[MUD-Dev] Differentiation and The Marketing of MUDs [was R& D]

Ron Gabbard rgabbard at swbell.net
Thu Jun 6 22:19:07 New Zealand Standard Time 2002


----- Original Message -----
From: "Brian Bilek" <brian at darkalley.net>
> Dave Rickey wrote:

>> With certain narrow exceptions (sports games, mostly), games
>> don't work that way (at least not yet).  You cannot take a
>> generic product, 99% similar to everything else in the category,
>> throw lots of money into marketing, and guarantee a profit.  This
>> drives your typical business exec absolutely *nuts*.  It hasn't
>> even matured enough to be handled like music and movies.  With
>> only a handful of exceptions (Sid Meier, Will Wright, John
>> Carmack, Peter Molynieux, and that's just about the list) you
>> cannot even bank on particular people to consistently deliver
>> profitable products.  "Past earnings are no guide to future
>> performance."

> I am quoting the above as a whole because I think you're making a
> great point.  Branding is a wonderful way, and with the case of a
> good like toothpaste (commonly available, many substitutes, little
> feature or quality variation), one of the very few ways to
> differentiate your product.  You can even be too good at branding.
> Another classic business school example: "Band-Aids," or "Q-Tips."
> When your brand name has become the generic term for a class of
> products, including your competitors', your marketing dollars are
> now helping the competition.

True and not true.  It's true that the value of your brand can
become irrelevant if your 'Xerox' brand name becomes the generic
term for copier.  However, being the product category 'icon' helps a
ton with international sales as there is much greater name
recognition with an otherwise 'foreign' product.  Coke managed to do
it early on in colas.  Marlboro did it with cigarettes.  Budweiser
is trying to do it now in beer.  While not to the extent of Xerox,
Band-Aids, Q-Tips, Jell-O, Scotch tape, or Post-It notes, each of
these brands achieved a certain degree of 'icon' status and
leveraged it into greater international sales.

> With a more complex product than toothpaste, you can spend some of
> your development dollars on changing the feature set of the
> product, and improving its quality

You can even do this with toothpaste.  True P&G story.  The Crest
Brand Management team was charged with increasing sales of Crest
toothpaste by 7% in the next year.  That is a huge amount given that
there are only so many mouths in the world and competition IS
fierce.  You know what they did?  They made a product packaging
change and increased the size of the mouth of the tube by 7%.  They
leveraged the customer's heuristic (that unquantified, intuitive
measurement that tells us how much to use of something... like how
much milk to put on our cereal) that measures the amount of
toothpaste used by length on the toothbrush... not by volume.

> Computer games are a hybrid, and rather than expecting them to
> mature into a more commoditized marketplace, or even one that
> looks like the music business, I envision it as a category unto
> itself.  I'll call it "Interactive entertainment," and while it
> certainly isn't a mature market, I see it as continuing to differ
> from pure entertainment, and I never see it becoming commoditized
> due to the nature of the products.

Some of the biggest factors I see as driving differentiators in
computer games are 1) cost, 2) development lifecycles, and 3)
rapidly evolving technology.  These games are just growing and
growing to the point where one game just can't be 'everything to
everyone'.

Our finance department used a fully-loaded (including benefits and
overhead) hourly rate of $70/hr for each developer.  That equated to
about $120,000/year per developer given 1600+ work hours/year.  (And
this is in the Midwest where things are a bit cheaper than on the
coasts).  A team of 30 people working on a game racks up some
serious investment fast.  Add in dbase licenses, game engine
licenses, development software tools, etc.  The cost is very high
for a company that is NOT a multi-billion dollar company.

Now, you have the development lifecycle.  2 years? 3 years?  4
years?  Chances are it depends on the features and functionality you
plan on having in the game and size of the development team.
However, there is a time limit where the game company has to say
"that's it".  You can't just rack up $4-5 million a year in costs
developing a game year after year regardless of what 'neat' features
may be left on the editing room floor.

Finally, you have the evolving technology.  Even if a company DID
have deep pockets and could sustain a 5+ year development cycle, by
the time the game went GA it would already be technologically
outdated.  So, you have the technology window compounding the time
constraint.

The end result is that each game is pushing a particular aspect of
the genre further and further and making the list of 'desired'
features longer and longer while the amount of time available to get
the game out remains constant (or shrinks) and the market becomes
more competitive.

While I don't want to sound like Malthus, I believe a time will come
(if it isn't already here) where customer expectations in all these
various areas will be so high that they can't be met in a single
game (unless that game is priced well above the average market price
where the company could afford the X times larger development team).
These factors, combined with the finite market, will force
development companies to focus what they do best and target a
specific player-base.  Some may shoot to develop the best, most
rewarding PvP MMOG combat, others the most immersive 'storytelling'
MMOG, and others the most 'build-it-yourself' MMOG world.

Thus, branding comes into play... (which ties back to the point
above)

> Not brand image - In this industry, isn't it somewhat hard to
> build a brand image based on perception?

Perception alone, yes.  However, it's actually much EASIER to build
a brand image based on perception because that perception is
verifiable but not that easily comparable across multiple products
for the average customer due to the time and financial investment
required to play MMOGs.  If a company touts their game as having the
best customer service in the business and present a 'customer
friendly' image to the customer, they better make sure they back it
up.  They don't necessarily have to have the 'best' customer
service... but they DO have to meet and exceed customer
expectations.  All those Volvo ads that tout 'safety' mean nothing
if I accidentally hit a garbage can while pulling into the garage
and my fender falls off.

Branding helps companies create customer expectations that they know
they can meet... and that's important as nothing is worse than
creating customer expectations then failing to meet them.

> In computer gaming, brand loyalty is almost nonexistant.

Loyalty goes both ways.  I've had active accounts in UO, EQ, AO, AC,
and DAoC for varying lengths of time.  I have since cancelled all my
game accounts except for the one I play.  All of these companies
have my mailing address, email address, and phone number.  Sheesh, I
think some of them even have my birthday (as well as my characters'
birthdays).  Do you know how many communications (outside of the
generic email newsletters) I have received from the companies with
whom I no longer do business?  One... and it was a generic 'come try
EQ again' broadcast email.

With the current state of data mining, database marketing, and bulk
email, not one of these companies could pull up my name, character
name, etc. to personalize a message and ask me to come back or at
least ask for feedback as to why I left?  (Yeah, I was in database
marketing before going back to grad school and getting into the
software industry.)  Honestly, customer retention programs in MMOGs
are piss poor.  Even my local pizza place and barber send me a
Christmas card and a birthday card and I don't spend any more money
with them than I do on these games.  (Note: UO does a nice job of
rewarding customer loyalty with their in-game 'anniversary' rewards.
I would be surprised if more companies don't adopt that as it costs
nothing to give and is a nice way of saying 'thanks, we appreciate
your business.')

Brand management is a relatively sophisticated marketing skill used
for fine tuning the product positioning and supporting the overall
marketing strategy.  It seems kind of senseless to worry about that
while a company still has the basic marketing tasks like the gaping
wound of customer retention festering away unattended.

Well, enough on that.  I just think that if companies would use half
the creativity marketing the game that they use designing/developing
the game that they'd have a much more loyal customer base and better
products as a result.

Cheers,

Ron


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