You know, for kids

With the announcement of the Xbox 360 Arcade version of the console this week, there has been some noise about how Microsoft is going after Nintendo's 'family' market. While I do think the family market is worth going after, I find it amazing how many people seem to have no understanding as to what the family market is.

Quotes from recent press releases:

...the Xbox 360 Arcade system features the industry leading family settings that allow parents to control what their kids are watching and playing

Nickelodeon delivers three top shows to Xbox LIVE, also available today, including programming for the Nick Jr. hit series "The Backyardigans."

...kids of all ages can download the entire first season of the educational and imaginative, play-to-learn, top-rated preschool series "Blue's Clues."

Also being introduced today are new kid-friendly game titles, "SHREK-N-ROLL" and "SpongeBob SquarePants: Underpants Slam," based on two of the most popular family icons in animation.

The Xbox 360 Arcade or 'family' system may succeed in spite of its message, but I think that is quite unlikely because the message is missing a fundamental understanding of what a 'family' is.

The definition of family is: parents and their children, considered as a group [ref: Dictionary.com].

However, the press releases are using the word 'kids' and 'family' as interchangeable. The message is that Sponge Bob is 'family content' and that a 'family' console is one where parents play one thing and kids play something else (and that separation is enforced by 'family settings').

Kids are a part of family and parents are a part of family, but for it to be a family you have to consider them together. Adding kid content to a console does not make it a family console. For it to be a family console, you need to have both kids and parents playing together. (and I'll be real honest with you, I'm not playing Shrek or Sponge Bob)

Consider Wii Sports. It is succeeding not because it is content for only kids or only adults, but because it is content that both kids and adults can play together. It is a family game.

When you think of a 'family' board game, you don't picture kids playing Candyland in the same room where adults are playing 'D&D.' Family is playing together, not having controls to keep the kids from playing what the adults are playing. The fact that you need controls to keep the two separate isn't family friendly, it is an affront to every mother who is involved in purchasing a game system, and if you are looking for a true family system, mom has to be involved in buying it.

Family Controls are something that the core male gamer looks for to keep his kids from playing the 'M' rated games that he is playing. The mother doesn't want the 'M' rated games in the house irregardless of who is playing them. The gamers who are proponents of the idea that blood, violence and sexual content is mature [definition: fully developed in body or mind, as a person], are only further pushing video games into the realm of the juvenile.

Focusing on parental controls and Shrek places the console squarely in the 'OK for my kids' mindset, not in the 'family' mindset.

The misconception that family content is kid content I believe will sink the current Microsoft 'family' campaign. One of the reasons that Pixar movies do well is because they aren't for kids, they really are family content. Adults want to go see them.

In order to create a family platform you need to create something that is enjoyed by both kids and adults together. It is a far from trivial task that Nintendo accomplished with the Wii by focusing on the family and what keeps family members from playing together. The console and controller were designed to make it feel familiar and simple. Nintendo passed on more hard-core designs along the way and have been called crazy by more than a few. Though many will try to take a swipe to get at some of the audience being created by the Wii, any thoughts of it being easy to steal the audience by simply calling something 'family' need to take a better look at the families buying the Wii and the reasons they are buying it.

Kids are a great part of family, and indeed, to meet the definition of family, you need kids. However, forgetting to include the adults while going after the kids doesn't give you any more of a family than you had when you were just going after the adults.

September NPD Predictions

With US (and it's just US let's not forget that) console sales numbers (estimations) about ready to come in, I thought it might be fun to take a look at what the numbers might be this month. Will the Xbox 360 outsell the PS2 for the second time this year? (that would be the 3rd time ever!) How will Halo change things? Did the PSP slim release affect sales?

Here are Michael Patcher's numbers: (who is quite a sport)
Xbox 360 - 450,000
DS - 430,000
Wii - 425,000
PSP - 252,000
PS2 - 220,000
PS3 - 150,000
GBA - 65,000

And a couple of guiding principles:
1 - Sales are usually higher in September than August as Holiday releases begin to occur
2 - Pre-Halo 3 I predicted Xbox 360 numbers at 360k (so despite now knowing the Halo 3 sales numbers I should probably stick with the old prediction, though if I were to change it, 420k sounds about right)

My guesses (Red means my number is lower, green is higher, Black is =)
Xbox 360 - 360,000
DS - 441,000
Wii - 394,000
PSP - 225,000
PS2 - 232,000
PS3 - 150,000
GBA - 70,000

Stories to watch for:
1 - Does the 360 outsell the Wii. With Halo 3, the flagship 360 title out in September, if the 360 doesn't outsell the Wii it would paint an interesting picture.

