There are a lot of doom and gloom headlines around at the moment. Lots of development staff being laid off, games selling far less than expected, major publishers making massive losses and release schedules that look a little thin. What is happening here?:

• The industry have become even more lemming like than normal. We get a successful game like Guitar Hero and suddenly everyone thinks it is the second coming. Other people do “me too” imitations whilst the owner of the original title flogs it to death with countless variations. Then we have the inevitable, a Beatles game that flops. Publishers are just not thinking from the customer’s perspective, people really don’t want all these similar titles.
• Annual iterations of popular titles. Another way of flogging a successful IP to death, try and get the customer to fork out every year for a slightly updated version. This is incredibly inefficient as you end up with lots of customers just buying alternate iterations. Or being turned off by the cynicism of the whole exercise. Leave 2 years between releases on popular franchises.
• Modern Warfare 2. Every publisher is frightened of being in the same market as this 800 pound gorilla. So loads of games have been launched early for Q4 ‘09 and loads more have been moved into Q1 ‘10. This is a good thing as it has spread out the previous very silly Q4 congestion. This is a bad thing because not every customer wants an adult rated war game.
• The customers are moving to online faster than the publishers are. Lots of publishers have misread just how quickly the market would change. Apple’s App Store getting one and a half billion downloads in a year and Evony getting 10 million registered users in just a few months whilst boxed cardboard and plastic retail games gather dust on the shelves is the new reality.
• Unwillingness to experiment with new IP. This is just pathetic. So many publishers now are just sitting there flogging their old IPs to death because they think it is safe. It isn’t safe at all, those IPs will not deliver for ever. Publishers need to build value in their business and the only way is with new IP. Sure it is risky, but publishing is about risk. And these days you can experiment on a cheap to develop platform and then if it works move the IP to the expensive to develop platforms. And the Apple App Store has loads of brilliant new ideas for IP.
• Awful marketing. By and large the industry markets incredibly inefficiently with advertising that preaches to the converted. Instead they should be trying to engage with the public so as to switch their spend from other pursuits. Nintendo have done this incredibly successfully but the rest of the industry have failed to take this on board.
• Secondhand sales of boxed games. Customers now buy games with an eye for the resale value. This inevitably has the effect of concentrating the market into the blockbusters, at the expense of worthy, less well known titles. And the purchasers of the secondhand games are not putting any money in the developer’s pocket.
• Mid generation lethargy. Most publishers have now released all their franchises for this generation of platforms. So they are waiting for the next generation platforms to release them all again. In the meantime they can’t think of anything for their developers to do.
• Piracy. The 360 is being hit quite hard with this now. Microsoft really to need to put a whole pile more IP protection into the Xbox 3/720/phoenix, especially if it is a mainly, or all, online machine.
• Recession. A convenient excuse. Most of the world is out of recession now (except for the UK, which has the worst run major economy). And even in recession people give up paying for their entertainment last.

So it is the management’s fault. And the few well managed companies are making hay.

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The App Store is an accident of history. (But one that was predicted on here). Apple had been making MP3 tracks available for a few years on the iStore. When they added a bit more memory and processing power to the iPod they realised that it could run third party applications, so they made an iStore for applications. And amazingly they were only doing it as a service to users, they didn’t see the business potential.

Now after a little over a year there are over 100,000 Apps and there have been over 2 billion downloads. 125,000 developers have signed up with Apple and 19.6% of Apps are games. All this has brought up some very pertinent points.

• This is the biggest success and the fastest growth, by a huge margin, of any new gaming platform in history. It has changed everything.
• Most App authors self publish to cut out the greedy publisher. They end up making far less money as a result. Apps need marketing and marketing is one of the jobs of a publisher.
• Intense competition has driven down App Store prices remorselessly. This is largely due to self publishers, in their ignorance, using the price mechanism as a marketing tool.
• Apple put up very little in the way of barriers of entry to publishing on App Store. This means that there are vast quantities of total rubbish on there.
• The other side of Apple’s policy is that there has been a vast flowering of creativity on App Store. The biggest ever in the history of the video game industry.
• Because Apple set this up as a service, not as a proper business, there is little IP protection. Piracy is rampant. Several game publishers have reported it as being in the 90% zone. Even at the stupid low prices that Apps are. People will steal to save pennies.
• The App Store gives you instant global distribution. 77 countries can download your app the instant it is available. This has shocked the whole digital IP distribution industry. There are now lots of App Store clones for other platforms.
• High street, cardboard and plastic retail distribution of digital IP has been shown up as being a dinosaur, their business model is now in steep decline.

