Marketing Idea No. 244 – The insanely awesome and lucrative world of video gaming

On November 8, a new game of Activision (the gaming giant), called “Call of Duty: Modern Warfare 3” set a record of earning $750 million in its first five days of launch; making it the most successful launch of an entertainment product ever. Its unthinkable for some that the biggest money-making launch ever in entertainment industry is not a movie or a book; but a video game! Comparing it to Harry Potter and the Deathly Hallows Part 2 (which is the record breaking and most succesful movie launch of all time); the Harry Potter film earned only $169 million in its first weekend. Compare $750 million vs $169 million – and you can see who is clearly winning the war.

In the past two decades video gaming industry has off-loaded its small industry status and emerged as a $56 billion dollar industry. It has crossed newspaper, magazine and music in order to become the second biggest entertainment business; behind only movie. Now the movie numbers are inflated because it includes the DVD sales; which is driving the growth in film business. But even then, in a very short time video game industry has become three-fifth in size to the film industry and quickly closing that gap.

A lot has changed in gaming industry and the biggest strength of gaming industry is that unlike the other industries (Newspaper, music etc.) gaming industry embraced those changes and actually thrived on them. Going back, two launches probably shaped the industry future more than anything. One is the launch of Sony Playstation back in 1994 which made video gaming an extremely adult affair and no longer a matter of kids and nerds. The second would be the launch of Nintendo Wii which made video gaming popular among women also. Amazingly, the average age of gamers are now over 35 and a significant percentage of them are women (to some extent biased number due to mobile games like Angry Birds which is very popular among women). With these two mega events behind, the majority of growth in video gaming is coming either from online games like Farmville and World of Warcraft. Or they are coming from mobile games like Angry Birds, made by a finnish company called Rovio who houses only 55 employees. In a way, online and mobile is the future of gaming. Although gaming industry is still earning most of its money from selling console based games, the growth in future is coming from online and mobile.

The lesson to learn for modern marketer: Embrace change or get hammered by it. Also, the video gaming industry is an excellent example of staying one step ahead of consumer trends, cooking up awesome innovations, adjusting to the rapid pace of technology and preference and ensuring cool execution putting consumer at the center of everything.

Marketing Idea No. 243 – Digital revolution and the end of everything in black and white

Is on-line the end of off-line? When we see legendary book stores like “Borders” closing and virtual stores like Amazon soaring to new heights, people can make this false assumption.

Just like Internet was never the end of Television as a medium, online is not the end of off-line. In fact, the future is a sort of hybrid, a mutually beneficial and dependent co-existence at times. In that future, online firms will complement their online existence through off-line activities. And ofcourse, brick and mortar firms will go virtual to open up a new source of targetting customers.

A classic example would be how E-Bay is using off-site pop up stores/acts to drive traffic to its website.

An interesting phenomenon about online firms is the difficulty in categorizing them. A few years ago Amazon was an online book store, Apple was a computer maker, and Google was a search Engine. But Amazon is now into tablet manufacturing and content providing. Apple if at the forefront of defining digital revolution through i tunes, i pod, i phone and i pad. And Google is an omnipresent force in handsets, cloud computing, music store and software development.

This tells us that the classic way of defining boundaries for businesses no longer apply. Even more importantly, you cant really categorize who is your competition and who is not in a black and white manner anymore.

Marketing Idea No. 242 – Angry Birds, Where’s My Water and reverse merchandising

The tried and tested merchandising game worked in a differemt way before. You make a fantstic animated film, develop a like-able character, market it till you drop and with soaring popularity go for merchandising to bring in the big money. The Buzz Lightyear is a great example of that. So the entire line extension and licensing game started with movies and ended with merchandising, tv show, games etc.

But the process that Pixar and then Disney crafted to perfection has reached a snag. The problem with this is the risk associated with it. It takes millions of dollars to make and market a movie with no guarantee that it will succeed. On the other hand it takes a few thousand dollars to create a fantastic mobile game/app with a like-able character. So its a better bet to create a mobile game based character, make to so addictive and popular that it creates a huge fan base and then make a movie which will be sure sell among the fan base and beyond. This is a better way of going. And the trend is catching on. Rovio, with its extremely popular Angry Birds game is following this reverse trend. The new game from Disney (Where’s my Water?) starring a love-able googly eye aligator called “Swampy” is already creating a huge fan base. The next logical step would be TV shows and movie. So the creator of the trend itself (Disney) has reversing the trend. Thats what is called staying ahead of the game. Kudos to Disney.