Product Launch vs. Marketing Launch for Games

Here’s a very interesting idea from Eric Ries, author of The Lean Startup. Start-ups often mix them up but there are fundamental differences between Product Launch and Marketing Launch.

Product Launch is:

1. Making your product available.
2. Use SEO tactics to acquire users like SEM on $5 a Day.
3. Use analytics to understand from real-world user behavior, understand what your fundamental driver of growth really is.
4. It’s not a Beta test or limited launch. Your goal is not to test your software with a limited set of users – you are really going public. (Of course, you can still call the public version a Beta, but that’s another thing.)

Marketing Launch is:

1. Announce a new product.
2. Spend a lot of money in PR, promotional actions, ads.
3. PR with blogs, magazines and newspapers to get Media Coverage.
4. Buzz/viral marketing activities.

Eric is saying startups should not Marketing Launch until having a solid understanding of how their products retain and monetize, which is only really discovered after a Product Launch with real-world users.

Could that be applied to games? 

Now consider each game is a Product or even a startup all by itself (for many small studios, the company is the game). Could this tactic work?

Recognized IPs can’t do that. Marketing Launch will occur spontaneously the moment they Product Launch. Portal is a big franchise, a media powerhouse, and media will swarm to cover availability of the next installment. Less-known IPs which caught media attention in the past will also naturally draw awareness, such as the next Scribblenauts or World of Goo.

It also looks nearly impossible to operate such tactic on consoles. You must be able to update your game fast. Not only there’s the retail problem but the platform-owner also impose a lot of barriers through approval policies and fees. Even with online stores and online updates, those things constrain developers quite a lot on frequent updates.

Finally, it looks like it would work a lot better for free-to-play games than for premium, pay-to-download games. Maybe you can still go premium and do a trial-basis or shareware-basis thing, but you won’t get all of the benefits as your players will inevitably quit after a limited time.

Online Games

This tactic is perfectly possible for Desktop, Browser-based or Facebook online games. In these platforms, we can update the game daily to optimize the user experience. Development teams will already be prepared to implement user analytics and some BI to support Live operations. So we’re just changing the context of Launch a little bit.

Some people still think games can’t be saved after a Product Launch, even online games. If the DAU goes downhill after launch, it’s doom. In fact, in 2011 we saw many companies like Atari giving up from Facebook initiatives for not showing results early. They expected big launches that make a lot of money, just like old retail days.

But look how Playdom did the opposite: using the experience with real-world users and investing in a re-design of a game already Product Launched, the team of Wild Ones showed impressive increase in retention and turned into a successful product.

Mobile Games

Some people in mobile games are also pursuing big launches. Part of this is because the iOS App Store, the main Mobile revenue source of today, operates in a way to favor you to download the next cool thing. There are the Genius helper, there are the Top downloads charts, and there are the Featured tab and banners.

But take a look at Tap Paradise Cove: launched in March 2012, the game went reasonably well on downloads upon launch but quickly dropped. Pocket Gems ran a few marketing campaigns to put the game back in Top 100 Free downloads but nothing impressive. It’s been very low on downloads for the past couple months. However, it’s far from dead – Tap Paradise Cove climbed the Top Grossing charts and stayed there. The game is acquiring fewer and fewer new users, but optimizing itself for more and more retention and revenue-per-user.

The thing about Product Launching before Marketing Launching with Apple (and now Microsoft) is approval times. You need to account for the fact a binary update may take from 1 to 3 weeks to be approved. Just because of that you will likely need months to get good improvements. Android doesn’t have this problem, but if you’re using Android to optimize you app after a Product Launch, always remember Android is different.

Conclusion

I think it’s perfectly possible to Product Launch first on games, optimize the product with fewer users, get more and more of revenue out of them, and then Marketing Launch using ad networks, social networks and good old PR. In online games it looks like a very good fit. It’s also possible for mobile games.

And remember, we’re not cutting Marketing Launches altogether, as it is still a very good thing when done in the right time. We’re just making it differently.

