Thursday, April 9, 2009

Why game devs should rethink marketing: The need for B2C branding within B2B

Now that it has been a while since my last branding related post, it is about time to put it all into perspective and think about what this means for a developer. To do that, I ask the question:

Is it possible that developers have been delegating/neglecting their marketing function a bit too much and unnecessarily, to the point of losing control over the value generated?

A while ago I had the chance to listen to an interesting presentation given by Greg Speakman, the VP Marketing of Sierra Wireless. Part of the presentation was about the difficulties of marketing something that is essentially a consumer electronic product through a B2B channel. Since they did not have the marketing budget to reach the consumer, their lifeline was their business partners like AT&T, who included Sierra Wireless products in heir own offerings. Thus, they were focused on marketing to such partners. I remember him saying how he wished they could make the consumer demand a Sierra Wireless product specifically. If their brand name was strong enough to influence a purchase, then they would have significantly more bargaining power in their deals with business partners.

Their situation has a striking similarity to the relationship between game developers and publishers. A video game is essentially produced for the consumption of individuals. Yet a developer does not sell the game to the consumer directly. They sell to the publisher. In this relationship, the publisher is the heavily dominant party because:
  • they have the money
  • they lay claim to the IP
  • they take most of the revenues
  • they put their own brand equity before the developer's
The developers lack bargaining chips, because most of the time they do not have the brand power to influence a purchase. There are exceptions of course, as discussed in my previous posts. The usual remark about examples like Will Wright or Bioware, though, is that "they have their own brand equity because they were successful in the first place." But let us turn that on its head and think: "maybe they are successful because they have their own brand equity." It is a chicken and egg argument, I know. But even realizing that means you are aware that this thing has more than one direction at a time.

At the end of that presentation from Greg Speakman, I had to ask him whether they had ever considered low cost B2C marketing campaigns through e-marketing. I was pretty surprised when he admitted that no, it had never crossed their minds.

It was surprising because that was a notable company in the high-tech communications business, yet they had completely forgotten about a powerful communication channel like the internet. It is the same surprise I have, when companies on the cutting edge of new media and content creation tend to underestimate their own reach to the consumers, and blissfully hand over their marketing functions to other parties.

"Oh no, we don't do marketing," says the game developer happily. "Let the publisher spend money for that, we can't be bothered with marketing on top of everything else."

I suspect the publishers are even happier for the fact.

2 comments: said...

Hi Taylan,

To put things in context, right now games are built for and marketed to US, Europe, Japan and to an extent S.Korea. There will come a time when India and China will have the purchasing power and significantly stop buying into piracy. Not only will the opportunity be tremendous, the risks would be great too, as marketing would need to take into consideration a lot more than the usual. Then publishers would take the route that record companies took a decade back, fewer developers who they think will stick and deliver to whichever formula that works. The recession is already having this effect.

In my opinion,the task will then be rather uphill for the developer. Both in terms of getting the attention of a publisher and to maintain creative independence. So instead of a chicken and egg conundrum that you mentioned earlier, I see a lot of developers having no choice but to step in actively into scene and start leveraging their brand name to the hilt in order to survive.

The idea here is not run the marketing campaign per se, but try and bring in a laser sharp focus in terms of what one essentially wants to say. The internet can do only so much but if the expectations are managed right, the developer is in a far stronger position with much less money spent. I would use certain filmmakers to illustrate examples. Directors like Peter Jackson went to great lengths in terms of community interaction to make Lord of the Rings perfect. Kevin Smith does the same. Directors like J J Abrams and Zack Snyder take it a step further. 300 was not communicated as a film based on the best selling graphic novel by Miller, it was 'what frank miller's 300 ought to look like'. Once this expectation is set right, you end up resonating with an audience that is much more receptive to suggestions. This is something a publisher can never do, simply because the developer knows its baby better than anyone else and that raw emotion works far better than any marketing campaign the publisher can come up with.

The more a developer steps in, the less are the expectations inflated or misrepresented. The less the inflation, the more a consumer enjoys it for what it is, the more they enjoy, the more they will come back for and bring others along. It is a cycle that developers need to start working on.

Two things that would at the end of the day work in favor of the developer.

Computer games are slowly going into the territory that classic films are in. There is clearly a long tail effect in sales that is out there to be exploited. One sometimes still goes back and loads up warcraft 2 just to hear the ogre fart or see the treads of a tank go up and down them bumps in total annihilation. A classic is a classic because the experience involves more than just the graphics and the story, certain moments and certain insights while playing that makes you want to relive them is what at the end of the day works. An earnestly communicated and sustained game survives as a cash cow for a long time.

Secondly, Piracy happens in a market that is usually under served. A market like India downloads from private torrents mostly because the games either hit the shelves late and are expensive by their standards or is never promoted rightly. This market but has access to rather cheap broadband decent download speeds and have been following and enjoying games almost simultaneously with the rest of the world. Onlive as a service may one day change the game for the developer, making them look at other forms of funding like Private Equity, and bring forth a stronger play of microtransactions in such geographies helping them carve out an independant existence like say radiohead. For that to happen, they need to start working now! That's all.


Taylan said...

Thanks for your comment, Anant! Very nice thoughts.

About running a marketing campaign; this is a big part of the problem. What I mean by that is that when you say marketing to people, they essentially understand an advertising campaign. As you said, running ad campaigns is not the idea there. The kind of marketing I try to promote in this blog is all about having a coherent, consistent business strategy that incorporates market insights into the development efforts, and efficiently communicates value to the consumers.

As for the examples you gave from movies and TV, they are pretty dead on. Very good examples of how to build a dialogue and establish a brand name, beyond just buying ad spots.