2 - Does Metroid Prime 3 sell? It was released late in August to rave reviews and pretty 'meh' sales. Perhaps it was just poorly marketed, but it is a good enough title that the mainstream gamers should be picking it up. If it isn't selling, what does it mean to the lifetime of the Wii?

3 - How many of the top 10 games are PS2 games? In August 3 of the top 10 were PS2, 1 was PS2, 2 were Xbox 360 and 4 were Wii.

4 - Will EA solve the Wii 3rd party riddle? Boogie sales were tepid, Madden were disappointing and though the Wii version of Tiger Woods outsold all other versions in the UK, it was a mere afterthought in the US. Will MySims fare better? Will the long term sales of any of the other titles make up for their poor launches?

5 - What happened to handheld gaming? Though the hardware is outselling the consoles, the games, outside of Pokemon, aren't doing much in the charts. Will Zelda's October 1 release put handheld games back on the charts?

6 - Will Guitar Hero just keep on dominating?

7 - Will Heavenly Sword drive console sales?

The Casual Threat!

With the continued success of the Casual market on the PC and the Wii thoroughly dominating console sales, the casual movement, once thought to be a nice side business, is starting to feel like a Threat to many gamers. (with a capital 'T')

What is a threat? It is the expectation of future trouble.

When gamers first started playing casual games, their numbers were few. However, as the money and audience has increased, the number of developers has also increased, often inplace of core games. The core audience has carefully eyed the casual audience's growth and the Wii becoming popular with a bit more contempt of late.

As the success of the Wii has turned the core audience from a majority into a minority, it has become the new whipping boy of the old core gamer. You can see it often in the media with even developers like Dave Perry jumping on with somewhat illogical arguments to try and fight back against what they see as taking away from their favorite pass-time.

The mainstream attack on the Wii parallels a longer attack that has happened in the PC space. Especially among the Indie crowd, which was formerly the shareware crowd, which formerly was the main money driving source in the PC gaming space.

As casual has become the key downloadable games market, Indie developers have gone to great lengths to decry the market as simplistic and pointless. A general sense of 'dumbing' down consumers and making games that don't challenge and perhaps aren't even games has become the outlook on the casual games sector.

It's kind of like an avid outdoorsman, who hikes deep into the mountains to more fully appreciate nature's beauty. In his mind, those who stop at the side of a road and take in a vista from their car are really missing out. The highway and national park system are dumbing down the experience, keeping people from what's good, and bringing in people he can't relate with to nature areas once only enjoyed by the like-minded few.

What's important to remember is that there are lots of different consumers who want different things. ...and that's a good thing.

When you go to sell your product the goal is the most sales, which means you need more people looking at it. To that end, if you are both a gamer and a businessman there is a lot of good that can from letting go of your personal aprehensions and embracing the casual group to ensure that your product is seen by the largest number of people possible. After all, you never know when someone staring out of their car window at a beautiful vista will decide to get out and walk to the other side. However, if you let your personal game tastes keep you from places, like the casual portals, when a casual gamer starting looking for something more, it will be much more difficult for them to find you.

The Casual Division

There is a strange division currently in casual games, that continually mystifies me. Answer the following questions for yourself. [I added my 'answers' in ()]

What is EA's most valuable casual property?
(You could make an argument for Pogo, though it's probably the Sims)

Who are Pogo and the Sims targeted at?
(I'd say they have the same audience, casual gamers)

Can you buy the Sims on Pogo.com?
(no)

An ever lingering question in my head is 'Why Not?'

One of the most interesting things about the new casual games industry is the disconnect it has with the mainstream game industry. There are many games that were previously released at retail that I'm convinced would sell really well to the audience that the casual game portals have assembled. Games like the Sims and Roller Coaster Tycoon.

However, when you go to Pogo.com, there is no mention of the Sims. In fact EA has the Sims in its own separate division. The original Sims is not available even from EA as a downloadable product. Roller Coaster Tycoon fairs a little better. It is available through one portal: Real Arcade. However that is the only portal through which it is availble.

The division between two kinds of casual, those that are popular on the PC at retail and those that are popular on the game portals is one of the most curious things in the gaming business. A good rule of thumb is to always distribute your games everywhere you can. That will help you to maximize your revenue.

