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Number
46: March 31, 2004
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This week in Katydid:
Making
a Positive First Impression
I am apparently a geek. One only has to ask my long-suffering wife
who has had to endure my occasional obsessions with technology. On a
recent trip to the library, I came home with a potential widow maker, a
450-page, large-format, full-color index of obsession. The book is
Supercade: a Visual History of the Videogame Age 1971-1984 by Van
Burnham and while I am cognizant of my potentially fatal geekness, I
must say the book is replete with lessons for marketers.
In my defense, I am not necessarily a gamer. I have never owned a
videogame console for three reasons. First, I have a chip on my shoulder
because my family never had the disposable income to purchase such a
luxury. Second, if I have the time for entertainment, I would rather put
myself in the hands of a master writer or filmmaker. Third, personal
computers have been part of my life for about as long as videogames have
been around, and until very recently, the gaming experience on a
personal computer has always been superior to the game console.
This is probably the main reason the videogame industry tanked in
1984 and while Burnham's book does not set out to examine the contributing factors, the rise of the PC in the late eighties and nineties accompanies the
fall of the videogame industry. Of course, many of the same factors that
brought that industry down were behind the bursting of tech bubbles in
the late nineties. A new bubble looms for interactive entertainment.
According to a March 10 article in
Electronic Gaming
Business:
"The game industry is poised for even more growth in the next
four to five years as most researchers see the hobby proliferating
outside of its current core demographics, growing new niches in the
handheld and mobile arenas and bringing retail venues closer to the
neighborhoods where people shop."
Most forecasters expected the industry to consolidate after the 1984
bust. That did not happen but power has shifted from Atari to
Electronic
Arts (EA) with Sega and
Nintendo maintaining a consistent presence.
Microsoft with their Xbox is poised to make a major play for industry
power as well.
The innovation of the seventies and eighties was the shift from
"passive" entertainment to interactive entertainment. These
were stories (albeit simplistic narratives) that you could participate
in. As Burnham states in the introduction to her book:
"The golden age of videogames marks the point in time when
society shifted from an analog to digital culture. Personal computers.
BBSs. Compact discs. Email. Desktop publishing. Mobile computing. Unix.
The Web. All innovations that were made possible because a generation
was exposed to the future of technology in a way that made it accessible
and, most of all, fun – through videogames."
Now online and wireless gaming appears poised to mark the next wave
of growth in interactive entertainment. Keri Allen, an analyst from
Jupiter Research was interviewed for the article in Electronic Gaming
Business:
"Allen believes that connectivity is going to be one of the
catalysts for broadening the base. " Online gaming will almost
certainly be huge," she says, predicting 28 million online gamers
by 2008. Downloading of new games and levels for existing titles will be
commonplace by then. She recommends keeping a close eye on 2005, a key
year for connectivity as the wireless PSP and connected consoles of the
next generation start to roll out. 2006 will be when the online industry
will begin to see "a huge surge of interest," predicts
Allen."
So what marketing lessons can the interactive gaming industry (and
all of us) learn as they prepare for the next boom?
People Reject Products They Don't Know How to Sell
Television manufacturers universally rejected the first videogame
(essentially Pong) developed by Ralph J Baer in 1968. GE, RCA, Sears,
and Zenith all passed. Initially, Magnavox also passed, but eventually
decided to fund the project.
Television itself was a boom industry, albeit one that was maturing,
and while the executives could all see the merits of the invention, none
could get past their own resistance to change, which they buried under
fears of causing blindness in customers or damaging their sets.
With a new product, you can't expect your audience to imagine, you
have to create the story for them. Essentially, you can't expect to
create a great product and let someone else figure out how to sell it.
You have to show them how it can be sold, and then prove that you can
deliver with the product.
Art and Commerce Must Cooperate
Exploit talent at your own peril. Many of the artists who created the
successful videogames went uncredited and received no royalties on their
titles. As a result, it was common for the talent to leave the company
and set up a competing shop.
Conversely, ignore commerce and risk starvation. Many of those
talented artists had no idea how to run a business. Some of their
products were ahead of their time or appealed to the small market
segment of "people just like me."
Product development and marketing benefit by being able to feature the
program designer. It becomes easier to introduce new products if the
designer is a known quantity. While companies often fear they will be in
bidding war for their own talent, theyare so rarely appreciated that artists will be very loyal to a supportive company.
In a Boom Market, Bad Ideas Make Money Too
Many of the companies that came to prominence in the eighties started
in a garage and grew to huge proportions only to dissolve completely by
the nineties. One could say they were shortsighted, and didn't diversify
early enough, but nearly every company was caught flat-footed by the
bust.
When everything you touch turns to gold, you think you're Midas. We
only know for sure that our strategy is successful in comparison to our
peers. You need to track trends much more carefully in a boom market to
look for subtle changes over time. You'll have to filter out a lot of
noise, but the survivors are the one's who've confirmed their strategies
and heeded the early warnings.
What's the first trend that should be a warning for you to think about
next steps? A rapid increase in revenue.
Nothing lasts forever. Darwin rules!
A bust is merely a change in environment and sometimes you're just
not adapted to the new digs. Every gambler knows the winning streak will
end, but not on this hand. Like characters in a Looney Toon, most of the
videogame companies just kept running even after the bottom dropped out.
Everyone knows they need to diversify and stay ahead of the market
with innovation, but that enthusiasm and easy money is hard to ignore.
If you're a public company, the stockholders will want you to keep
mining that vein until the gold runs out; but they're planning to sell
their shares just before it does.
In conclusion, the marketer should be planning the next strategy
while the current one plays out. You have to be skeptical of your own
success until you've proven to yourself why your strategy works. This
way you'll feel less like Pac-Man chasing rewards and more like the
operator at the controls, which means you're more likely to see your name at the
top of the high scores.
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When Is Entertainment Passive?
Just because entertainment is interactive does not mean that it is
necessarily active. The very rules of the game limit the number of
possible storylines. Simulation games such as The Sims have a broad
range of playing strategies and outcomes, but they cannot keep up with
the imagination of the participants.
Every so often, someone tries to create interactive novels or movies
and the results are never strong. Somehow, the stories aren't as
interesting.
I like to put myself in the capable hands of an artist and see where
they want to take me. It's an opportunity to see life from another point
of view. The better their skill, the more likely I am to become immersed
in that world. At that point, my imagination takes flight and I can
create new storylines of my own. Far from passive, my imagination is
actively engaged.
When the medium essentially turns the reigns over to me, I'm never
satisfied with the range of options I have. I can turn my horse down any
of a number of prescribed paths, but I can't take it cross-country on my
own adventure. This frustrates my imagination and makes it more passive.
Online gaming carries the potential to be more engaging because the
countryside is populated by characters that are operated by real people
with their own imaginations. Unfortunately, the majority of those
operators will be sorely lacking in imagination.
So, opportunities will arise for artists within the new medium who
can occupy the world, play with its rules and boundaries, and provide
imaginative pursuits for the other travelers. Successful companies will
look for ways to elevate these artists, providing tools to them and
exposure to increase their reach.
Sadly, this kind of interactive experience with a lifelike world is
open to us every day and few of us choose it. All we need to do is take
the chance of talking to the strangers around us in order for us to
become part of each other's story.
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Kind regards,
Kevin Troy Darling
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