Wednesday, 24 November 2010

Is Amazon’s black Friday a moment of genius or a massive con?

Black Friday is an American import which signals the start of the Christmas shopping period. It is called black Friday as it’s the day when companies go from in the red to into the black in terms of their balance sheets. This American tradition has brought its way to the UK this year with Amazon’s black Friday. This week long sales promotion boasts sales of up to 70% off certain items and with Nintendo Wii’s selling for £50 there has been a huge buzz around the sale.

The way it works is Amazon display’s on average three products an hour. After the timer gets to zero consumers are allowed to add the product to the cart, the picture below helps illustrate this:

The consumer does not know the discount of every product so when the timer reaches zero there is a massive rush to buy. Amazon have been very clever with this concept as they have made it somewhat of a game. If a person ‘wins’ a product they feel a sense of achievement and are encouraged to keep on looking and more importantly buying these deals.

The whole premise of Amazon’s black Friday deals are that they are offering huge discounts. On Friday the 19th of November various newspapers promoted the fact that on Monday at 9am 'Take That' and 'Susan Boyle’s' album would be selling for only £1. Needless to say these products sold out in a matter of seconds however with deals that good surely every product will have those discounts? Well no, many of the products on sale don’t have great discounts. In fact Amazon raised the price of a few products a month before the sales went ahead so that they can be seen to offer a greater discount when they sell it on black Friday week. Furthermore, the discounts are against the RRP take into account that many online retailers sell well below the RRP to gain a competitive advantage, the discounts don’t sound so good. This hasn’t stopped consumers buying these products though, the buzz of getting that product when the timer ticks down to zero is highly addictive, Amazon have got this sales promotion spot on.

Another thing to mention is that Amazon have discounted various products across the site which are not of limited quantity or time restricted. People will spend hours on the amazon website this week due to the promotions and media buzz around this event. With more and more individuals Christmas shopping online Amazon are making sure that they can entice customers to shop with them this Christmas as they are seen to offer the best discounts.

It’s the usual trick of offering a few products at loss making prices to create buzz to hook people in. Expect Amazon to do this every year from now on and for other websites to follow suit. Black Friday could be a new phrase we hear every year on the run up to Christmas.

James Foti

Thursday, 4 November 2010

Kinect's Huge Marketing Push

Microsoft as predicted are really pushing sales of Kinect this Christmas. As the hardware is released this week you will see numerous ads on Tv, Magazines and Billboards not to mention online ads such as the one seen on youtube right now.

The added touch of having the product shown and endorsed by the likes of Oprah and Ellen Degeneres will have worked wonders in getting those 'soccer mums' to buy the Kinect. This bring me onto the playstation Move, Sony are definitely targeting this product to the hardcore more than the casual now. Their marketing budget wasn't nearly enough to stop Kinect this Christmas. This doesn't mean the move wont be profitable, the sophisticated hardware is likely to prove popular with the hardcore but don't expect the same level of success as the Kinect.

Thursday, 12 August 2010

How do you fix a problem like video game piracy?

Video game piracy is a beast that the industry just cannot tame. Many different techniques have been implemented to try and tackle this problem yet none seem to work. With pirated video games becoming more easily accessible by the day, it poses a massive hurdle for the industry and one that the industry is determined to crack. This article aims to examine the ways in which the video game industry tries to combat piracy and to see if those methods are effective.