References

http://www.startuplessonslearned.com/2009/03/dont-launch.html

http://www.startuplessonslearned.com/2008/09/three-drivers-of-growth-for-your.html

http://www.startuplessonslearned.com/2008/09/sem-on-five-dollars-day.html

http://appdata.com/

http://www.gamasutra.com/view/feature/134856/interview_the_secrets_of_woogas_.php?print=1

http://www.wired.com/gadgetlab/2011/12/ios-revenues-vs-android/

http://www.gamasutra.com/view/feature/134731/redesigning_wild_ones_into_.php?print=1

http://www.insidesocialgames.com/2012/05/03/zynga-com-2-8-million-mau/

http://gigaom.com/2012/09/16/563158/

http://www.guardian.co.uk/technology/appsblog/2012/jun/10/apple-developer-wwdc-schmidt-android

http://www.appannie.com/app/ios/tap-paradise-cove/ranking/history/#store_id=143441&device=iphone&view=ranks&start_date=2012-03-07&end_date=2012-05-31

Why Casual Games Can Also Sell Virtual Goods

This is why.

Virtual goods buyers are of all genres and ages, not only teens & tweens as many people think. Of course there are tweens-centric sites, but there is also a large chunk of 35 and older customers buying at other sites.

Since casual games are oriented towards a broad variety of customers, this is great for developers and publishers inasmuch as many kinds of audiences can be monetized.

How To Fight Back At The Lost Continent – The Brazilian Case

About a year ago I wrote an article exposing how piracy can break a game industry, noting the Brazilian case. Since then a number of people have contacted me to know more about the Brazilian market and issues. Most important, many Brazilians have come to agree with the article, knowing the vast potential of their country is greatly overshadowed by the endemic piracy and the ineffective methods to handle the situation.

But as Einstein and others said, every problem in fact presents a hidden opportunity. The fact that most business practices of major global market players can’t succeed on a hostile, piracy-filled environment, doesn’t mean the market itself can’t be successfully explored using new approaches.

So this article is all about how Brazilian companies are fighting back where Edge Online once called the Lost Continent.

Brazil

Brazilians do play games (a lot)!

Brazilians do play a lot. In fact, Brazilians are amongst the more enthusiastic video-game players and web surfers. Even without official distribution of all consoles but XBOX 360, Tectoy estimates more than 2 millions Playstation 2 on Brazilian homes, and Microsoft estimates 500,000 console units of various brands are sold every year.

Consoles are popular considering their high price tags and have growing sales, even if nearly all units are black-marketed or gray-marketed. Tectoy still successfully sells SEGA’s vintage consoles Master System and Genesis with tons of games bundled.

Round 1:  Multiplayer Games + Micropayments

Social networks are incredibly popular in Brazil. Nearly 54% of Orkut users are Brazilians, the share of web time dedicated to networks and blogs is the highest of all countries, and the invasion of Brazilians in other social networks like Fotolog originated the term “Brazilian Internet Phenomenon“.

Community Sites visitation across countries

 Hence the success of LevelUp!. LevelUp! has been consistently offering new and classic massive multiplayer games over the last years, successfully monetizing with pre-paid credits system. Each credit grants a player an amount of gameplay time in any massive game.

A big launching during 2008 was Taikodom. A top level MMO project, Taikodom understands the public and the shifting market practices across the world, offering free accounts and monetizing the user base by selling premium accounts and credits to buy in-game stuff.

Round 2: Outsourcing & Exporting

Many game studios in Brazil sell game development as outsourced services to other companies and publishers. While some have broad spectrum, with projects for many platforms and markets, others are strictly focused and specialized. For example, Webcore Games on advergaming, Gestum for serious games and e-learning, and Interama for casual games.

Exporting is also very important for many studios. In fact, according to Abragames, the national association of game developers, 43% of all game production is exported.  Southlogic was a major exporter of products and services –  such a  good one that in January 2009  it was bought by Ubisoft.

Round 3: Zeebo

And then comes the Zeebo, the most important announcement for the Brazilian game industry in more than a decade. Zeebo is a new game console with a unique approach. It focuses on solving the two major problems of console game business at developing markets: high-street piracy and distribution costs of physical units. No last-generation graphics but still a very good value, provided by fully-localized content to Portuguese (which is rare even on multi-language titles worldwide) and culture-compatible games with true mass market appeal.

