is really going to be paramount to our success.”

The challenge is similar to marketing an MMO, where you have to convince not just a single person to try it but you need to get an entire group using it. “That’s an interesting analogy, and I agree,” said Castle. “There is definitely a strong sense of that in tool usage. Art houses do identify with the tool they use a lot of the time.”

Give Me A Break, Google

Google is calling the next version of the Android operating system Kit Kat in keeping with their tradition of naming the OS versions after food items. This time, it’s a trademarked food item that Google struck a licensing agreement with Nestle (Hershey licenses the Kit Kat name from Nestle in the US). If you visit Google’s Android page you’ll see a Kit Kat bar with an Android-themed wrapper.

This cross-promotion deal (which involved no money changing hands) has a contest going that will put vouchers for a free Nexus 7 tablet and Google Play credits into some Kit Kat bars. There will even be some Android-shaped Kit Kat bars appearing in some markets.

Check out this clever commercial extolling the high-tech features engineered into the Kit Kat bar.

“One of the snacks that we keep in our kitchen for late-night coding are Kit Kats,” said John Lagerling, director of Android global partnerships. “And someone said: ‘Hey, why don’t we call the release Kit Kat ‘ We didn’t even know which company controlled the name, and we thought that [the choice] would be difficult. But then we thought well why not, and we decided to reach out to the Nestle folks.”

A BBC report described the process: “Mr Lagerling said he had made a ‘cold call’ to the switchboard of Nestle’s UK advertising agency at the end of November to propose the tie-up. The next day, the Swiss firm invited him to take part in a conference call. Nestle confirmed the deal just 24 hours later. “Very frankly, we decided within an hour to say let’s do it,” Patrice Bula, Nestle’s marketing chief told the BBC.”

The brand promotion is significant, with over 50 million KitKat bars in 19 countries featuring Android and the chance to win a Nexus 7 or Google Play credits. The promotion was even kept secret from Google employees, with the company referring to the new operating system release internally as ‘Key Lime Pie.’ The wrappers began production two months ago, yet the secret was maintained.

The promotion was a little more complicated in the US, since Hershey licenses the KitKat name here. Google had to work out a deal with Hershey’s so that US KitKat bars would be part of the promotion as well. Nestle is commemorating the partnership with 500 specially-produced KitKats in the shape of the Android logo.

How did the whole deal arise Apparently Android engineering head Hiroshi Lockheimer loves KitKats to the point where a KitKat was his Gmail icon, and the Android team even decorated his door with KitKats at one point.

Source: The Verge

Nintendo’s Fall Gambit

Nintendo made news last week with two announcements, one widely anticipated and the other a complete surprise. With these announcements Nintendo has laid out its plan for the 2013 holiday season and given us a sense for its long-term strategy.

The announcement that the Wii U Deluxe Edition will be priced at $299 (a $50 drop) has been expected since before Sony announced the PlayStation 4 at $399. Slow Wii U sales this year have had analysts suggesting a price drop, with Nintendo CEO Iwata firmly resisting the idea at every opportunity. Since E3, Wii U sales have not revived even though Nintendo has announced several more compelling games coming soon.

The price drop is not as sweeping as it could have been. Effectively, Nintendo is dropping the 8GB Basic Edition of the Wii U, which never sold very well at $299. For an extra $50 you could get a copy of NintendoLand (a $50 retail price) as well as a 32GB version of the Wii U, so it’s little wonder the Wii U Deluxe Edition grabbed most of the sales. (The extra memory was especially useful since the operating system takes up about 4 GB of space.) From all reports, Nintendo will not be making any money on a 32GB Wii U sold for $299, so the company will be depending on software to bring in profits on that line.