The main thing that Video game publishers and developers must realise is that in their attempts to combat piracy they must punish the pirate without punishing the consumer. Many companies incorporated anti-piracy software onto the’ install disks’. Consumers were getting the sense that they were being punished for the actions of the pirates . EA games tried to do this with the game ‘Spore’, they added DRM software onto the disk. It backfired and the game went on to be one of the most pirated games ever. It turned out that pirates could bypass this software protection while consumers were forced to live with it. Publishers therefore must reward the consumer for purchasing the game.This can be done in many ways. They could offer money off the sequel of that game when it comes out, offer free downloadable content or offer free merchandise with every order. One of the main reasons for piracy is that people demand more for their money. More and more games are being released every year and the consumer only has a certain amount of money available to spend on video games. By offering a better value proposition the consumer is more likely to purchase the game rather than pirate the software. Punishing the pirates can be done through numerous ways but the traditional way of fining the odd pirate just does not work. Video games must play to their strengths; just recently EA games unveiled ‘Online pass’ which allows the consumer to enter a code to access the online play, a code is given to anybody who buys a new copy of the game. The importance of this is that people who pirate games will not be able to use one of the most important features in today’s games, online play. Of course people could still pirate these games and use the online feature by only paying $10 to acquire a code; this will allow publishers to get extra income from pirates who would not consider paying for any part of the game. As another bonus EA games will receive extra income from the used games market. Other publishers such as Activision must take note:, Call of Duty is famous for its online experience. If the consumer can utilise this same method you will see people purchasing the game rather than pirating it so that they can play online.
Another way to combat piracy is to simply make a good quality game with increased longevity. As stated earlier, consumers will not see the value of paying full price for a game that might be great but only lasts 10-12 hours. By making a game of good quality and longevity the consumers are going to see better value and will be more likely to buy the game. If individual’s were to evaluate a video game and realise it was not worth their money they are more likely to pirate the game instead of before when they would not buy it and consequently never play it, this is due to the convenience and easiness of pirating in modern times.

 Another point to consider for developers is which type of hardware they should develop for. The Sony Playsation 3 is notoriously hard to crack and therefore pirated games can’t be used on that system. On the other hand, the Xbox 360 and the Wii can be cracked by any individual who has access to the internet and a decent guide on how to crack the system. The PC needs no cracking at all and has become the pirate’s choice when choosing to pirate a game. Developers should work with these hardware companies to make sure that they are hard to crack or they could look at just developing solely on the playstation 3 as long as this trade off is a viable one.

The final point that could help combat piracy is by becoming a publisher or developer that listens to the community. By having a community that respects the organisation the chances are, it is  more likely to buy the game and discourage piracy. Companies can do this is by regularly communicating with people on forums, listening to their key consumers and offering incentives. These incentives could be  access to Beta’s or money off codes for being a member of the organisation’s forums or websites. More people will pirate a game if they feel the developer or publisher disregard the consumer’s desires or neglect them altogether. The developer’s ability to keep connected with their key audience is a very powerful tool and should be considered by publishers who have a poor relationship with their consumers. The knock on effect could lead to greater sales and thus profit margins. If all else fails developer’s 2D boy allowed consumers to name their price when purchasing ‘World of Goo. Although a lot of people chose to pay one penny for the game it was still a huge success. It could be said that would be pirates who had a chance to pay what they liked for the game would do so instead of pirating it.

In conclusion, there really is no sure fire way of stopping piracy. The old method of fining people randomly for downloading Illegal software is outdated and does not work. Publishers have to be creative and think outside the box, with people having less disposable income more and more will turn to piracy as a way of fulfilling their gaming desires. By using some of the methods stated in this article developers and publishers could start to see piracy for their game falling and their profits rising.

James Foti
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Sunday, 1 August 2010

New Article Title

Work has begun on my new article called: How do you combat a problem like video game piracy.
It should be done before the end of the week.

Tuesday, 20 July 2010

Introduction and my next article.

Hi everyone, my name is James and I am currently studying Marketing in Lancaster University. I consider my area of expertise in the video game market however, I am also very interested in innovation within marketing. Anyway, I am already planning my next article which is about how publishers and developers can combat piracy in new and innovative ways. Watch this space.

Monday, 19 July 2010

Is Microsoft's Kinect strategy hit or miss?