The division probably has something to do with the roots of casual games, which was a counter movement to retail. Still, with so many hot properties, from the old Humongous Entertainment games like Freddi Fish, to current popular TV shows like Dora, and even to those silly Big Game Hunter games, the time will come that the 'casual' games that have sold well in retail stores will join those that have sold well online. When that happens, I think you'll see another big expansion in the audience that the portals take in.

Why isn't it happening? Especially when some of the companies involved, like EA, simply need to get their right hand to talk to their left?
There is a large list of guesses why that is so. Some of it is the amount of difficulty that arises in getting something done in a HUGE company and some of it is the mainstream industry's perception of casual games. (mainstream still sees casual games as the place where formerly good execs are sent after they've outlived their usefulness)

As casual games continue to increase their profit, they are becoming less and less the red-headed step-child of the games industry, which should lead to some very interesting changes in the online portals (and big increases in their audience). It's going to happen as soon as publishers realize how much money they can make off of their old back catalogue. It's going to happen as they discover a new market for old games like SimCity 2000 and Theme Hospital. The only question is: when?

How to achieve Casual Games Revenue Growth?

Gamasutra published an opinion piece today that talked around the same topic as the article yesterday, but with a different approach to making more money per user. This article focused on making more money per game with a nice slant to helping spread around more money to more developers.

The suggestions on possible areas for attack are:
1 - In-Game Ads
2 - Using social networks to directly connect with gamers
3 - Increasing the price of games
4 - Combining Approaches

I think 4 is always the winner, but am also a strong believer in doing something all the way or not at all. Combining approaches by partially doing each of the other options isn't likely to return the wanted results.

Some thoughts on each:
In-Game Ads
- This is certainly something that is becoming more popular as the early results reported back by Real and other companies shows that it can be quite a solid money maker. Reflexive is currently getting ready to launch one of our games on another portal in the ad-supported approach. We are excited to see the results.

A possible concern with in-game ads is changing the industry format. Instead of trying to convince the customer to purchase the game, games with in-game ads need to maximize advertiser dollars and please the advertiser. That shift to a different customer and approach is a little worrisome. Certainly there are some games, like Bejeweled that work well with breaks in the play in-between levels. For other games, like Virtual Villagers, the breaks may not be as natural and may feel forced. The focus on trying to get a customer to use an ad is also a a bit worrisome. To quote the article:

It wouldn’t be surprising if in-game ads soon become integral to the content of a game, offering clues, extra levels or other hidden rewards for the player who clicks through.

I worry that focusing on the advertiser as the customer, instead of the gamer as the customer could lead to a less enjoyable experience for the gamer. Certainly it is something that will need to be carefully watched and balanced as advertising becomes more prevalent in games. The current approach of making older games ad-based while keeping newer games ad-free I think is a good approach that maximizes revenue from both sides of the chain.

Social Networking/Helping Viral marketing along
In this article the social networking was tied back to a platform being sold by the author that helped to connect gamers and developers. The end-goal is to remove the middleman while maximizing sales. I think using communities to help sell games is definitely a good thing to do. Whenever you have someone who enjoys your game or business you should encourage them to be an evangelist. Your biggest fans can speak about you in persuasive ways that few others can and should be rewarded for their efforts to keep them going. It's certainly one of many methods that should be employed to increase the market-size for any business you do. It's worth stopping what you are doing right now and considering how you can easily help your fans talk about you. Can you give them a copy and paste signature for the forums they visit? Is there a widget they can plug into their CMS? Can they easily email friends about your product? (do they get something for having done so?)

Increasing the Price of Games
This is an interesting suggestion. From all the studies done, increasing prices does not seem to improve revenue. However, from your economics class you probably remember that there are different points on the sales and demand curve that produce different amounts of profit. Many of the subscription programs offered are set to maximize the access to markets who will pay varying amounts for a game. I don't know that raising the price is a good idea. However, I think offering a game at different prices is a great idea. Subscription programs are one way to do this, but it would also be interesting to offer Platinum versions of a game that have additional content. Unfortunately none of the portals are currently set-up to offer multiple versions of the same game, but with the practice succeeding on retail games it seems only a matter of time before something along the same lines is attempted in the casual sector.

Certainly some interesting thoughts and it is clear that many people are wrapping their head around the same problem, which is how to get more money out of their product. With an increasing number of casual games coming out, it is very possible (I'd say likely) that the games are increasing faster than the market is growing. That leaves us in a situation where newer games make less money than games 'used to make' even in a rapidly expanding marketplace. In such a situation, there are many approaches to try and maximize the money from any one title, and I am in total agreement with the author that a variety of methods should be tried.