[NOTE: This blog post initially appeared on Industry Gamers]
By Alex St. John, hi5 President & CTO
I'm well aware that making this claim is as close to heresy as declaring game consoles dead by 2012 was back in 2007, but as before my reasons for believing this are based on careful analysis of the facts and tremendous experience with online gaming over many years. The reason why this claim is true is simple and easily understood. The core value proposition of online gaming is fundamentally different from that of the console game world. Console games are sold on the promise of being great entertainment. The typical marketing budget for a console game is roughly 12.5% of its development budget. Those marketing dollars are spent buying the consumer perception that the contents of the box they buy will be a great game AFTER the consumer has plunked down $60 bucks for it. The consumer isn't allowed to find out if the game is really worth the money until they've committed their money to it. In this scenario putting Spider-Man or Harry Potter on the box certainly helps to sell the promise of great entertainment.
The online world, however, harkens back to the days of the game arcade, which didn't demand a major cash outlay on the consumer's part to find out if Pac-Man or Asteroids was truly a great game. It cost a quarter, and if the game didn't deliver the consumer never played it again. Thus, like modern online games the amount of money an arcade game made was in direct proportion to how addictive the actual gameplay mechanic was, NOT on how big its marketing budget or movie-tie-in was.
Online games usually start out as free-to-play, converting the consumer to a purchase after enough free play has been consumed to reasonably assume that the consumer is addicted, at which point, the game may up sell to a premium offer. It thus shouldn't come as a shock to anyone to observe that there are no examples of hit online games based on a Hollywood IP franchise. In fact, the most successful IP-based online games are based on famous games themselves such as Scrabble, Wheel of Fortune and Family Feud.
The analogy is similar to the difference between hit television shows and hit movies. Hit movies are often based on famous IP and have huge marketing budgets because, like boxed games, they rely on the PROMISE of being great entertainment to get consumers to purchase tickets to them. Hit television shows, however, are rarely based on famous IP; they rely on their own content quality to create a successful brand such as Friends, Seinfeld, Sopranos, Lost and many others. A hit television series' primary marketing vehicle is the addictiveness of its own content.
There is only one point in an online game's lifecycle when a brand association may have a measurable impact on its success and that point is when the consumer is surfing an online gaming site looking for games and sees an icon associated with a familiar brand. It may well be the case that a good brand can increase the probability that a consumer will click on that particular game. Although this point has not been proven, it has been repeatedly demonstrated that pictures of pretty girls, cute animals and fake Windows warning dialogs and almost anything animated are far more likely to be clicked than, say, a Spider-Man icon.
There was a time early in WildTangent's history when this debate raged avidly within the company, and finally to settle the point I allowed a deal to rebrand one of our most successful downloadable games with a hugely famous Hollywood movie franchise and launch it side-by-side with the unbranded original on Yahoo Games weeks ahead of the release of a major motion picture based on the IP. The two games were identical except for brand association. The result was that although the branded version of the game got more initial clicks, its conversion rate was 1/3 less than the hit unbranded game. Yahoo, excited to have the branded franchise game even promoted it more actively across their site to no great avail. Why the huge difference? The original unbranded game had been given a strong winter/Xmas theme intended to impart a festive holiday spirit to the player without being an overtly Xmas game. The result was that parents were much more likely to buy it for their children as gifts especially during the holidays. In this case, all things being equal, a well crafted theme trumped a hugely popular children's brand by 3X in sales.
By Alex St. John, hi5 President & CTO
I'm well aware that making this claim is as close to heresy as declaring game consoles dead by 2012 was back in 2007, but as before my reasons for believing this are based on careful analysis of the facts and tremendous experience with online gaming over many years. The reason why this claim is true is simple and easily understood. The core value proposition of online gaming is fundamentally different from that of the console game world. Console games are sold on the promise of being great entertainment. The typical marketing budget for a console game is roughly 12.5% of its development budget. Those marketing dollars are spent buying the consumer perception that the contents of the box they buy will be a great game AFTER the consumer has plunked down $60 bucks for it. The consumer isn't allowed to find out if the game is really worth the money until they've committed their money to it. In this scenario putting Spider-Man or Harry Potter on the box certainly helps to sell the promise of great entertainment.
The online world, however, harkens back to the days of the game arcade, which didn't demand a major cash outlay on the consumer's part to find out if Pac-Man or Asteroids was truly a great game. It cost a quarter, and if the game didn't deliver the consumer never played it again. Thus, like modern online games the amount of money an arcade game made was in direct proportion to how addictive the actual gameplay mechanic was, NOT on how big its marketing budget or movie-tie-in was.
Online games usually start out as free-to-play, converting the consumer to a purchase after enough free play has been consumed to reasonably assume that the consumer is addicted, at which point, the game may up sell to a premium offer. It thus shouldn't come as a shock to anyone to observe that there are no examples of hit online games based on a Hollywood IP franchise. In fact, the most successful IP-based online games are based on famous games themselves such as Scrabble, Wheel of Fortune and Family Feud.
The analogy is similar to the difference between hit television shows and hit movies. Hit movies are often based on famous IP and have huge marketing budgets because, like boxed games, they rely on the PROMISE of being great entertainment to get consumers to purchase tickets to them. Hit television shows, however, are rarely based on famous IP; they rely on their own content quality to create a successful brand such as Friends, Seinfeld, Sopranos, Lost and many others. A hit television series' primary marketing vehicle is the addictiveness of its own content.
There is only one point in an online game's lifecycle when a brand association may have a measurable impact on its success and that point is when the consumer is surfing an online gaming site looking for games and sees an icon associated with a familiar brand. It may well be the case that a good brand can increase the probability that a consumer will click on that particular game. Although this point has not been proven, it has been repeatedly demonstrated that pictures of pretty girls, cute animals and fake Windows warning dialogs and almost anything animated are far more likely to be clicked than, say, a Spider-Man icon.
There was a time early in WildTangent's history when this debate raged avidly within the company, and finally to settle the point I allowed a deal to rebrand one of our most successful downloadable games with a hugely famous Hollywood movie franchise and launch it side-by-side with the unbranded original on Yahoo Games weeks ahead of the release of a major motion picture based on the IP. The two games were identical except for brand association. The result was that although the branded version of the game got more initial clicks, its conversion rate was 1/3 less than the hit unbranded game. Yahoo, excited to have the branded franchise game even promoted it more actively across their site to no great avail. Why the huge difference? The original unbranded game had been given a strong winter/Xmas theme intended to impart a festive holiday spirit to the player without being an overtly Xmas game. The result was that parents were much more likely to buy it for their children as gifts especially during the holidays. In this case, all things being equal, a well crafted theme trumped a hugely popular children's brand by 3X in sales.