Daily Archives: March 9, 2006

GMC Session: How (Not) To Market Video Games In A Hostile Environment

Presentation by John Geoghegan, Executive Director, The SILOE Research Institute (Former VP, Global Sales & Marketing, LucasArts)

It’s a very hostile environment out there. The Utah state legislature recently passed a bill by a landslide vote lumping violent games with pornography. Do you feel like a porn merchant? I don’t.

California, Michigan, Wisconsin, DC, Iowa, and Kansas have all passed or are considering laws like the one in Utah. These laws are unconstitutional, but that’s a technicality, people. We’re not making friends. I haven’t seen this much animosity since big tobacco told congress that cigarettes are not addictive.

It’s time for us to wake up people. We are in deep doo-doo. At the state and federal level, we’re in trouble. Hillary Clinton’s pushing her Family Entertainment Protection Act. Everyone knows hillary is a liberal, but conservatives can’t stand her, so she’s appealing to centrists with the family values issue. Republican moderates and soccer moms can relate to the violent games issue. It’s a safe and smart bet for her as a politician. It worked for tipper gore with the whole rap lyrics controversy.

We’re marketing games to a hostile environment. We have a bad reputation. We’re getting banned, fined, and pulled off the shelves. They’re crushing our product. Some of you think I’m exaggerating. I’m not. This is the perfect storm of circumstances, and we’re sailing right into it.

How not to market in a hostile environment? Basically, don’t do everything we’re doing right now. To be clear, I’m not complaining about the ESA. They’re probably still mad at me about the whole booth babe thing. For the record, I think the ESA is part of the solution, not part of the problem. But it can’t stop with the ESA.

We love video games, right? So why shouldn’t everybody else? Right now, we’re in a defensive crouch, and our critics are playing rope-a-dope with us. The best defense is a strong offense. I propose a 12-step self-esteem recovery program for the video game industry. It’s time we held our heads up high, brothers and sisters. We have nothing to be ashamed of. Games are incredibly fun, creative, and artistic. We should be evangelizing!

  1. We need to promote our perfectly good rating system, put in place by the ESRB. Let’s promote the hell out of it and make sure everyone knows about it. It worked for movies and TV, it can work for us!
  2. Evangelize the benefits of video games. Read Everything Bad is Good for You by Steven Johnson. Johnson says games help kids compete more effectively, and makes them more intelligent. Games require many hours of sustained concentration and problem solving. In a world where more and more kids are on ritalin and can’t concentrate, this is a major accomplishment!
  3. We need to do more quantitative research with leading universities to prove the positive impact of video games, and to quantify the negatives. We need to do research with the Harvards and MITs and the UCLAs or whatever, and we need to share the good and bad news. When we quantify the negatives, it will help us dispense with most of the negative mythologies out there.
  4. We need to make it clear that new media is NEVER embraced at the start. It was true for movies, radio, pulp magazines, comics; for every new music wave, INCLUDING Mozart, there was controversy.
  5. We need to preach moderation and promote good parenting. Parents should be moderating their kids interaction with ALL forms of media — text messenging, internet, movies, etc. We need to get parents off our backs and onto their kids backs.
  6. We need to benchmark against sex and violence in prime network TV and movies. The corpses, blood, sex, and nudity in popular media totally outshadow what you find in games! We’re not as far on the cutting edge as many people like to say.
  7. Embrace the constitution. We have a right to make and market our product in an unregulated manner — or at least, not the manner some states are suggesting.
  8. We need to lobby. Let’s make political donations, and play the game that everyone else plays. We’re either not paying enough or we’re not getting the results we deserve, because i’m not seeing it.
  9. We need to harness our best spokespeople. People like and trust celebrities like Spielberg — let’s get people like him saying why they like and want to work on video games.
  10. We need to demonstrate our most creative games. We’re more than just GTA. We need to show people that it’s not all about guns and boobs. Games like Katamari, DDR, Guitar Hero, etc. Not a gun or a boob in sight in Guitar Hero!
  11. Put the problem in statistical perspective. “M” rated games are a minority of our product.
  12. Be proud! You’re marketing people — so show more pride. Don’t be ashamed to say you like video games; just say WHY you like video games. The depth of talent and degree of committment and the hard work going into games is incredible. You have every right to be proud, so BE proud!

GMC Session: How to Ride Out 2006

Comments by Michael Pachter, Managing Director, Wedbush Morgan Securities

My view of 2006 is, it’s a mess. Most of the constituents in the video game business didn’t plan out ’06 very well. Everybody is quick to blame Microsoft for the console shortage, but publishers are responsible for declining sales last year. Publishers saw the rising development costs for next-gen games and thought “we’re going to take less risk and stick with proven concepts” in both next-gen and current-gen. Look at the movie business. Crap. Sequels and more sequels. Who thought Dukes of Hazzard would be a good idea?

