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	<title>Game Tycoon &#187; Marketing / PR</title>
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	<link>http://www.edery.org</link>
	<description>For those interested in the business of making good video games. Entrepreneurial spirit a must.</description>
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		<title>&#8220;Amazing Throwing&#8221;</title>
		<link>http://www.edery.org/2010/04/amazing-throwing/</link>
		<comments>http://www.edery.org/2010/04/amazing-throwing/#comments</comments>
		<pubDate>Fri, 30 Apr 2010 04:05:06 +0000</pubDate>
		<dc:creator>David J Edery</dc:creator>
				<category><![CDATA[Design / Production]]></category>
		<category><![CDATA[Marketing / PR]]></category>

		<guid isPermaLink="false">http://www.edery.org/?p=1555</guid>
		<description><![CDATA[For a trip down memory lane, check out this old TV commercial for Super Mario Bros 2: What I find interesting about this commercial (aside from the cheesiness) is how pure it is. Unlike its predecessor, Super Mario Bros 2 was a game about defeating your enemies by throwing stuff at them as opposed to [...]]]></description>
			<content:encoded><![CDATA[<p>For a trip down memory lane, check out this old TV commercial for <i>Super Mario Bros 2</i>:</p>
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<p>What I find interesting about this commercial (aside from the cheesiness) is how <i>pure</i> it is. Unlike its predecessor, <i>Super Mario Bros 2</i> was a game about defeating your enemies <a href="http://en.wikipedia.org/wiki/Super_Mario_Bros._2">by throwing stuff at them</a> as opposed to jumping on them. So Nintendo focused their commercial almost exclusively on that aspect of the game. </p>
<p>If the first Super Mario game was all about &#8220;amazing jumping&#8221; (as Miyamoto has supposedly said), then the sequel added and focused on &#8220;amazing throwing.&#8221; The developers got it. The marketers got it. And not surprisingly, the rest of us got it, too.</p>
<p>What&#8217;s the essence of your game? Can you say it in a few words? Can everyone else you&#8217;re working with say it in a few words? </p>
<p>If not, why not?</p>
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		<title>Almost Lucid</title>
		<link>http://www.edery.org/2009/10/almost-lucid/</link>
		<comments>http://www.edery.org/2009/10/almost-lucid/#comments</comments>
		<pubDate>Sat, 24 Oct 2009 21:34:57 +0000</pubDate>
		<dc:creator>David J Edery</dc:creator>
				<category><![CDATA[Design / Production]]></category>
		<category><![CDATA[Marketing / PR]]></category>

		<guid isPermaLink="false">http://www.edery.org/?p=1204</guid>
		<description><![CDATA[Anyone developing an original IP for XBLA, PSN or Wiiware should take note of LucasArts&#8217; Lucidity. Why should you take note? Because Lucidity is a truly delightful game that unfortunately showcases two of the most common &#8220;big mistakes&#8221; made by developers and publishers on XBLA. If the leaderboards are any indication, Lucidity&#8217;s sales are suffering [...]]]></description>
			<content:encoded><![CDATA[<p><img src="http://www.edery.org/uploaded_images/lucidity.jpg" style="float:right; margin:0 0 8px 14px; width: 240px;" border="0" /></p>
<p>Anyone developing an original IP for XBLA, PSN or Wiiware should take note of LucasArts&#8217; <i>Lucidity</i>. Why should you take note? Because <i>Lucidity</i> is a truly delightful game that unfortunately showcases two of the most common &#8220;big mistakes&#8221; made by developers and publishers on XBLA. If the leaderboards are any indication, <i>Lucidity&#8217;s</i> sales are suffering as a result.</p>
<p>First, it&#8217;s worth recognizing how many things <i>Lucidity</i> gets right. It is beautiful, distinctive, and offers an original gameplay mechanic that actually works. Many game developers will never manage to create something that meets all three of those criteria in their entire careers. And many developers, with such a game on their hands, might assume that their success is all but assured. </p>
<p>There&#8217;s just two problems. If you&#8217;ve been reading this blog for any significant period of time, you already know one of those problems: <a href="http://www.edery.org/2009/09/a-cautionary-tale/">insufficient</a> <a href="http://www.edery.org/2009/03/the-importance-of-long-lead-pr">marketing</a>. <i>Lucidity</i> was unveiled mere weeks before it was released. No time to build consumer awareness. No time to woo the press. Nothin&#8217;.</p>
<p>The other problem is the game&#8217;s unforgiving design. (I won&#8217;t say the game&#8217;s &#8220;difficulty&#8221;, as something can be difficult without being unforgiving.) <i>Lucidity</i> lacks a checkpoint system, and that combined with a few other design issues causes the game to quickly become a punishing experience. This is apparent to players even in the demo. </p>
<p>It&#8217;s no accident that most modern platformers are more forgiving than their ancestors. While many XBLA and PSN users enjoy a stiff challenge, their patience is ultimately limited. Don&#8217;t let the success of a few insanely challenging retro titles fool you &#8212; those games have generally succeeded because of nostalgia, not because today&#8217;s gamer longs for the relentless butt-whooping of old. </p>
<p>1) Come up with a meaningful value proposition for your game. 2) Craft a gameplay experience that emphasizes that value proposition and that accommodates as many players in your target demo as possible. The latter can almost always be accomplished without noticeably diluting the gameplay experience. 3) *Repeatedly* communicate the value proposition far in advance of your game&#8217;s launch. &#8211;> These are the fundamental tricks of our trade.</p>
<p>PS. A year ago I wrote an <a href="http://www.edery.org/2008/06/debating-difficulty/">article on game difficulty</a> that is relevant to this post. The comments on that post were solid, too.</p>
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		<title>A Cautionary Tale</title>
		<link>http://www.edery.org/2009/09/a-cautionary-tale/</link>
		<comments>http://www.edery.org/2009/09/a-cautionary-tale/#comments</comments>
		<pubDate>Wed, 09 Sep 2009 18:47:17 +0000</pubDate>
		<dc:creator>David J Edery</dc:creator>
				<category><![CDATA[Marketing / PR]]></category>
		<category><![CDATA[Platforms]]></category>

		<guid isPermaLink="false">http://www.edery.org/?p=1129</guid>
		<description><![CDATA[If you are developing an original IP for XBLA or PSN, or hope to develop one someday, this post is for you. Given the sales estimates being reported by Gamasutra (see these helpful examples), given what I&#8217;ve heard from individual developers as of late, and given the relative strength of established IP on the platform [...]]]></description>