Apple realise that they have a business model that is a license to print money. So it is pretty obvious that they will use it as a template. Firstly for their imminent tablet device which will be like a cross between a netbook and an iPhone. Then with their home console which will evolve from Apple TV just as the iPhone evolved from the iPod.

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But he has found an interesting way to market his campaign. He has set up a bogus Twitter account called bruceongames2 and made tweets to it pointing to websites that support his hate campaign. Then comes the clever bit. From this account he then followed the followers of my legitimate account. Each one then gets the follow notice, and then if they click through to find out why I’ve apparently started another account they get to see all his hate tweets.

My legitimate Twitter account is Bruciebabe.

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I opened one of the first computer stores, Microdigital in Liverpool, in 1978. So I was in a good position to see the rise of Apple to dominate the personal computer (PC) market. I even visited Apple in Cupertino in California and was offered the UK distributorship. So this put me in the front row as they built up to own the market, then threw it all away.

Apple computers were well made, came with excellent documentation and were easy to use. All of which was not necessarily true of the competition. Apples were also expensive but were worth the extra. They became a bit of a cult, a fashion item, as well.

The big strength of Apple computers was that the software and the hardware came from the same company, so they worked. The resultant dominance in the early 80s was such that other PCs might as well not have existed. Apple had a virtual monopoly. Then along came Microsoft’s MSDOS and changed the rules. Here was a standardised operating system (and consequential applications) that would run on machines from many hardware manufacturers. So the hardware manufacturers had to compete against each other on price and features. And it was war.

The result of this war was the survival of the fittest, rapid evolution that improved the breed. And Apple was left well behind looking underpowered and overpriced, they could not even vaguely get near competing with the MSDOS machines. So Apple’s market share collapsed and they fell back to serving niche markets such as pre publishing. In just a couple of years they went from near monopoly to sideshow.

And history could very well be repeating itself. Substitute Personal Computer with Smartphone. And substitute MSDOS with Android. Otherwise it is the same. Apple dominate the consumer smartphone market with the iPhone. The hardware and the software come from the same company and it works. It is a fashion item, a bit of a cult. Android, however, is available to all hardware manufacturers. Most of them are developing models that use it. So they will have to compete against each other on price and features. It will be war with rapid evolution improving the breed. Already the Samsung i7500 looks better featured than an iPhone.

Some may think that the tens of thousands of applications on the App Store make the iPhone entrenched. But remember that these were put together in a little over a year, so Android can do the same in a year. Just as Apple’s dominance of PC application software was quickly overcome when the MSDOS computers arrived on the scene in big numbers.

Of course Steve Jobs and Apple, having been there before, may have the answer this time. They need to entrench their position, which they are doing by going to multiple air time providers in each territory and by going to new territories. But Android will be doing all this too. They need to very rapidly advance their hardware technology. There is plenty of room to do this, the iPhone has a rubbish camera and no OLED screen, for instance. And the iPhone operating system has lots of room for improvement. But Android will be doing all this too.

Apple are moving on from the iPhone with a tablet device and probably a home console. Maybe this is their strategy. Don’t compete, move on.

The one saving grace that Apple have here is their brilliant marketing. In fact, to me, Apple are a marketing company first and a technology company second. Compare and contrast that with Google who have a trail of great products that have failed due to poor, almost non existent, marketing. But Android is different because it doesn’t need Google marketing, it will be marketed by all the handset manufacturers and air time providers. Companies like Vodafone, Sony Ericsson, Sprint Nextel, Samsung, Motorola, LG, Toshiba and Garmin. Formidable, isn’t it?

Now for the gaming perspective. The iPhone and App Store have produced the biggest flowering of gaming creativity in history. In terms of range of products they have left every other platform behind. However the business model employed here is easily copied. So we are moving into a new age where the iPhone game publishers will maximise their profitability by going multi format. Develop for Android, iPhone, PSP, DS and possibly PC simultaneously and reap the marketing benefits. It makes sense.

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Inevitably, and for reasons explained many times on here, the Wii bubble has finally burst. In the half year to the end of September sales were down by 40% compared with the year before. Nintendo president Satoru Iwata has no option but to admit: “Wii has stalled” he even admitted that the price drop has failed to arrest the decline: “With the price drop, sales returned to a certain level, but they just did not reach the level of last year around this time”. Which was all as inevitable as night follows day.