Zeebo

Zeebo was announced at GDC 2009 with mixed reactions. Of course criticism is always welcomed, but I think some bloguers miss the point, as some missed the  point of Wii and its “terrible non-HD graphics” back in 2005.  The point of Wii, and I believe also the point of Zeebo, is reaching untapped markets.

The platform have support from main publishers and their studios, and Tectoy Digital is one of the most important Zeebo developer.

Round 4 (Extra Round): Government support

Last, but not least, the official government support for the game industry through the Department of Culture and its BR-Games contest is key to trigger new studios and new products. Specially in a country where venture/angel investment money is a relatively new concept. Interama itself was founded with a sponsorphip from the first edition of the BR Games contest.

K.O.

2008 and those first few months of 2009 had good news for the Brazilian game industry. The Lost Continent has chances to develop and grow from now on. Many Brazilian game developers,  including myself, have turned from pessimists to believers. I hope many more will follow.

The Zeebo Console

Today Tectoy is announcing a major breakthrough for the Brazilian game industry: the Zeebo game console. Zeebo is one of those rare systems released outside USA or Japan. This is exactly why it has a high chance of success.

Introduction to Zeebo

Zeebo is a game console based on Qualcomm technologies for high-end mobile devices. It has a nominal processing power somewhat equivalent to a PSP, OpenGL|ES 1.0 hardware compatibility over a dedicated GPU and is capable of 3G mobile network connection (HSUPA), scaling back at 2.5G (EDGE) or 2G (GPRS) where necessary. It features BREW 4.0 as the operational system, three USB ports for joysticks and accessories, one SD card port, and composite video output along with stereo audio. There is no media – games are downloaded through ZeeboNet network, making Zeebo the first of the forthcoming download-centric generation of game consoles.

Clearly the specs of the system aren’t designed to match the technology of the current seventh-generation. But this is not the point. The goal is rather to implement viable solutions for two major problems of the console business on developing countries – price and distribution -, while presenting good value for players.

The Problem on Price

As I once wrote Brazilian game market suffers greatly from piracy. The first major reason is price.

Due to heavy taxes and high logistical costs, an official console game costs around US$ 110 and PC games around US$ 70. Considering the per capita income is US$ 9k against US’ US$ 47k, one could argue that buying official games is not only 2-3 times more expensive in absolute price, but also 19 times more expensive when income is factored in!

But Zeebo games are downloaded using 3G networks. As a mobile service instead of physical units, taxes are much lower and logistical / manufacturing costs are non-existent. Therefore, games can be priced from US$ 4.45 to US$13.10.

Digital Distribution Is The Key

The other major reason for widespread piracy is the distribution aspect itself. In a country where logistics are expensive due to infrastructural problems and illegal street vendors are commonplace, one just can’t compete on regular terms. Black-market reselers nowadays can get new releases way faster and way cheaper than any regular, tax-payer CD reseler will ever be able to.

But a solid digital distribution model is a viable way to fight back for two reasons. First, new game offerings will be instantly available from ZeeboNet to all players of the country, which is faster than even the fastest black-market reseler. Second, the library available online will eventually feature much more game variety than a street vendor can carry on backpacks. (Also enabling a Long Tail-based strategy.)

Think Global, Act Local

Brazilians do like video-games and play a lot. Despite the fact PS2 never had any official representation in the country, Brazil alone accounts for 2% of all PS2 units in the world. Microsoft estimates over 500 k units of various game consoles are imported every year, and over 300k 3D video cards for PCs are sold every month. But strategies and models of traditional cardboard-and-plastic distribution of global actors have proved again and again to be completely inadequate for the country’s peculiarities.

The game industry needs products and strategies that adapt to local behaviors instead of ignoring them. It needs strategies that treat pirates as the competitors they truly are today and offer sound advantages for buyers of official products.

I firmly believe the Zeebo proposal is a viable business model option that can finally start to monetize and legalize a game market that already exists but is dominated by mafias. No doubt this is a brave move in a country Edge Online once defined as a member of The Lost Continent.

I’ve been working on Zeebo games production for 5 months now and it’s pretty exciting to be a part of this innovation.