			<content:encoded><![CDATA[<p><img style="float:right; margin:0 0 8px 14px; width: 240px;" border="0" src="http://www.edery.org/uploaded_images/behemoth_pax1.jpg"/></p>
<p>If you are developing an original IP for XBLA or PSN, or hope to develop one someday, this post is for you.</p>
<p>Given the sales estimates being reported by Gamasutra (see <a href="http://www.gamasutra.com/php-bin/news_index.php?story=23200">these</a> <a href="http://www.gamasutra.com/php-bin/news_index.php?story=24144">helpful</a> <a href="http://www.gamasutra.com/php-bin/news_index.php?story=24773">examples</a>), given what I&#8217;ve heard from individual developers as of late, and given the relative strength of established IP on the platform to date, I estimate that in general, no more than nine truly original IP-based games will succeed in any given year on XBLA. This is obviously a rough guesstimate at best; there is certainly the possibility that you will see more (or less) hit original-IP based titles in any given year. But even if I&#8217;m off by a few, you&#8217;ll see shortly that it doesn&#8217;t matter for the purposes of this post.</p>
<p>Now assume that approximately four (or more) of those original IPs will be successful partially because they are high quality, but partially because they are king-made by Microsoft. They might be included in the annual <a href="http://majornelson.com/archive/2009/07/09/2nd-annual-summer-of-arcade-kicks-off-july-22nd.aspx">Summer of Arcade promotion</a>. They might <a href="http://en.wikipedia.org/wiki/A_Kingdom_for_Keflings">support a new 360/LIVE platform feature</a> and be showered with tremendous dashboard and press exposure. They might be internally developed by Microsoft Game Studios. And the list goes on&#8230; (I would have included <a href="http://www.zimbio.com/XNA+Game+Studio/articles/10/Microsoft+announce+Dream+Build+Play+global">winning the Dream Build Play competition</a>, but it seems like Microsoft is now keeping the winners in the Indie Games Channel.)</p>
<p>Now assume your original IP is not king-made. Darn!</p>
<p>You&#8217;ve got approximately five chances left to turn a serious profit on your XBLA game. You&#8217;ve worked endless hours and paid yourself peanuts, all in the name of making a great game. You&#8217;ve taken the time to create a decent demo experience. Still, it feels like you&#8217;re forgetting something&#8230; but what could it be? Frustrated, you decide to take a night off and have some fun at PAX. But when you walk through the main entrance, it hits you:</p>
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<td><img border="0" src="http://www.edery.org/uploaded_images/tp_pax1.jpg"/></td>
<td><img border="0" src="http://www.edery.org/uploaded_images/slick_pax1.jpg"/></td>
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<tr>
<td valign='top'><i>Twisted Pixel, showing off The Maw, Splosion Man, and their upcoming title, Comic Jumper</i></td>
<td valign='top'><i>Slick Entertainment, showing off upcoming title, Scrap Metal</i></td>
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<td><img border="0" src="http://www.edery.org/uploaded_images/ankama_pax.jpg"/></td>
<td align='left' valign='top'><img border="0" src="http://www.edery.org/uploaded_images/klei_pax1.jpg"/></td>
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<td valign='top'><i>Ankama Games, giving private demos of upcoming title, Islands of Wakfu</i></td>
<td valign='top'><i>Klei, showing off the upcoming title, Shank</i></td>
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<p>You spent so much time <b>developing your baby</b> that you forgot to get out there and <b>talk about it</b>&#8230; but the competition didn&#8217;t! There were at least six different XBLA development shops parked right by the main entrance! Handing out toys. Showcasing their games. Kissing hands and shaking babies. (Or is it the reverse? You&#8217;re so distraught that you can&#8217;t remember!) And for many, this isn&#8217;t their first conference. The Behemoth&#8230; what conference do they <b>not</b> go to? And Twisted Pixel&#8230; those wacky guys never cease to charm the public with their adorable <a href="http://xblarcade.com/node/2245">Maw plushies</a>.</p>
<p>You play a few demos and grudgingly admit that these guys are making pretty decent games, too. A pit forms in your stomach as you realize that you might be screwed. But hey, that won&#8217;t happen. Marketing is bullshit, right? Quality always wins, Right?</p>
<p><a href="http://www.edery.org/2009/08/the-hits-get-bigger/">Right.</a></p>
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		<title>The Importance of Long-Lead PR</title>
		<link>http://www.edery.org/2009/03/the-importance-of-long-lead-pr/</link>
		<comments>http://www.edery.org/2009/03/the-importance-of-long-lead-pr/#comments</comments>
		<pubDate>Tue, 31 Mar 2009 03:37:45 +0000</pubDate>
		<dc:creator>David J Edery</dc:creator>
				<category><![CDATA[Marketing / PR]]></category>

		<guid isPermaLink="false">http://www.edery.org/?p=895</guid>
		<description><![CDATA[One argument I made during my lecture at GDC this year (video of a nearly identical lecture available here) was that downloadable game developers and publishers need to start putting much more energy into marketing and PR way earlier in the development cycle of their games. I was talking about XBLA, PSN and Wiiware, but [...]]]></description>
			<content:encoded><![CDATA[<p><img style="float:right; margin:0 0 8px 14px; width: 160px;" border="0" src="http://www.edery.org/uploaded_images/microphones.jpg"/></p>
<p>One argument I made during my lecture at GDC this year (video of a nearly identical lecture <a href="http://video.google.com/videoplay?docid=-1808460967614303055">available here</a>) was that downloadable game developers and publishers need to start putting much more energy into marketing and PR <i>way earlier</i> in the development cycle of their games. I was talking about XBLA, PSN and Wiiware, but you could apply this to any video game ecosystem, really. As I was catching up with developers and publishers over the course of last week, this issue came up over and over again (i.e. they were on the verge of launching a game that hadn&#8217;t been promoted in any significant way) so I thought it worth writing about.</p>