The lineup of Wii U software going forward looks better than it has, with Nintendo preparing surefire sellers like Mario Kart 8 And Donkey Kong Country: Tropical Freeze. Still, the third-party lineup is thin, and all indicators are that publishers like EA and Activision won’t be putting much effort into new Wii U titles. If you’re a sports game fan, or a shooter fan, or an RPG fan, the Wii U likely won’t offer you many choices in the foreseeable future.

Realistically, the Wii U is not going to sell huge numbers when all of the attention and enthusiasm of gamers is focused on the Xbox One and the PlayStation 4 this fall. The pricing of the Wii U at $299 is smart, because dropping it to $249 probably wouldn’t boost sales much. There’s not all that much great software to be had for the Wii U still, so Nintendo has less ability to make up for losses on hardware with software profits. Thus, the $50 drop gives the Wii U some necessary psychological distance from the PlayStation 4 at $399, yet keeps Nintendo’s losses on hardware at a minimum.

Nintendo’s ability to succeed with the Wii U is not dependent on achieving status as the number one selling console. What’s important for Nintendo is truning a steady profit from the Wii U and its software lineup, and that’s certainly doable. The Wii U, with some marketing help and perhaps another price drop, should be able to hit GameCube like numbers of 30 million consoles sold. While far below the Wii’s performance, this is still a very solid goal that can generate some healthy profits for Nintendo down the road.

Meanwhile, Nintendo’s surprise announcement was the 2DS, a $129.95 slab-like device that plays DS and 3DS software (albeit without a 3D display). Essentially, the 2DS reduces costs on the 3DS by removing the 3D screen (which people rarely use, from all reports) and simplifying the case by removing the hinge. In a world where smartphones are ever more common among kids, providing a lower-cost way to access Nintendo’s increasingly powerful library of 3DS titles is a solid move that should be quite successful.

The difficult part of the 2DS/3DS line is the nomenclature and the possible confusion it may create in consumers, but some marketing and effective communication to retailers should make this a small issue. “Can it play the new Pokemon game †“Yes, no problem!†That’s really all you need to close the sale, especially when the $129 price tag is displayed. When this device can hit $99 (probably in a year), sales should really take off.

Price is the key marketing strategy here. Sure, the 2DS may not be as convenient for carrying around as the folding 3DS. You can’t slip it into a pocket, for one thing. But that pants pocket is probably already allocated to a smartphone, so this may not matter. What’s really important is that it gives gamers a lower cost way to get into Pokémon or Animal Crossing. Those young adults with fond memories of Nintendo now have an easier way to get their fix.

Third-party support for the 3DS has been strong, and continues to look good for the future. Of course, creating software for the 3DS is a lot less expensive than creating a Wii U title, so this should not be surprising. The continuing stream of interesting games for the 3DS is its vital lifeblood as it becomes the leading console for Nintendo.

Of course tablets and smartphones will continue to command attention from gamers, putting additional pressure on Nintendo to sell handheld consoles. The $169 3DS and the $199 3DS XL will have a tougher time in the year ahead, as tablets and smartphones continue to get more powerful and less expensive. For $199 you can get a 3DS XL, but for that same $199 you can get a tablet with a 7†HD quality screen and the ability to play hundreds of thousands of games as well as surf the Web, play movies and music, and an astonishing range of other capabilities. That’s a tough fight to win. Heading to the $129 price point (and someday to $99) is Nintendo’s best weapon in this fight.

Fueling The Xbox One Campaign

Mountain Dew, a division of PepsiCo, offered gamers a sweepstakes to win Xbox 360 consoles leading up to the launch of Microsoft’s console back in 2005. This year, the soft drink maker has added gamification to the equation, enabling fans to play their way to winning one of over 5,000 of Xbox One consoles this fall every two minutes between November 5 and December 9. The Every Two Minutes promotion (www.Every2Minutes.com) is the company’s biggest video game campaign ever.