UPDATE: also check out my latest post on Zeebo, How To Fight Back at The Lost Continent

How Piracy can Break an Industry – the Brazilian Case

I’ve been reading about Nintendo urging governments for more actions against game piracy around the world. Their claim specifically mentions Brazil. I’d like to add more information about this country (since I live here :D).

This is a short story of how piracy broke an once prosperous industry, and hopefully it can be a warning for the game industries of other countries.

The 8-16 bits Era

During the 8 bits and 16 bits era, Brazil had a strong presence of Sega products through partnership with a local company, Tec Toy. The Master System and later the Mega Drive (Genesis) systems were hits. Tec Toy made localizations of major titles like Phantasy Star and Riven (with voices dubbed for Portuguese!). Growth and media awareness was high – to the point a very popular TV show (Programa Silvio Santos) had a video-game competition around Sega games like Sonic.

In 1993, Nintendo arrived officially in the market with a join venture with the biggest toy-maker, Estrela, and a major electronic devices maker, Gradiente. Super NES was officially released, and one could find official cartridges in major super-stores, pretty much the way Americans buy games at Wal-Mart. The market was promising and realistic analysis projected a size of US$ 1 billion for the first years of the 21th century.

Playstation Era: piracy runs rampant

Then it came the Playstation. It was a shift for the industry globally, and even if not officially released here, it was expected to be imported and compete with local manufactured systems. Fair enough. But what happened next was completely different from a healthy competition.

The CD-based platform allowed piracy to take over the official players with incredibly cheap and low-quality copies of games. The government did nothing to stop it – on the contrary, taxes over games was (and still is) so high it was impossible for shop owners to sell at a competitive price. So they just stopped selling entirely. Why insisting on something so difficult if store spaces can be filled with more salable products?

Playstation was never released officially in Brazil, but smuggled units became wildly popular and replaced official systems. Every Playstation-owner had CD-cases filled with pirated games. The joint-venture of Nintendo bankrupted, and Tec Toy came very close to close doors as well.

Smuggled Playstation 2 units consolidated piracy afterwards.

Game market today

Game piracy is endemic: 94% of PC retail games and nearly 100% of console games are pirated. Not even the richest youth of the country bothers to buy original console games, which cost US$ 98. Like everyone else they can easily spot illegal street vendors selling pirated games for US$ 8 or less. On online-distributed games, even low-cost Brazilian titles in Portuguese like Brasfoot (US$ 7) and CaveDays (US$ 14,5) are hacked by piracy-dedicated blogs, foruns and Torrent sites.

The outcome: Brazilian game market is estimated to be around US$ 52 millions. A pathetic performance for the 8th biggest economy in the world.

Cops and illegal street vendors. Business as usual.

I applaud Microsoft for making a bold attempt to bring XBOX 360 in 2006, the first console officially released here in many years. I also applaud the few Brazilian game developers for the courage to struggle in such a hostile market. They are incredibly talented, could do wonders, but have only four options to survive as developers: subscription-based online games, mobile gaming, advergaming or exporting.

What about Nintendo claim?

Nintendo should forget about having any support from the Brazilian government. Because even if congressmen hear the claims, they will first have to combat the ever-increasing DVD piracy problem. What happened to games is happening with the DVD industry – street vendors with pirated copies will break it. Even the President was cough watching pirated movies!

Could we write better laws? We already have good laws regarding copyright infringement. But police say “there are worse crimes to combat”. And that’s probably true: we also have good laws regarding homicide, but just 1% of murderers are solved in Brazil.

o

An actor of a widely-pirated movie, “Tropa de Elite”, goes after an illegal street vendor!

Second Lives

So, I was doing some sort of a research about Second Life and its possibilities for game developers, and I found several other “Second Lives” clients. The graphics of Entropia Universe impressed me, but I think the hardware requirement is high for more casual players. “There” seems to be more casual and friends-oriented, and Active Worlds seems to be more focused on build-your-dreamed-house features (which is interesting considering the success of Home Sweet Home and The Sims).