<p>I have no way to incontrovertibly prove that I&#8217;m right about the importance of long-lead PR, but I believe that plenty of public information is available to back up my assertion. For example, the large majority of really big, known hits on XBLA: <i>Braid</i>, <i>Castle Crashers</i>, <i>Worms</i>, both <i>Street Fighter</i> games, etc, are games that were revealed to the public well over a year before they were launched (well over two years, in the case of some games.) They were covered by the press and discussed on active consumer forums repeatedly before their release. Very few big hits were announced in just the few months (or worse yet, weeks) leading up to the game&#8217;s release, with a couple of notable exceptions that Microsoft put some big PR and marketing muscle behind and/or were released back in the &#8220;golden days&#8221; of XBLA (when <i>every</i> game was doing quite well.) More importantly, some very good XBLA games that received absolutely zero advance promotion have failed to meet their developers&#8217; expectations. </p>
<p>This isn&#8217;t really a surprise to anyone who understands the fundamentals of consumer psychology. There&#8217;s a whole boatload of research showing that we humans are more apt to like something that we&#8217;re familiar with than something that we have never (or have rarely) encountered before. The power of familiarity is so great that (for example,) exposure to a random drawing for <i>mere milliseconds</i> in a neutral or positive context will increase your appreciation of that drawing in subsequent viewings, relative to other random drawings that you&#8217;ve never seen before. And it&#8217;s certainly clear that long-lead PR hasn&#8217;t hurt mega retail games (like, for example, anything created by Blizzard.) So why is this misconception so prevalent? I think one reason is that everybody knows about certain games, primarily of the retail variety, that had a tremendous amount of long-lead hype and subsequently crashed and burned on launch, but I would contend that the majority of those games launched with serious flaws that led to a fatal mismatch between consumer expectations and reality. The answer? Definitely hype your game well in advance of its release, but be sure that you can meet the expectations that you&#8217;ve set when you do so. This isn&#8217;t rocket science. </p>
<p>Who are some of the developers and publishers who get this? The Behemoth and Capcom are great examples. When you&#8217;re trying to craft a marketing and PR strategy, look to them for examples of how to do things right. If you are not formulating a robust marketing and PR strategy from the <i>first day</i> you begin working on your game, <i>you are setting yourself up for failure.</i> Being a small company with no marketing budget is not an excuse, especially if you&#8217;re working on an original IP. In fact, it&#8217;s even more important for you to be thinking up low-cost things you can do to get consumers and the press excited about your game. </p>
<p>Can you create interesting or amusing videos related to your game that will get picked up by Kotaku or will spread virally? Can you send something surprising to IGN that will get them to write about your game in a positive way? Can you do something to get fans of a previous game to tell all their buddies about your next title? Is there a way to invite fans and potential fans into the development process, such that they become invested and become advocates? These questions are absolutely as important as &#8220;is the game fun?&#8221; and &#8220;can I get a publisher?&#8221; </p>
<p>Or you could go ahead and make a great game without regard for how many people have ever heard of it. Your ten future customers (including your mom) will thank you for it.</p>
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		<title>Console Game Prices</title>
		<link>http://www.edery.org/2009/02/console-game-prices/</link>
		<comments>http://www.edery.org/2009/02/console-game-prices/#comments</comments>
		<pubDate>Thu, 19 Feb 2009 21:49:52 +0000</pubDate>
		<dc:creator>David J Edery</dc:creator>
				<category><![CDATA[Business (in general)]]></category>
		<category><![CDATA[Marketing / PR]]></category>

		<guid isPermaLink="false">http://www.edery.org/?p=827</guid>
		<description><![CDATA[Lots of buzz today about Gabe Newell&#8217;s DICE Summit keynote. Gabe noted that price promotions on certain games on Steam have dramatically lifted sales. He emphasized that when Left 4 Dead was recently discounted by 50% (to $25), the discount increased sales by 3,000%. He added, &#8220;We sold more in revenue this last weekend than [...]]]></description>
			<content:encoded><![CDATA[<p><img style="float:right; margin:0 0 8px 14px; width: 160px;" border="0" src="http://www.edery.org/uploaded_images/pricecut21909.png"/></p>
<p>Lots of buzz today about <a href="http://www.edge-online.com/features/valve-are-games-too-expensive">Gabe Newell&#8217;s DICE Summit keynote</a>. Gabe noted that price promotions on certain games on Steam have dramatically lifted sales. He emphasized that when <i>Left 4 Dead</i> was recently discounted by 50% (to $25), the discount increased sales by 3,000%. He added, &#8220;We sold more in revenue this last weekend than we did when we launched the product&#8221; and claimed that brick-and-mortar sales were unaffected by the Steam promotion. Gabe concluded that video games are probably too expensive, in general. (There was more to the presentation, including some comments about the evils of DRM, but I&#8217;m more interested in focusing on the pricing stuff right now.)</p>
<p>A couple of caveats, before I write anything further. #1: Gabe is one of the smartest people in this industry, and he has much more experience than I do. I&#8217;m not questioning his intelligence or judgment in any way, but I&#8217;m also not foolish enough to believe that his keynote statements encompass the sum total of his thoughts on this matter. More importantly, I&#8217;m not foolish enough to believe that Gabe is without agenda. He clearly <i>wants</i> to sell games for a lower price (for one very obvious reason related to the retail ecosystem, in particular.) This keynote presentation was an opportunity for Gabe to advance his agenda, not to share the full scope of his thoughts on pricing strategy or on Valve&#8217;s unique position in the industry.</p>
<p>Caveat #2: In my gut, I&#8217;ve long suspected that many console video games may in fact be over-priced (at their launch and later on in the life-cycle.) But I don&#8217;t know for sure, partially because the data that is needed to prove this assertion simply <i>does not exist in sufficient quantity yet</i>, at least to my knowledge. More on that&#8230; now.</p>
<p><b>Price Promotions Increase Sales&#8230; Duh</b></p>
<p>So a major price discount resulted in a huge revenue spike for <i>Left 4 Dead</i>, long after it was initially launched. Awesome. This is <i>completely underwhelming</i> information, and Gabe certainly knows it. Video game publishers (and indeed, consumer product companies of all kinds) have been <a href="http://en.wikipedia.org/wiki/Price_skimming">price skimming</a> for a very, very long time. After an initial launch window, you sacrifice revenue per unit to increase demand and generate more revenue overall. In doing so, you take advantage of the fact that some consumers have a higher willingness to pay for your product than others do. Rather than give up the extra revenue from those first customers by starting right away with a low price, you instead drop your price in increments, over time.</p>