“With Xbox 360 we had a groundbreaking sweepstakes where consumers won a console every 10 minutes, but we’re letting users control their own destiny with Xbox One,” said Todd Kaplan, director of brand marketing, Mountain Dew. “People can get codes from Doritos and Mountain Dew products and leverage those codes for points. It’s not a sweepstakes. If you want one bad enough, you gather as many codes as you can and use those points for online auctions beginning November 5 from 9 pm to 2 am. We feel this program is groundbreaking and unique. The scale of the program and the number of Xbox Ones we’re giving out is huge. And we believe the gamification of this program connects perfectly with this gamer audience.”

Mountain Dew is took this gamification into the real world over the Labor Day Weekend at PAX Prime in Seattle. The company announced the program to attendees on Friday morning and offered the 100,000 attendees a chance to win one of 30 Xbox Ones and other prizes like 2014 PAX tickets, Turtle Beach Headsets and Polk Audio SurroundBars by taking part in a QR scavenger hunt.

“PAX is the biggest consumer expo in the U.S. and there’s no better place to launch a program like this then at the center of gaming itself,” said Kaplan. “We gave PAX Prime attendees a chance to win one of six Xbox One systems that will be delivered before release day. They’ll be the first people in the world to play this console. We also gave away 24 Xbox One consoles to attendees. We partnered with PAX to place QR codes throughout the convention center and attendees collected points. Over 1,000 gamers attended the live auction on Sunday with a real auctioneer. The more they engage, the more they can win everything from the consoles to shirts and headphones and even in-game items.”

It was a real world version of the online contest that will launch November 5 and feature over a half a million prizes. There was also a physical DEW and Doritos marketplace in the Washington State Convention Center, which had more than 60,000 items that attendees could get by redeeming their points.

“In addition to the more than 100 codes located throughout the convention center, we used the DEW social media channels to let PAX attendees know that there were a limited number of high-value QR codes located in places around Seattle like Pike Place Market and the Space Needle,” said Kaplan. “People were so engaged in the Every 2 Minutes promotion that they literally ran from the convention center to get them . . . they were gone within five minutes.”

The PAX campaign was a success. In just under three days, PAX attendees scanned the “Every 2 Minutes” QR codes more than 155,000 times.

Kaplan said there will also be an in-game component to the marketing this fall, which allows gamers to collect and bank points by purchasing specially marked DEW and Doritos products. Among the virtual prizes are a Mountain Dew/Dale Earnhardt Jr. paintout for Forza Motorsport 5, a Mountain Dew branded sword and shield for Ryse: Son of Rome, a Mountain Dew Roller Hog for Dead Rising 3 and a Ninja costume in Doritos brand colors.

“Mountain Dew and Doritos have a strong connection to the gaming space,” said Kaplan. “These products are endemically consumed as part of the gaming experience. People are constantly engaged in games and consuming our products. Over the years we have launched limited time Mountain Dew Game Fuel product and had great results. This year we’re launching Citrus Cherry and Electrifying Berry and there will be a special Doritos Gamer Pack made for the ideal gaming experience.”

Although the Xbox One is priced at $499, pre-orders have already been halted at major retailers in testimony to the pent-up demand. Microsoft’s recent policy changes and the announcement of strong support for indie developers seem to be going over well with the fans, and Kaplan as well.

“We feel good about Xbox One,” said Kaplan. “We’ve partnered with Xbox in the past. We think this new console is groundbreaking technology. It will really change the game for gamers this fall and beyond. The next generation of video games opens up new connectivity and we’ve seen an explosion of multiplayer games. The Kinect technology and visual image recognition and how that’s evolved — knowing if you or your Mom walks into the room — is amazing. The graphics and experiences are bringing a more realistic feeling to games. We’re glad to be a part of it. Gaming is a social experience, and our brands are meant to be part of shared experiences.”

With Xbox One pre-orders sold out, this promotion should connect with a large audience. Even those fanboys still upset with Microsoft aren’t going to turn down a free $500 console. And having Xbox One on all of that packaging for this fall and beyond won’t hurt Microsoft as it battles Sony in the next generation console war.