A lot of the success of the Wii was fad. People becoming lemmings under the onslaught of peer pressure. Just like the Hula Hoop and Rubik’s Cube for previous generations. And fads have very sudden endings as the zeitgeist moves on to something new.

The Wii is a very strange and paradoxical device, its hardware capability is mainly last generation yet it boasts an innovative and compelling gesture interface. Most Wiis are bought as family toys and are little used yet it has some amazing games including possibly the stand out title of this generation, Super Mario Galaxy.

The Wii has had its popularity and life massively extended by the Balance Board and Wii Fit, but there are only so many overweight middle aged women willing to pay so much in a feeble attempt to assuage their vanity. So it looks like this market is exhausted, much to the dismay of the many publishers who thought that this was a bandwagon they could jump on. The reality is that the Balance Board is panning out as being the Reebok Step mark 2.

It doesn’t help that you can buy a vastly better machine, the Xbox 360, for less money. Even Sony have tried to be more price competitive and have improved their act in many other ways. Both these machines are introducing gesture interfaces that will finally remove the Wii’s main trump card.

We have known for a long time that the Super Wii is in the way with HD graphics and a rumoured Bluray disk drive. But this is thought to be coming some time after the middle of next year and the market needs it now. Nintendo have got their timing very wrong this time.

It has to be said that the Wii has done video gaming a massive amount of good. It has taken the medium to new markets and new demographics, vastly expanding it for everyone’s benefit. They have introduced new genres of games and extended old genres in a prodigous burst of creativity. And they have continued in their fine tradition of production values that put most of the rest of game publishing to shame.

So what is going to happen? Well it is a golden opportunity for Microsoft (and to a lesser extent Sony) to make hay whilst the sun shines. They can fill the vacuum that Nintendo have created. They need to give tens of millions of Wii owners a compelling reason to upgrade and I am sure that their marketing teams are working at doing exactly that. And my prediction still holds that the Xbox 360 will ultimately sell more units than the current non HD version of the Wii.

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Yesterday I was at the Best of British conference in London rubbing shoulders with the good and the great of the video game industry. And once again the stark message came over that there are some people who get it when it comes to marketing. And there are big swathes of the industry who don’t get it at all.

In the 1960s and 1970s consumer marketing was perfected by huge multinational companies that manufactured detergents for washing clothes. This is a commodity product, one detergent is much the same as another detergent. So the wise housewife will buy the one that does the job for the least money. But most housewives don’t, this is because they are victims of the marketing of the detergent manufacturers.

This form of marketing involves creating and building a brand by shouting at your potential customer. And shouting can take many forms. TV commercials, billboards and print advertising were especially popular. All that mattered was getting the brand message across. This was unbelievably inefficient and cost an absolute fortune. But the detergent companies didn’t mind because they were rolling in money. Every household needs to wash their clothes and housewives were willing to pay a hefty price premium just to buy into the brand. The other reason the detergent companies didn’t mind is because there was no alternative. It was shout at your customers or nothing. So it was a war of brand against brand (often owned by the same company) in a shouting war where the winner was the person who spent the most money.

Of course the methods, practices and techniques of the detergent wars were adopted by a wide range of other manufacturers selling an immense range of other products, even when it was patently inappropriate. And it is what a lot of the game industry, unbelievably, still does today. They needlessly throw very many millions away shouting at customers.

When it comes to consumer marketing (there are many other sorts) it is important to step back and look at what you are trying to do. Firstly you have to clearly identify who you are trying to reach, you are wasting your time trying to tell the Women’s Institute about a first person shooter. Then you have to work out the message that you want to get over to these people. Finally you need to investigate what is the most cost effective way of getting this message over to them. Now this may sound very simple and very obvious, but, unbelievably, most people spending money on marketing don’t do it.

Video games are not detergent. Video games are interesting and rouse emotions in people. This actually makes them very, very easy to market, because your customer wants to listen to what you have to say. There is no need whatsoever to shout.

Which brings us to the internet. The internet is any true marketeers dream. The ability to interact in real time with your entire global customer base is something that previous generations of marketeers could only dream about. It is as good as it can get. And the tools are free and easy to use. Wordpress, Facebook, Twitter, Reddit, YouTube.

So let’s look at what a game marketeer should be doing, rather than shouting at people like the dinosaurs do. The first thing to remember is that the most powerful marketing tool, by an immense margin, is word of mouth. So you want people talking about you. Then you need to actively engage with your customers and potential customers. And by engage I mean listen just as much as talk. You need to generate genuinely interesting marketing content. Blogs and videos are essential. And you need to keep on top of it, keep it fresh and continuously analyse what is happening. Easy, if you have a brain.