<p>When a product is discounted in this manner, you can only prove that it was &#8220;over-priced&#8221; at launch by proving that the launch price (and subsequent window of &#8220;premium pricing&#8221;) resulted in a <i>permanent</i> loss of customers who would have been willing to pay less, <i>and</i> that the (direct and indirect) profit generated by those lost customers would have exceeded the extra profit generated by customers at the higher price. In other words, the fact that <i>Left 4 Dead</i> generated a ton of revenue when it was discounted <i>may</i> be an indication that it was initially over-priced, or it <i>may</i> be a testament to the game&#8217;s quality and longevity (and an example of a well-executed price waterfall!)</p>
<p><b>Other Launch Price Considerations</b></p>
<p>There are plenty of other factors that might lead one to believe that a game should have a lower launch price. For example: a multiplayer-only game that will live or die by the online population it attracts might certainly be better off with a lower launch price, so that it&#8217;s more likely to reach critical mass. Another example: a publisher attempting to gain market share in a very competitive space might attempt to do so via aggressively pricing its products. Take Two <a href="http://www.cdn.thestreet.com/story/10183145/1/take-two-gains-ground-on-electronic-arts.html">famously tried this</a> against EA&#8217;s <i>Madden</i> and actually seemed to be making ground, before EA <a href="http://www.gamesindustry.biz/articles/ea-wipes-out-rival-nfl-titles-with-new-five-year-exclusive-deal">pulled the rug out from under Take Two</a> and put that experiment to a definitive end.</p>
<p>There are other good reasons you might launch a game with a lower price. Simply assuming that doing so will dramatically increase <i>lifetime revenues</i> for the game is probably not one of those good reasons. In fact, in a market with fairly standardized prices, launching with a lower-than-normal price might actually harm a game. It could theoretically send a <a href="http://ideas.repec.org/a/aea/aecrev/v81y1991i1p224-39.html#abstract">poor quality signal</a> to consumers, resulting in lower than expected sales. This is less of a problem when the vast majority of potential customers have a high degree of knowledge about a product, but given that a large percentage of video games are purchased as gifts by people who don&#8217;t necessarily read <a href="http://www.kotaku.com">Kotaku</a> or <a href="http://www.metacritic.com">Metacritic</a>, price/quality signaling is a valid concern for a publisher.</p>
<p><b>It&#8217;s Easy to Drop Price but Nearly Impossible to Raise It</b></p>
<p>Part of the challenge that video game publishers face is that dropping price is easy, but raising it is nearly impossible. Consumers are happy to purchase a game at a discount but rarely willing to pay more than the &#8220;fair&#8221; (aka launch) price of the game; <a href="http://latimesblogs.latimes.com/technology/2008/06/how-to-find-the.html">rare phenomenon</a> like <i>Wii Fit</i> being notable exceptions.</p>
<p>There&#8217;s certainly the risk that pricing too high in the beginning could cause a catastrophic loss of momentum for a game. But it&#8217;s generally hard to prove that this risk outweighs the risk of under-pricing. Furthermore, price cuts can quickly turn into a slippery slope. Once a significant number of titles are being launched at lower-than-currently-normal prices, it may become impossible for publishers to reverse course even in the event that dramatically greater lifetime revenues do <i>not</i> materialize. Consumer expectation levels will have been set. As such, many publishers are reluctant to let this particular rabbit out of the hat. Can you really blame them?</p>
<p><b>How Used Games Figure Into the Equation</b></p>
<p>Some might argue that lower prices would significantly reduce used game purchases and rentals, but it&#8217;s not immediately clear to me why that would be the case. If new games were generally selling for $40 instead of $60, who&#8217;s to say that used game prices wouldn&#8217;t simply drop as well? And if they drop, why should we believe that used game sales will diminish? Consumers who buy used games don&#8217;t think of them as &#8220;dirty&#8221; or &#8220;less worthwhile&#8221; products &#8212; they think of them as <i>great bargains</i> (which they are, since the vast majority of new games offer no benefit over their used counterparts.) And I&#8217;m afraid that most consumers won&#8217;t forgo a great bargain &#8212; at any margin &#8212; out of loyalty to publishers and developers <i>unless</i> they believe that the aforementioned bargains are driving publishers out of business. Current revenue shortfalls notwithstanding, just try to convince the average consumer that EA or Activision are at risk of going bankrupt!</p>
<p>Publishers who want to reduce used game sales in retail will do so via enhanced services and/or multiplayer offerings that make you want to hold onto the disc &#8212; not lower prices. Longer-term, the transition of more sales to digital marketplaces will be a factor to consider, but retail isn&#8217;t going away anytime soon, so let&#8217;s talk about what matters <i>now</i>, shall we?</p>
<p><b>Bottom Line</b></p>
<p>I need to emphasize again that I&#8217;m <i>absolutely</i> willing to believe that video game prices may be too high. I simply reject the flawed assertion that a big bump in revenues from a long-delayed price cut equals &#8220;proof&#8221; that launch prices are too high. It isn&#8217;t proof. It may be the <i>opposite</i> of proof. (See my earlier comments on price skimming.)</p>
<p>I&#8217;m personally more interested in the ways that publishers can use advertising-supported games, virtual item-based games and/or subscription-based games to pursue price-sensitive consumers. All of these are exciting (and rapidly growing) areas that give us new ways to think about entertainment and value. I think that the (medium-term) future of the video game industry looks like a solid combination of those things, plus traditional console game sales at prices near today&#8217;s prices, plus cheaper (but smaller-scoped) games like those found on XBLA. There&#8217;s enough wiggle room in there for publishers to experiment; they don&#8217;t need to experiment by launching AAA games at $25 (which, as Gabe knows, isn&#8217;t really possible anyway given the current economics of the retail ecosystem.)</p>