Xbox Co-Founder Warns Publishers May Vanish

The impending arrival of a new console generation has been eventful, with rapidly changing Xbox One policies after a chilly initial reception from games media and consumers. This swift, responsive change was unlike the Microsoft of old. The [a] list daily sat down with Xbox project co-founder and Microsoft veteran Ed Fries recently to talk about where the game industry is headed, and what he thinks of Microsoft’s swift policy changes.

“I was impressed,” said Fries. “I was concerned that they wouldn’t change, and I was impressed that they did change, and changed quickly. They clearly are responsive to feedback, and I think that’s great.” Just the fact of changing that quickly is a necessary thing in the market these days, Fries believes. “We all make products for customers, and it’s important that we listen to our customers when they have things to say to us. It’s a lot more true than it was in the old days. If you think about games, we used to spend three years making games and stick them in a box, and people liked them or they didn’t like them.”

“Now it’s much more direct feedback from customers,” Fries continued. “We test things a lot, see what’s working and what isn’t working and the launch is the beginning of the process. I’m talking more about free-to-play games now — you’re basically developing it with your customers. We have a much more interactive relationship with our customers. If people aren’t happy they let you know, and they can cause trouble for you. I think it’s important for companies to be customer-focused and be known as companies that listen.”

Fries was surprised that Microsoft is allowing World of Tanks on the Xbox 360 “Yes, and the indie publishing announcement surprised me as well,” Fires acknowledged. “I think, like a lot of people now, I’m waiting to see the details. I gave a talk last year about how the world of games is changing, and how it might be difficult for big parts of the industry to change along with it, for big publishers to change or for developers to change. I talked specifically about this issue, about free-to-play and about the barriers to consoles truly adopting free-to-play. I’m glad they’re heading that way.”

Adopting new business models is hard, and Fries understands the difficulties ahead. “The challenges with technology are often not guessing what the future’s going to be and then building it, it’s being in the right place at the right time with that technology,” Fries pointed out. “It’s very easy to be too early. You describe these as business issues, but maybe cultural is more to the point. It’s hard for these companies to change. You see that all the time — it’s the innovator’s dilemma.”

The future for the games industry is uncertain, and Fries sees the possibility of momentous changes. “Who knows if there’ll be big publishers in the future There don’t have to be,” Fries said. “Maybe the world of the future doesn’t look like that. Maybe it’s just lots of small developers, getting together and then breaking up into little teams all over the world, that’s where great games are going to come from. Big publishers were formed because games were really expensive, there were big distribution issues. Walmart didn’t want to deal with a hundred companies, they wanted to deal with four or five. A lot of those things changed with digital distribution. Maybe what we’ll see in the future isn’t like what we’ve seen in the past. What does that mean There are winners and losers all through that.”

Fries continued, “It’s not necessarily a better future for anyone. If you’re at a publisher, it’s ‘Oh, maybe my future is not so good.’ Even from a developer point of view, it might mean you get a hit and then you don’t get a hit again. Angry Birds this year, next year it’s Supercell, the year after it’s Mojang. It’s random little groups all over the place. Maybe that’s where the most creativity is going to come from. Customers will just pick and choose, as they always do, whatever’s hottest, most fun at that time. That’s a very different world we have to think about. Even as a developer, you invent something great — Call of Duty — you want to make Call of Duty five, six, and seven, you don’t want to have to put lightning in a bottle twice, three times. That may be the future we’re facing. We just have to accept that.”

The value is ultimately in the game, not in the publisher or developer. Fries noted “We’ve always liked to believe there’s developer brand equity — ‘I love Blizzard, everything that Blizzard makes I’m going to buy because I’m a Blizzard fan.’ The reality has always been it’s the game brands we really care about. ‘I like playing Candy Crush‘ and then you find Puzzle & Dragons, and you don’t even know who makes it.”