In this world the press release is more powerful than the advertisement, because the press release is telling people stuff that they want to know. Whereas advertisements are things that people want to ignore. Press releases tell a genuine story, they feed people’s appetite for news and they can be leveraged to reach vast audiences with key marketing messages.

So we have two distinct marketing philosophies. One the one hand the outdated, expensive detergent methodology still amazingly used by some. And the massively superior methodology of engaging with your customers which, refreshingly, more and more of the industry is gradually coming round to. The amazing thing isn’t just that engagement is better in every possible way to get the messages that you want over to the right people, it is also a whole lot cheaper.

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I would like to point out to Patrick and to Train2Game and to Metropolitan International Schools Ltd that there is an automatic right of reply built into an internet blog like this. At the bottom of every post there is a comment section where they can put their side of the argument, without the need for any recourse to law. This is what most people do and it gives the reader a balanced view of the issues. I suggest that they do this.

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He clearly says “We don’t want to sue you” and “There is No Such Thing As Bad Press”!

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It is a little interesting that both Gamesindustry.biz and MCV have recently released traffic details. Gamesindustry.biz at over 340K monthly uniques, MCV at over 240K monthly uniques. Now both these sites publish multiple articles every day written by multiple professional journalists. So my whimsical opinion pieces can hardly be expected to compete.

Here are the numbers that analytics are telling me for the last month of Bruceongames: Visitors 100,869, Uniques 91,014, Page views 185,954.

Imagine what they would be if I had a bit more content and a marketing budget!

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There is something about video gaming that a lot of people don’t understand, especially many politicians and much of the traditional press. And that is that gaming is just another form of media. Like the ballet, television, books, opera, film, newspapers etc etc. That is all it is. Of course gaming has made most of the older media obsolete because gaming has the technical advantages of interactivity, non linearity and connectivity. These represent such a paradigm shift that it is just about impossible to convert content from the old media to games and vice versa. Gaming also has the phenomenally powerful task/reward mechanic which is what will ultimately seal its position as the main method for delivering education.

This lack of understanding of what video games are has lead to them being demonised by the ignorant. And unfortunately the ignorant include prominent politicians and newspaper editors. But it has always been so, misunderstood new media is a feature of our history. The arrival of mass literacy in Victorian Britain was followed by the penny dreadful novel which were perceived to corrupt the youth of the day. American 20th century comic books were thought to be so bad that they were investigated by the Senate Committee on Juvenile Delinquency, there were public burnings of comic books (it isn’t just Hitler!) and some cities imposed outright bans. The establishment was so frightened of the early movie industry in America that The Supreme court in 1915 removed first amendment protection from films and in 1927 the industry was so scared of external intervention that it imposed the Hays Code upon itself. And of course in more recent years television has been blamed for youth violence, loose morals, poor academic attainments and obesity, amongst a plethora of other problems.

So against this background of fear rooted in ignorance it was hardly surprising that three British charities,  The British Heart Foundation, Cancer Research UK and Diabetes UK, wasted vast amounts of their donors money on a very silly advertising campaign demonising video games, implying that they caused early death. A totally ridiculous position. This campaign was in support of a government health advertising campaign under the Change4Life banner, but the government’s adverts were completely different using plasticine Wallace and Gromit type figures.

(As a side note some sectors of the press didn’t let the facts get in the way of a good story and hysterically tried to blame the charities’ campaign on the government.)

And now we have the deepest irony, pouring total scorn on the three idiot charities Change4Life has now approved a video game, Wii Fit Plus, which will be marketed under its banner. According to the BBC: “A health department spokesman said active video games were a ‘great way’ to get kids moving.”

I think that this is a great, a fantastic, example of how quickly a lot of people are becoming educated about the reality of video games. And how using false and simplistic stereotypes no longer works. A lot of this shift in attitude comes from the democratisation of the power of the press. The centre of gravity of knowledge has moved from print and broadcast to the internet. Blogs, forums, social networking, social indexing (stumbleupon, reddit), microblogging and all the websites (like the BBC, Wikipedia, Amazon and Metacritic) that invite comment and participation are the internet. The dynamic, interactive, user generated whole that reflects the humanity that created it. We can no longer be dictated to by old media and dinosaur politicians. The world has changed for the better.

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