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		<title>The Price of a Norwegian Sweater</title>
		<link>http://www.edery.org/2009/01/the-price-of-a-norwegian-sweater/</link>
		<comments>http://www.edery.org/2009/01/the-price-of-a-norwegian-sweater/#comments</comments>
		<pubDate>Thu, 15 Jan 2009 05:25:42 +0000</pubDate>
		<dc:creator>David J Edery</dc:creator>
				<category><![CDATA[Marketing / PR]]></category>

		<guid isPermaLink="false">http://www.edery.org/?p=804</guid>
		<description><![CDATA[Yesterday, my family and I visited Epcot at Disney World. It was Eve&#8217;s first time there, whereas I&#8217;ve been to Disney World many times as a child, so I was looking forward to showing her around! Of course, I&#8217;m incapable of seeing Disney World in the innocent way that I used to &#8212; not just [...]]]></description>
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<p>Yesterday, my family and I visited Epcot at Disney World. It was Eve&#8217;s first time there, whereas I&#8217;ve been to Disney World many times as a child, so I was looking forward to showing her around! Of course, I&#8217;m incapable of seeing Disney World in the innocent way that I used to &#8212; not just because I&#8217;m older, but because now I can&#8217;t help but look for elements of game design and marketing theory in every element of the park. As far as game design is concerned, I was disappointed. Where was the playable Epcot metagame? And why were so few of the rides really interactive? But on the marketing front, I certainly can&#8217;t complain. Nobody knows how to market quite like Disney.</p>
<p>One example: I was exploring the Norway exhibit in the Epcot world village, and popped into the exhibit&#8217;s clothing store. The first sweater that caught my eye, displayed prominently along the wall, cost $540. I played &#8220;guess the price&#8221; with Eve, who made seven guesses before stopping at $450 and insisting that I must be pulling her leg. Nearby the sweater but farther down the way was a rack of toddler&#8217;s clothing. There was a cute winter jacket on display which I was guessing would cost about $200, but in fact, was tagged at $40. The first words out of my mouth were, &#8220;hey Eve, here&#8217;s a bargain!&#8221; And then I bit my tongue. They almost got me.</p>
<p>When it comes to human perception, everything is relative. Price is not something we judge in a vacuum, but in comparison to the best known relevant data. Of course, Disney understands that most visitors will have no idea what clothing from Norway (with an exotic-sounding brand name) should cost. So it sells the sweater for $540, knowing that the average person will assume some price inflation, but <b>also</b> assume that the correct price lies somewhere between, say, $300 and $500. This becomes the anchor value against which the toddler&#8217;s jacket&#8217;s price is compared. And woah&#8230; $40 sure looks good by comparison! Never mind that the true value of that $540 sweater may have been $100 or less, for all I know. Or maybe the true value really <b>was</b> that high &#8212; it still shouldn&#8217;t have any bearing on the value of the jacket to me. But for many shoppers, it does.</p>
<p>Many high-end restaurants do something similar to their customers. They put Beluga caviar or a fancy bottle of wine on the menu for hundreds (or thousands) of dollars, not just because they make a big profit when they sell those goods, but because the mere presence of those goods on the menu at those prices makes everything else seem cheaper by comparison.</p>
<p>So what does this have to do with video games? A few things. The most obvious lesson, to me, can be learned by operators of F2P games that sell virtual items. Like the average shopper in the clothing store at Epcot Norway, the average player of an F2P game has nothing to compare in-game item prices with (except, of course, other in-game items.) How does she know what a &#8220;Mithril Sword of Ultimate Luck&#8221; is worth, except through the prices the game operator specifies? This isn&#8217;t the kind of thing you can compare across games. That&#8217;s why smart F2P game developers will sell a small number of virtual items for tens or even hundreds of dollars &#8212; not because they hope to sell many, although that would be nice! No, you want a few such items in your virtual marketplace because they make spending a buck on other items seem so much more reasonable.</p>
<p>Everything is relative.</p>
<p><b>PS.</b>&nbsp; I referenced this in an AoI post a long time ago, but for those of you who missed it, a nice <a href="http://sloanreview.mit.edu/business-insight/articles/2008/4/5049/the-irrationalities-of-product-pricing/">related article</a> on pricing featuring Dan Ariely.</p>
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		<title>Two-Part Tariff, meet MMOGs</title>
		<link>http://www.edery.org/2008/10/two-part-tariff-meet-mmogs/</link>
		<comments>http://www.edery.org/2008/10/two-part-tariff-meet-mmogs/#comments</comments>
		<pubDate>Thu, 30 Oct 2008 14:29:20 +0000</pubDate>
		<dc:creator>David J Edery</dc:creator>
				<category><![CDATA[Ads-in-Games]]></category>
		<category><![CDATA[MMOG]]></category>
		<category><![CDATA[Marketing / PR]]></category>

		<guid isPermaLink="false">http://www.edery.org/?p=709</guid>
		<description><![CDATA[While at the GameOn Finance event in Toronto, I found myself in an interesting conversation about ways to maximize the revenue generated by MMOGs. I found it difficult to fully express my thinking on the matter at the time, so during my flight home I wrote this post. Consider it a sneak previous into my [...]]]></description>
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<p>While at the GameOn Finance event in Toronto, I found myself in an interesting conversation about ways to maximize the revenue generated by MMOGs. I found it difficult to fully express my thinking on the matter at the time, so during my flight home I wrote this post. Consider it a sneak previous into my upcoming IGDA Leadership Forum lecture on MBA Lessons applied to the game industry. :-)</p>
<p>One of the concepts I learned in business school was the &#8220;two-part tariff,&#8221; which is best explained through a simple example that we&#8217;re all familiar with: a nightclub. Most nightclubs generate the majority of their revenue from the sale of liquor. Why then do some of them also choose to charge a cover fee? Doesn&#8217;t that turn away potential customers? Well, part of the reason is simply to &#8220;keep out the riffraff,&#8221; but bouncers at the door can (and generally do) already reject anyone who looks like they won&#8217;t be a valued customer. Part of the reason is to project an aura of quality and/or exclusivity, but again, a velvet rope and an obstinate bouncer can already accomplish that as well. </p>