All we got from the publishers last year were sequels and movie titles. Who would think King Kong would make a good video game? I’m shocked that people think that’s the kind of game consumers want. Consumers are saying: “Microsoft is telling me I must have this box. But all I can buy are a bunch of sequels. I’ve already got those games.” It’s easy not to make a purchase.

EA’s coming out with The Godfather. That’s Dukes of Hazzard with Marlon Brando. That movie is old! How are you going to make Godfather resonate with today’s game consumer?

I think this year’s a mess. Microsoft did a brilliant marketing job. They’re going to catch up on supply. But no one’s buying Madden ’06 when Madden ’07 is just about to be released. Very few games are coming out this summer. We don’t know when the PS3 is launching. You guys are all going to lose your jobs because your boss is going to say “why can’t you sell games to these people? You suck.”

Assuming Sony gets the PS3 out, ’07 is going to be big no matter what. The publishers all talk about how the PS3 is additive, but it isn’t. It is going to cannibalize sales of games on old consoles (again, nobody buys Madden ’06 if they can get ’07 for their new console).

I think Nintendo will be incredibly successful. Many people don’t realize it, but Nintendo defines hardcore. Grand Theft Auto isn’t hardcore — Mario and Zelda are. The people who love that stuff, love that stuff. Last cycle, Sony and Microsoft had lots of exclusive titles. This cycle, it isn’t the same. Hardcore gamers aren’t going to buy a PS3 and an Xbox 360. Of the [predicted] 40M Xbox 360 buyers, 10M will buy a Revolution, and 20M PS3 owners will buy a Revolution. The innovative gameplay will hook hardcore gamers. The low price will hook other gamers. Nintendo is going to do great. If they can get more developers to make games for the Revolution, great. If not, thats the developers’ loss.

Comments by Jon Goldman, CEO, Foundation 9 Entertainment

2006 is going to be a rough year, but ironically, for independent developers like us, rough years are good years because publishers are cutting internal costs and turning to outside studios for help.

I think there are a lot of good market trends; you just need to find your way through this year. More people are playing games. Not just hardcore gamers — there are returning gamers, new crops of kids getting into games, new platforms, and technology is making better quality cheaper (for example, better cheaper LCD screens).

So from my standpoint, the principle challenges are structural. Innovation is a giant challenge for the industry, and that’s structural in many ways. It’s very difficult to take risky bets when you’re shouldering the entire burden of a game’s development and distribution.

Foundation 9 is a consolidation of several experienced developers. With size and scale, you can pool human and financial resources to handle the investment necessary to deal with this next generation of game development. Right now, you need to be doing R&D at the same time that you’re developing games and meeting commercial deadlines. That’s really hard. Unless you can invest ahead of the curve — as a large publisher, console manufacturer, etc, you’re going to be behind the curve, and that’s going to hurt innovation.

In my opinion, a lot of the most interesting games are non-traditional games. I’ve got a couple of girls, and we play DDR and Karaoke Revolution. Katamari has been a huge hit in my household. There’s a whole wealth of gaming out there, where what’s fun matters more than high definition graphics. The only way to regain focus on innovation and fun gameplay is for people like us to invest in the equivalent of basic R&D to get games right, meet market windows, etc.

We’re seeing a lot of interest in the DS right now. Compare development costs for new consoles to costs for the DS and you can’t help but be interested in that platform. You can’t build a lineup of games exclusively for next-gen, not with $15M development costs.

Game Marketing Conference (GMC) — Halfway Through

Today was the first day of the Game Marketing Conference. I spoke on a panel entitled “Opening Up the Shop: Blogs, Forums and Developers”. It ended up being a lot of fun! Great questions from the audience, in general. Unfortunately, since I was actually on the panel, I didn’t record anything. Hopefully someone else blogged it!

Suffice to say, I argued vociferously for game developers and marketers to develop an open, honest relationship with the blogging community, and to support blogging within their own companies (as long as they make corporate policies clear to all employees, first.) There wasn’t much dispute with my fellow panelists, but a couple of audience members expressed concern about the dangers of engaging the “vocal minority” that so often makes itself heard in blogs and forums. IMO: you need to grow a thick skin, deal with those guys as graciously as you can, and keep communicating. Companies that abdicate online communities are giving a sustainable advantage to their competitors (who don’t).

Over the next couple of days, I’m going to post snippets of interest from conference sessions that I attended. That seems more useful (and fun) than simply posting entire transcripts like I normally do. Oh, and less likely to result in carpal tunnel. 😉