Marketing Guru Al Ries Predicts the Next Big Thing in Videogames
David Thomas, Crispy Gamer
Marketing guru, author and chairman of
I like Al because he puts his mouth where other people put their money. And in 2001, he made a bold prediction in an interview I did with him: The Nintendo GameCube and the Xbox would flounder, and the PlayStation 2 would dominate the gaming market.
These days, that's old news. But at the time, it was a prophecy no one wanted to utter. And the angry emails I got from
About games? Pretty much what he reads in the papers and sees on the store shelves. About marketing? A lot. And he didn't need tea leaves to tell that
In his new book with daughter
But things keep changing, and to help get a handle on the next big thing in gaming -- Advanced motion controls? The PlayStation 4? A World of Warcraft killer? Digital distribution? Apple? -- I asked Ries to dust off the crystal ball and talk about the future of the game business.
What's next? Here's his analysis:
Crispy Gamer: The videogame industry feels like it is approaching a big transition. The three consoles are reaching their peaks, online distribution of games looks to change how games are bought and sold, the newness of the Wii's motion control is wearing off, and new competitors -- like the iPhone and even talk of Apple entering the console market -- raise a lot of questions as to "What is next?" What general thoughts do you have about how the game market has developed and where it is likely to go next?
Broadly speaking, today there are three videogame markets: 1) The serious, heavy-duty market represented by PlayStation and Xbox; 2) The broader consumer market represented by Wii; and 3) The portable market represented by iPhone and dozens of similar devices.
Today, the videogame market is in a trough, waiting for the next revolutionary development. What that might be, I have no idea. But my feeling is that there is intense pressure on
The portable market is driven by novelty. There are going to be many, many different types of games, all sold at low prices and delivered online.
If the iPod held a thousand songs in your pocket, the portable videogame market is headed that way. A thousand games in your pocket.
Crispy Gamer: In your books, you suggest that brand leaders are usually focused on a narrow category easy for the consumer to keep in mind. How are the big three console makers stacking up?
Crispy Gamer: OK, looking at
Ries: New and different, rather than "better." Both companies made strategic errors with PlayStation 3 and Xbox 360. They focused on "bigger, better" while
Different always wins.
They should both start with a clean sheet of paper and say, "How can we design a videogame system that is so unique and different that it will capture the attention of gamers everywhere?"
Crispy Gamer: The Wii won big with its innovation around the motion control. Now
Ries: You can't make a conclusive argument that an advanced motion-detecting device won't work for
On the other hand, that's a difficult strategy to undertake.
The 2-ounce "energy shot" pioneered by a brand called Five-Hour Energy is perceived by the consumer as a different category than the 8.3-ounce "energy drink" pioneered by
Crispy Gamer: What new brand category do you think has the most promise in videogames? Portable gaming? New ideas (like the Wii)? Digital distribution? Online games such as World of Warcraft? Or something else?
Ries: Ah, that's the rub. It's easy to see that the winner is going to be new and different, but it's extremely difficult to figure out what that should be. I don't think anyone ever predicted that a motion-detecting wand might form the basis of a totally different videogame. That was a stroke of genius.
In general, however, I would say that your best chance for success is a new idea like Wii.
As far as digital distribution and online games are concerned, they are probably going to get more important. But these are not breakthrough ideas, and the videogame industry is ready for the next breakthrough. I can't wait to see what it might be.
Crispy Gamer: What does the videogame industry need to do to grow the current brand categories? As many people that play games now, there are still many more that don't!
Ries: Every industry reaches a point of saturation. The beer industry would really like more people to drink beer. But you know what? In the past 40 years, the percentage of heavy beer drinkers has remained remarkably consistent.
My feeling is that the videogame industry is like the beer industry. The percentage of heavy gamers is probably going to remain pretty constant. That's why you have to attract their attention and their money with new and unique videogame concepts.
It's what the beer industry did with microbrew, (Samuel Adams), Mexican (Corona), lime (Bud Light Lime), white beer (Blue Moon), etc. Are more people drinking beer? No, but the companies that introduced new beer concepts are certainly benefiting from their innovations.
Crispy Gamer: What are the biggest threats to the ongoing health of the videogame business?
Ries: I don't know, but the threats will come from the outside. Midnight basketball?
When I was a kid, every kid I knew spent their entire free time outside playing some sort of sport. Baseball, basketball, football, you name it. Now most of the kids are instead watching television or playing with their Nintendo DS.
It might be nice if someone could invite an exciting concept that took place outdoors and included a great amount of physical exercise. I thought go-kart racing might take off, but it never did. (I used to own one and it was more fun than anything I ever did, except the state of
Crispy Gamer: If Apple really wants to play in the games business, how should it go about it?
Ries: Maybe an iGames replica of iTunes. Stock and sell a vast array of unique and unusual games for a fixed price. (A low fixed price.)
Crispy Gamer: Finally, based on what you can see, who do you see winning in the market as the Wii, PlayStation 3 and Xbox 360 start to transition out?
Ries: I see the three brands drifting along with little changes in their existing market shares. We'll wait for the next round to take place.
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Video Games: Marketing Guru Al Ries Predicts the Next Big Thing in Videogames
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