<p><b>Two kinds of customers</b></p>
<p>The third major reason for a cover charge at a nightclub is revenue maximization, pure and simple. Here&#8217;s the underlying rationale: nightclubs basically have two kinds of customers. One kind buys a lot of drinks (the especially valued customer buy a lot of the most expensive drinks.) The other kind buys one drink and nurses it all night, or even &#8212; heaven forbid &#8212; just a glass of water. Both kinds of customers are attracted to the nightclub because it offers music, attractive people to dance with, etc. Both kinds of customers clearly value the experience. But only one kind of customer will be profitable for the nightclub. Sound familiar?</p>
<p>So the nightclub does a very simple calculation. It asks, &#8220;what is the experience of being here worth to most people &#8212; or more accurately, just enough people that I can easily fill the place each night.&#8221; That estimate of worth becomes the cover charge. It extracts at least <u>some</u> revenue from the people who want to enjoy the nightclub but have no intention of paying if they don&#8217;t have to. The other customers &#8212; the ones who are likely to buy a ton of drinks &#8212; are not dissuaded by the cover charge because they already know going in that this is going to be an expensive experience for them. What&#8217;s five or ten more bucks at the gate?</p>
<p><b>Entry/Subscription fees and microtransactions are not mutually exclusive</b></p>
<p>It seems unfortunate to me that despite the existence of this very classic pricing example, many game developers seem to think that microtransactions and entry/subscription fees are mutually exclusive. But I&#8217;d argue that our industry&#8217;s equivalent of the &#8220;popular nightclub&#8221; &#8212; aka an MMOG with high production values and either A) strong IP and/or B) tremendous buzz &#8212; can take advantage of both. The thought process is the same for nightclubs and MMOGs: &#8220;how many people do I need to attract to make this an exciting environment for everyone to be in, and how much can I get away with charging as entry/subscription fee while still reaching that number?&#8221; Of course, that doesn&#8217;t mean you need to charge right from the get-go; there&#8217;s always the possibility of a free month&#8217;s trial (or something like that) to help build critical mass.</p>
<p>Maybe the subscription fee is $9.99 a month. Maybe it&#8217;s just $1.99 a month. The amount depends on the MMOG. And for many MMOGs, it&#8217;s clear that the amount is &#8220;zero.&#8221; There&#8217;s simply too much competition for customers in this space, and the competition is only going to get hotter over time. But for those MMOGs that can potentially justify a non-zero tariff, the truly important thing to remember is this: you can always drop price. Raising it is MUCH harder. If your experiment with a two-part tariff fails, eliminate the tariff. You might have lost a little momentum building towards critical mass, but odds are the delay won&#8217;t prove to be a critical error as long as the tariff itself wasn&#8217;t insultingly high to begin with.</p>
<p><b>Will it offend players? Not if handled correctly</b></p>
<p>The major objection to my argument seems to be that &#8220;people who pay a subscription fee will be offended if some players can pay to get an advantage.&#8221; It&#8217;s not clear to me that this is true, but let&#8217;s take for granted that it is. There is still a whole host of things you can sell that do not convey any sort of strategic benefit in game. Call them &#8220;status items&#8221; and &#8220;gifts.&#8221; A really cool-looking outfit, or virtual flowers. Or perhaps even an in-world home. </p>
<p>Now, it may be that an existing MMOG (like <i>World of Warcraft</i>) may not be able to institute microtransactions after the fact, because it has been around long enough that players have developed an expectation for &#8220;how the world works.&#8221; But a new MMOG faces no such preconceived notions. And if said &#8220;new MMOG&#8221; happens to be, as I mentioned, a likely equivalent of the &#8220;popular new nightclub in town,&#8221; the developers of that MMOG absolutely should consider a two-part tarriff revenue model.</p>
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		<title>Back-Linking and Dormant Content</title>
		<link>http://www.edery.org/2008/07/back-linking-and-dormant-content/</link>
		<comments>http://www.edery.org/2008/07/back-linking-and-dormant-content/#comments</comments>
		<pubDate>Mon, 28 Jul 2008 04:44:17 +0000</pubDate>
		<dc:creator>David J Edery</dc:creator>
				<category><![CDATA[Design / Production]]></category>
		<category><![CDATA[Marketing / PR]]></category>

		<guid isPermaLink="false">http://www.edery.org/2008/07/back-linking-and-dormant-content/</guid>
		<description><![CDATA[At Comic-Con, Cliff Bleszinski revealed that Gears of War 2 would feature linked Achievements, or special content that is unlocked only if you&#8217;ve earned a specific achievement in the original Gears of War. For example, if you&#8217;ve completed Act One in Gears Of War, you will unlock a playable Anthony Carmine in Gears of War [...]]]></description>
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<p>At Comic-Con, Cliff Bleszinski revealed that <i>Gears of War 2</i> would feature <a href="http://kotaku.com/5029602/gears-of-war-2-features-backwards-compatible-linked-achievements">linked Achievements</a>, or special content that is unlocked only if you&#8217;ve earned a specific achievement in the original <i>Gears of War</i>. For example, if you&#8217;ve completed Act One in <i>Gears Of War</i>, you will unlock a playable Anthony Carmine in <i>Gears of War 2</i>. This is similar to what Peter Molyneux is doing with <i>Fable</i> on XBLA, i.e. enabling you to win currency that can then be spent within the world of <i>Fable 2</i>.</p>
<p>I suspect that this sort of thing will become increasingly popular with developers, some of whom will do it simply because it&#8217;s cool, and some of whom will do it because it can be useful for promotional purposes. (Use the earlier release of &#8220;Game A&#8221; to help drive interest in &#8220;Game B.&#8221; Or alternatively, take &#8220;Game A,&#8221; which isn&#8217;t expected to be a huge hit, and link it to &#8220;Game B,&#8221; which <u>is</u> expected to be a huge hit, in hopes that &#8220;Game A&#8221; benefits &#8212; a potentially more subtle or interesting version of the &#8220;bundle Game A with a demo or beta of Game B&#8221; strategy.)</p>
<p><b>Back-Linking New Games to Older Games in a Franchise</b></p>
