Revolutionary Measures

Being too casual

Video games are big business. Whether you measure it on the £1 billion contribution to UK GDP of the industry, or the amount of time my children spend playing Angry Birds, the impact is enormous. In Cambridge alone companies such as Jagex and Frontier Developments employ hundreds of staff, an estimated 10% of the UK’s games developers.

But the era of the blockbuster console game is coming to an end. Despite the recent announcement of the Sony PlayStation 4, more and more games are now played casually on smartphones, tablets or simply online. As the current furore about the in-app charges

Angry Birds

run up on iPhones and iPads demonstrates, all of these small payments add up to a big (and ongoing) windfall for developers. Rovio, the creator of Angry Birds, and king of the casual game companies, is allegedly worth as much as fellow Finnish tech company Nokia.

Handheld consoles have suffered – now analysts predict it could be the turn of the big budget gaming devices such as the Microsoft Xbox or Nintendo Wii. Ouya, a new Android-based console is now shipping at the knockdown price of $99 following an $8m Kickstarter funding round. As any gamer/parent will know, it isn’t just cost of the console, but the price of the games that adds up. And the Ouya’s games are expected to be low cost apps as seen on Android devices but beefed up to use the power of the console. Ouya’s not alone, with UK-based PlayJam launching its own portable GameStick Android device.

But there’s a big marketing challenge for these low cost consoles. Casual gamers with a tablet or smartphone need persuading that they should shell out for a separate device, as well as investing in new games, particularly as many already have a PC. Serious gamers will look at the quality of the games available compared to the blockbusters available on big brand consoles while children (a key market for games) want to be able to play the same games as their friends.  Additionally the likes of Microsoft and Sony have been working to turn their consoles into home entertainment hubs, acting as the bridge between the living room TV and the internet to try and cement their position in the market. Essentially it is chicken and egg – people won’t buy a console until they know there’s sufficient games available, while serious developers won’t invest until there’s a big enough target market.

I can see two ways for the likes of Ouya to get round this dilemma – and it’ll take bravery and a bit of radical thinking. Firstly, adopt the same business model as casual games themselves – give away the hardware and charge for anything beyond the basic, either as a one off or on a subscriber basis. Risky, but it gets consoles into people’s houses and if they then take 30-40% of each £1.99 spent on a game they will build a subscriber base and some revenues. The second way is to partner with companies with a big brand to bring the hardware prices down to under a tenner. Whether it is a telecoms company (Sky, BT or Virgin Media), a retailer (Amazon, Tesco) or actually an Angry Birds-badged console it would widen the audience beyond the early adopter. The worry here is that as we move to a cloud-based future traditional console makers will go down the same route and already have major brand recognition.

However the gaming wars play out, the old market of monolithic consoles is under serious pressure – now is the time for new business models and smart use of subscription and cloud-based ideas if new comers are going to emulate Rovio, rather than follow the likes of Atari into bankruptcy.

 

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April 3, 2013 Posted by | Cambridge, Creative, Startup | , , , , , , , , , , , , , , , , , , , | Leave a comment

BT’s Premier League own goal?

Michael Owen - Real Madrid
Image via Wikipedia

Despite a high profile advertising blitz, BT’s plans to sign up customers for its new Premier League TV channels are apparently not delivering, according to one analyst at least. The £30 million spend is predicted to only add 60,000 customers to the BT Vision service by the end of September.

OFCOM forced Sky to offer its rivals wholesale cheap access to its sports channels, allowing BT to move into sports broadcasting.

Obviously the figures are conjecture, but here’s the top 5 reasons I think BT Vision may not be pulling in the punters:

1. Sky’s marketing muscle
Sky’s marketing response has been powerful and emphasised how little you get from BT Vision compared to the ‘full’ Sky Sports package. A case study in defensive marketing.

2. Satellite TV isn’t just football anymore
Sky may have been founded on football but the market has matured. People now sign up for a whole range and package of channels – Sky has realised that and changed its marketing to target the higher revenue family market.

3. BT Vision is difficult to explain
People understand how Sky, Virgin Media and terrestrial TV work, and how they sign up. To get cheap football you need BT broadband and line rental as well. Why go to the hassle of changing everything, particularly as telecoms companies aren’t renowned for getting service spot on.

4. The adverts themselves
I know there was a World Cup on so recognisable footballers were thin on the ground, but little Michael Owen is hardly A list anymore. And the inability to use team strips makes the adverts look like he’s playing for Bolton Wanderers.

5. BT is not a media brand
Convergence of networks and content has been talked about ad nauseum and people understand they can bolt on broadband to lots of other services, like TV. But the brand they trust is the media one – Sky is simply stronger than BT when it comes to delivering content.

We’re obviously less than a week into the new football season and jumping to conclusions is a favourite media tactic –Blackpool for the Champions League anyone? Come November, when BT announces subscriber numbers things may have changed, but time for BT to strike back if it wants to score with football.

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August 16, 2010 Posted by | Uncategorized | , , , , , , , , , , , , , , | 4 Comments