What really cough my attention was Red Light Center, a sex-oriented 3D environment. Undoubtedly, the porno industry has presence in other 3D worlds, but this one presents a very curious strategy for subscriptions: you may log in, interact and visit almost any place the world for free – but you only get access to the really hot stuff – virtual sex and orgies – by paying the VIP account, 20 bucks month.

I mean, “hot stuff” for those who can get excited with low-poly 3D models screwing… 😉

Non-combat MMO?

I was thinking if a MMO game without combat would be possible. I found an interesting experiment called Seed, but it failed. My partner Tom wondered if Second Life would be an example, but SL isn’t really a game, is more like a social environment, much more like a 3D version of IRC or Orkut. A Tale in the Desert seems to be a good candidate.

Let’s face it, MMO combat is nonsense. Traditional video-game RPG combat is nonsense. To evolve, you have to kill things like pigs, zebras, dinossaurs, giant lizards and angry mushrooms to evolve. Why is that? Come on, even if you lived in the Middle Ages, you wouldn’t kill a dog in the street or a deer in the woods just to become more powerful. 🙂

The reason is that such a level system is still based on the old Dungeons & Dragons 1st Edition Experience Points (XP) model – kill the beast, get stronger. But this system was created in the 70’s, for tabletop games to fill young men afternoons. Since then, a number of other RPG books have created much more meaningful gameplay and experience systems – even the present 3th Edition of Dungeons & Dragons.

Well, so, what’s next? Seed failed. All the mainstream MMOs are combat-centered on the old D&D model. Why a non-combat, or maybe just non-combat-centered MMO would succeed? For the same reason casual games succeeded: there is an enormous amout of people out there that simply want some non-violent fun on their spare times. Some people are even investing on “Casual MMO” projects for the years to come, but I believe one already exists: it is NeoPets.

Speaking of cloning…

I was just reading a great GameZebo’s article about the year of 2007 for the casual industry, and I’d like to echo Joel Brodie statement of “2007 can be defined as the year in casual games where innovation took a back seat to sequels and uninspired me-too products” with the following:

I present you the best-seller Burger Rush, released on middle-2007, which I love!

And then here goes Pizza Chef, released a few days ago:

Take your own conclusions. As for me, I’m sure the industry can do better.

PC OS for 2008 and beyond

For the casual game developers, I think it is insightful to have a look on these articles:

Why choosing XP over Vista? and 2008: Linux’s year on desktop 

They state two trends on the PC OS market for 2008 and beyond:

1. The faster spreading Vista distribution is Home Premium Edition, not Ultimate nor Home Basic. For game developers, the main difference between Basic and Premium editions I believe to be the Aero interface and the XBOX integration on Windows Media Center;
2. Linux computers are coming for good with the spreading of cheap laptops. The main impact will be on 2009, but we should think on preparing our games to have Linux versions (and use Linux-friendly frameworks);

Would Lode Runner clones mean arrow keys are now “in”?

I juts posted about cloning, and I received two interesting links do download two games: Snowy Treasure Hunter 3 and Super Granny 4. They are both clones of the classic Lode Runner games. Very well made games, apparently focused on casual/kids market.

What pitches me about those is the arrow keys control for the user. We know the PopCap maximum: where if the game doesn’t have a simple enough mechanics to be played entirely with the mouse and its left button, so the game design is not simple enough. But, like those two games, people taking chances on different control schema.

I agree with PopCap, but I don’t see it as a dogma – I believe that arrow keys could be used on casual games, as well as SPACE key. Even considering the average casual player demographics are not core computer users, people are not stupid – they can get used to simple controls on keyboard. However, to do use keyboard control on casual titles, you must:

1. Be sure game needs arrows – Make the game worthy of the extra time players not used to keyboard control will have to spend until getting it. Have absolutely sure the keyboard control really adds up to the game overall experience, and the same could not be accomplished with any mouse control workaround
2. Teach players – Explains it right in the first game screen – casual players are all too used to use mouse, so you must make it clear it won’t be used.
3. Beware the down arrow – Try to focus on the left and right arrow, with some function for the up arrow. Know that the down arrow is the most difficult to use when your middle finger is naturally resting near the up key when using left and right arrow keys. Just ask someone you know that doesn’t use computer too much to play with all arrow keys and watch closely.