<p>There are probably a thousand interesting ways to link games, in general, but the <i>Gears</i> announcement got me thinking: what other ways might an old game be linked to a new game released several years afterwards? Is there a way to link back, as opposed to link forward? The idea that jumped to mind was something I&#8217;ll call &#8220;dormant content.&#8221; Basically, when developing a game that is likely to have a sequel, developers could create a small amount of content that is not exposed until a trigger event occurs in a future game. (Some games already do this on a much simpler level, hiding content until a time noted by the system clock. &#8220;Be here at noon three days from now to find the hidden treasure&#8230;&#8221;) </p>
<p>So for example, imagine playing a game and encountering a flashback scene. The flashback might begin with recognizable footage from the previous game, but then transition to something that the player never actually experienced. An achievement might then be awarded, containing an unusual message instructing the player to load Game A. So you load &#8220;Game A&#8221;, and lo and behold, the hidden content has been unveiled. Perhaps the content is an area behind a mysterious door that had previously been locked, and is now finally unlocked. (You always wondered what was behind that door!)</p>
<p>And to complete the loop, the player&#8217;s actions within the dormant content of &#8220;Game A&#8221; might result in the awarding of an achievement that affects the outcome of &#8220;Game B.&#8221; (Failure to complete the hidden content in Game A should not result in penalty, as the player may no longer possess Game A, but perhaps they&#8217;d miss out on a cool reward or cut scene in Game B.)</p>
<p><b>Back-Linking with Dormant Content or PDLC?</b></p>
<p>Developers that are interested in this idea, but are unwilling or unable to create content that will remain hidden for so long, might accomplish the same thing with downloadable content for Game A, created shortly before it is exposed, instead of years before. That certainly reduces the risk of wasted effort, in the event that Game B is never made (or proves to be a commercial failure.) But discovering long-hidden Easter eggs might be really fun&#8230; people get a kick out of time capsules, after all. (Can you imagine how the legions of <i>Final Fantasy 7</i> fans might react if they learned that, all this time, there was a little more <u>original</u> FF7 content waiting for them? That might be reaching a bit too far back, but you get the idea.)</p>
<p>I certainly wouldn&#8217;t call this a revolutionary idea &#8212; it&#8217;s basically a gimmick &#8212; but it seems to potentially be exciting for players. And, as more developers are turning their eye towards episodic content, this might be another way to increase motivation for late adopters to go back and try earlier episodes in the series. </p>
<p>PS. The photo is of a dormant volcano erupting. Metaphor meets pointless eye candy.  :-)</p>
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		<title>Predictably Irrational</title>
		<link>http://www.edery.org/2008/05/predictably-irrational/</link>
		<comments>http://www.edery.org/2008/05/predictably-irrational/#comments</comments>
		<pubDate>Tue, 13 May 2008 16:24:00 +0000</pubDate>
		<dc:creator>David J Edery</dc:creator>
				<category><![CDATA[Marketing / PR]]></category>
		<category><![CDATA[Social / Cultural]]></category>

		<guid isPermaLink="false">http://www.edery.org/2008/05/predictably-irrational/</guid>
		<description><![CDATA[I just landed in Sweden for the Nordic Game Conference and I&#8217;m trying to stay awake for several more hours in order to get my body accustomed to the time difference. So I apologize if this reads incoherently; I&#8217;m truly half-asleep right now&#8230; While on the plane here, I finally finished reading Dan Ariely&#8217;s new [...]]]></description>
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<p>I just landed in Sweden for the Nordic Game Conference and I&#8217;m trying to stay awake for several more hours in order to get my body accustomed to the time difference. So I apologize if this reads incoherently; I&#8217;m truly half-asleep right now&#8230;</p>
<p>While on the plane here, I finally finished reading Dan Ariely&#8217;s new book, <a href="http://www.predictablyirrational.com/">Predictably Irrational</a>. Dan was one of my professors at MIT and is an all-around great guy. His book does a wonderful job of explaining how human beings are consistently irrational in many situations (such as when we make  purchase decisions), and more importantly, it explores the implications of this irrationality for individuals, businesses, governments, and society at large. I don&#8217;t recommend books very often, but this is one that everybody should read. It is business book, self-help guide, and profound social commentary all in one tidy package.</p>
<p>Of course, while I was reading the book, I couldn&#8217;t help but tie back some of its lessons to video games. For example:</p>
<p>Dan writes quite a bit about pricing strategies, and how they can be used to take advantage of our predictable irrationality. One section in particular on the power of &#8220;free!&#8221; was obviously quite relevant to our industry given the rise of F2P games. Through multiple studies, Dan has found that the allure of free will not only cause people to consume things they otherwise would not have consumed (obvious), but will also cause them to forgo real bargains on products they prefer and could easily have afforded. This raises big questions for developers who plan to compete against F2P games on the PC primarily on the basis of quality&#8230;</p>
<p>Predictably Irrational also makes some interesting points about how everything is relative to human beings, including price. For example, restaurants can cause you to spend more simply by putting a very high-priced item on the menu. You probably won&#8217;t buy that item, but seeing it makes you more likely to buy the second or third most expensive item on the menu. Interesting examples like this made me wonder: how many F2P games have outrageously expensive virtual items for the sole purpose of driving up consumption of less expensive items &#8220;on the menu?&#8221;</p>
<p>One fascinating section on ethics and honesty noted that you could dramatically cut down on cheating in exams if you simply asked students to recall the Ten Commandments before they took a test, or (more pointedly) by reminding them of a school honor code. But you had to do this right before the test &#8212; it couldn&#8217;t happen weeks before and retain the effect. This made me wonder if online games, many of which have serious problems with griefers and other anti-social types, might benefit greatly by simply requiring users to read a one-sentence statement on positive social behavior each time they log in. </p>