The Video games market is currently expanding into many different segments thanks to the Nintendo Wii, no longer is gaming targeted towards the 13-40 Male consumer. There is the 60+ elderly market who love to get active by playing Wii bowling or the 30-50 range that are losing weight by using Nintendo Peripheral’s such as Wii fit. Both Sony and Microsoft must applaud Nintendo for expanding a previously narrow market.  With Nintendo monopolising these market segments Microsoft and Sony have been quick to react. Microsoft is introducing a camera that can track your body movements without the need to hold anything in your hand whilst Sony are going down a similar path to Nintendo by offering motion controllers. So what’s the deal with ‘Kinect’? Who is it targeted at? And how on earth will they provide competition to the extremely popular Nintendo Wii? This article will aim to answer these questions.

There is no doubt that Microsoft are after the casual market. This newly developed market has massive potential and is worth millions to Microsoft. Microsoft revealed the Kinect brand at E3 this year and for the first time ever it was broadcast in Times Square for everyone to see. Furthermore, they commissioned a show by the exquisite Cirque du Soleil to show of Kinect which was also broadcasted on MTV. These communication channels are not commonly used in the video game industry to show of new hardware. By broadcasting their E3 press conference live via time square it indicates that they want Kinect to entice the casual gamer into the Xbox experience.  However, is this the  right group to target? The marketing manager of Xbox recently said “I think we know that hardcore gamers will be the first to go out and buy it, as they are with any product”. This statement underlines their intentions to push Kinect onto the hardcore gamer but the thing is none of the software for Kinect will appeal to them. Casual games such as Kinect sports or Kinectimals will never a system seller for the hardcore gamer. In fact until Microsoft release a Kinect game that the hardcore can get excited about then the chances are they will hold off the purchase. Microsoft built its brand on offering a hardcore experience and it might be unwise to neglect them.

The pricing of Kinect has become a hot talking point in recent weeks. Although not confirmed it has been widely regarded that the price of Kinect will be around $150. Compared to the Nintendo Wii ($180) the value of Kinect could seem very poor. Why would the consumer who currently owns a Nintendo Wii part with a significant amount of money to purchase a peripheral that is essentially a very similar product? Microsoft needs to create a value proposition that warrants the $150 price tag and controller free gaming could be the answer. The unique selling point of Kinect is the fact that they offer a way of interacting with a game without the need to hold anything in your hands, this is something Nintendo Wii and playstation move don’t offer. Microsoft must therefore highlight this advantage when advertising this piece of hardware.  In fact by looking at Microsoft’s marketing strategy you could see why they are charging $150. They have to penetrate the market and get the casual market to take notice of this new product. Microsoft have already spent a huge amount on marketing Kinect through the Cirque du Soleil show and by displaying Kinect in various Macy stores. Make no doubt about it, they paid through the nose to do so. Marketing of Kinect is set to increase as they creep towards the release date and therefore costs will increase. Microsoft will aim to recuperate this cost and therefore will set the price as high as $150 however it is doubtful that they will make a profit on every unit sold as according to ‘Develop’ it is costing Microsoft $150 to manufacture the Kinect camera.

The casual market is here to stay and its going to grow and grow. Microsoft are entering a market in which they are determined to gain significant market share, they are in this for the long term. Kinect is just the beginning for Microsoft. It is expected to be bundled with the Xbox slim when it launches in order for Microsoft to get Kinect into homes across the world. Microsoft will initially want to focus on market share rather than profit so expect Kinect’s price to decrease and decrease quickly. Kinect or maybe an upgraded version will be bundled into the next generation of Xbox console because this will force the consumer to use it.  Consumers are more likely to see the value of Kinect and therefore use it if it becomes bundled in with the console rather than just on its own. Microsoft have a massive opportunity with Kinect and if sales are slow in the first year don’t expect Microsoft to drop Kinect. It is here to stay and if they do it right it could become a huge success just like the Nintendo Wii. Microsoft’s core customer is the hardcore gamer and they should not ignore them. Nintendo have currently realised their mistake of neglecting their hardcore consumer and rectified the issue by announcing numerous hardcore friendly titles. If Microsoft can maintain that balance then they could satisfy the hardcore whilst becoming a big player in the  lucrative casual market.

James Foti.
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