<p>Anyway, there was so much more to the book than this. You really should check it out.</p>
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		<title>The Publishing Game</title>
		<link>http://www.edery.org/2008/05/the-publishing-game/</link>
		<comments>http://www.edery.org/2008/05/the-publishing-game/#comments</comments>
		<pubDate>Sun, 04 May 2008 01:08:10 +0000</pubDate>
		<dc:creator>David J Edery</dc:creator>
				<category><![CDATA[Marketing / PR]]></category>
		<category><![CDATA[Personal Stuff]]></category>
		<category><![CDATA[independent developers]]></category>
		<category><![CDATA[publishers]]></category>

		<guid isPermaLink="false">http://www.edery.org/2008/05/the-publishing-game/</guid>
		<description><![CDATA[Ten months and countless hours later, I&#8217;ve finished my book. There are still a round (or two?) of edits to be made, but the bulk of the writing is finished. It&#8217;ll be in stores in October. I&#8217;m looking forward to when I&#8217;ll be able to post an Amazon URL here. :-) Perhaps unsurprisingly, I still [...]]]></description>
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<p>Ten months and countless hours later, I&#8217;ve finished my book. There are still a round (or two?) of edits to be made, but the bulk of the writing is finished. It&#8217;ll be in stores in October. I&#8217;m looking forward to when I&#8217;ll be able to post an Amazon URL here. :-)</p>
<p>Perhaps unsurprisingly, I still can&#8217;t seem to summon the energy to write a long and thoughtful blog post about, well, anything right now. All I really want to do is work in my garden and hang out with long-neglected friends and family. However, this experience has taught me a few things which I think are relevant to Arcade games (not just books) and which I&#8217;d like to share while the memories are still fresh:</p>
<p>From what I&#8217;ve gathered, less than 1% of published books turn out to be hits. The odds for a first-time author (who isn&#8217;t a big name, like Bill Clinton or Alan Greenspan) are so incredibly low that even if your publisher loves your book, your marketing/sales forecast is unlikely to exceed 20k copies at best. At that level, it simply doesn&#8217;t make sense for the publisher to do much in the way of marketing until the book has already proven itself. Even though the Arcade console game space isn&#8217;t nearly that tough, there are parallels. After all, because of the economics of the Arcade space today, most publishers aren&#8217;t willing to spend more than $100k on marketing their games (and usually far less than that.)</p>
<p><b>The marketing questionnaire</b></p>
<p>So book publishers (or at least, ours) have adapted to their harsh reality, and have forced authors to be more self-reliant. We received a huge &#8220;marketing questionnaire,&#8221; with questions like &#8220;What is the big idea of the book,&#8221; &#8220;Why now is a good time to publish it,&#8221; &#8220;Why will people want to read it,&#8221; and &#8220;Who will buy it and why? Be realistic!&#8221; The questionnaire forced us to think about competing books and explain our points of differentiation. It forced us to think through every possible personal contact who could help promote the book, directly or indirectly, through coverage or endorsements, etc. We had to list every website, magazine, and journal that might be interested in the book. We had to answer a list of theoretical questions from journalists. We had to create sound bites. We were asked if we&#8217;d be willing to maintain a blog or podcast, and were offered help setting those up. And more.</p>
<p>Every publisher of an indie-developed Arcade title should require their developers to fill out a similar questionnaire. In fact, I wish we&#8217;d been asked to do so earlier in the life of our project; it might have caused me to change a few things about the book itself. For example, while we knew our target audience going in, we occasionally wrote things that pulled the book away from that audience. This was perhaps an unavoidable consequence of our personal enthusiasm for certain topics, but I think that if I had filled out the questionnaire earlier, and that if my publisher had sent me sample texts that were proven winners with my target audience, I might have learned something and wasted less time writing material that would ultimately be cut. And if an independent developer&#8217;s responses to the questionnaire seems weak or irrational (fortunately, ours were not deemed so), that&#8217;s a very useful warning flag for publishers.</p>
<p><b>Test sales</b></p>
<p>Our publisher also does things to test whether books will be a success before their mainstream launch. They sell a portion (or all) of an early draft in a small test market (i.e., an online e-book seller) to get early consumer feedback. Not a beta, and not a focus group &#8212; they actually sell something, because nothing&#8217;s a more accurate measure of potential sales than, well, sales. These measure are ultimately not perfect (or even close) since a single, highly positive review in a publication like the <i>New Yorker</i> can change the fortunes of a book. But at least it&#8217;s something, and in my opinion, this kind of pre-launch information would be even more useful in the Arcade space, where game sales are more dependent on the trial experience than on review scores.</p>
<p><b>My wish list</b></p>
<p>Some things I wish my publisher had done when I first signed my publishing contract (which I think would help for indie game developers as well):</p>
<ul>
<li>Provide a list of the top ten mistakes new authors make.</li>
<li>Provide a list of the top five ways to increase the likelihood that when someone casually picks up your book, they like what they see. (Game equivalent &#8212; trial tips.)</li>
<li>Schedule a mere one-hour conference call with the marketing team, so I could get their advice, establish relationships, and gauge their initial reactions to my writing plan.</li>
<li>Begin working with me on the name of the book immediately. A clever title (i.e., &#8220;Purple Cow&#8221;) can require a very specific writing plan. A less adventurous title can still theoretically be improved through a cheap but effective survey of potential readers &#8212; toss out ten potential titles, along with a brief description of the book, and see which one most grabs people&#8217;s attention.</li>
</ul>
<p>Fortunately, I&#8217;ve had a very supportive editor (thanks, Martha!!) so my list of complaints and suggestions is relatively small. Still, something to think about &#8212; for authors and game developers.</p>
<p>Wow, that was longer than I intended. Maybe I&#8217;m not as burned out on writing as I thought.  ;-)</p>
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