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- Innovation: Distribution,
Content, Or Both?
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- January 19,
2009
- By Eric M. Scharf
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- While you can certainly expect X
number of companies to attempt to take advantage of the concept of
"distribution innovation over content innovation (DOC)" by
converting it into absolute fact (in their own minds), and, in turn,
investing less towards innovation, no one should be getting truly
unnerved by an idea-and-product-strategy that has been around for
eons.
Historically-and-traditionally, when a product is as good as, or
better than, the similar products before it, in general, consumers
notice it, consumers like it, consumers want it, and consumers who
can afford it attempt to purchase it. A forward-thinking
distribution system is necessary to (A) reach as many consumers as
possible during its initial availability of that product, and (B) to
funnel as many accessories to that product to those consumers as
often as possible (but, ideally, without oversaturation of the
market place with too much of your own product, not to mention those
of your competitors who, from time to time, copy your every move).
As an obvious-and-brief aside, if you work for-or-with a cookie
cutter game developer / publisher, you should naturally expect less
innovation of truly great, earth-shattering products and more
aggressive leveraging of average-but-good-selling products. If
you, as an innovator, choose to associate with this kind of company,
their practice of distribution-first-and-content-second does not
qualify as a cruel reality; just an employment decision you have
made.
Nonetheless, objectively speaking, while game development
innovators may squirm at hearing of anything that might diminish
concentration on content innovation, the true negatively affected
group, over time, will be Game Stop, Best Buy, and the like. If product distribution was controlled by the Federal government,
you better bet your sweet bippy these store-shelf entities would be
"jetting" their lobbyists up to Capitol Hill to piss vinegar all
over the bailout hearings and demand reparations for the deeper
sales damages that will be forced upon them once EA, Activision-Blizzard,
UbiSoft, and others decide to make Steam (or a Steam equivalent) the
permanent virtual home-and-mechanism for their future product
distribution and sales.
One of the key elements driving DOC to the forefront is that of
product usage time. All of this innovative game development
effort is sold to a consumer who, according to focus group testing,
is expected to collectively max out at between 4 and 12 hours of gameplay time with a product on which they spent $30-$60.
Enhancing and further leveraging distribution processes for
entertainment software (applicable to almost all industries, to be
fair) is a must if you wish to return to the time of games providing
weeks of enjoyment rather than days. Yes, such a time did
exist. And, while more content creation would help ease this
problem, it would create another problem in its place. More
content creation requires more time, resources, money . . . and,
fundamentally, more gameplay design to support the additional
content.
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- Yes, you can outsource until you are blue in the
face, and, then, you can also absorb the further expenditure of
making the resultant asset deliveries match your
internally-generated assets in visual and functional quality (as
everyone interprets assignments / instructions differently,
especially in a remote setting). Compounding this scenario is
the concept that AAA projects, which now take 2 and 3 years to
complete, would potentially be pushed out to unreasonable 4 and 5
year production cycles.
Games are an extension of toys, not movies, and the legitimate,
easily-accessible-to-the-mainstream-consumer merger between the two
mediums is, at the very least, decades off. The investment
money being spent on true big-budget AAA games is, contrary to
popular belief, not a drop in the bucket if consumers are either (1)
not using your product more than once before trading it into Game
Stop for store credit or (2) not purchasing multiple copies of your
product (and, in this scenario, all possible consumers are
purchasing multiple copies).
As an important aside (that affects profit as much or more than
innovation in content or distribution), certain re-occurring or
franchise AAA game products, over the last 2-3 years, have proven
capable of outselling their blockbuster movie counterparts (for
almost every $10 movie ticket sold, one $30-60 video game would be
sold). And while the film industry acknowledged almost a
century ago that it could not validate the expense of full-time
movie crews that sat idle, per say, in-between film productions, the
cyclical games industry has yet to naturally follow suit on this
concept, even though the games industry work force has been made as
disposable as any other.
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- Two potential options moving forward,
beyond but not prevented by enhanced product distribution methods,
seem somewhat logical at this juncture: (1) the games industry could
be making so much more profit (and dedicating significantly less to
production budgets) if it only needed to support its work force on a
contract basis (with contract costs higher but with overall costs
significantly lower without the expensive full-time employment
benefits, which would inevitably result in some form of industry
unionization, specifically out of a mutual desire to avoid mercenary
negotiations), or (2) the games industry could revolutionize its
significantly outdated system of long-term planning and resource
management to help ensure much greater stability for the work force
and their respective studios (as “overhead” never truly hurt anyone
who properly planned for overhead).
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- The potential side effect
to work force stability would be a massive slow down in work force
growth, as people would be encouraged to remain in their jobs for
much longer than is currently witnessed. While video games, by
their very nature, require certain resources to be full-time for
maintenance and upgrade purposes, these resources can still be
signed to full-time contracts, thus, again, avoiding expensive
benefits.
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- The happy compromise to the options listed above involves
outsourcing, specific to large-scale, multi-asset deliveries
received from equally large-scale outsource teams (and, where,
conversely, one or two person outsource operations have been
successfully utilized for eons and continue to be far more
manageable). Nonetheless, large-scale outsourcing continues
to have its own natural-and-potential snafus (regarding 1 - language
and location barriers, 2 - providing and following directions
properly, 3
- delivering assets at the required technical and visual quality
levels, 4 - as well as within the required visual style, and 5 -
absorption of cost overruns associated with predominantly
company-side-corrections to poorly-completed outsource deliveries .
. . because, objectively, if the results are poor, and pre-scheduled time is of
the essence, then, the in-house staff is potentially forced
to choose the lesser of two evils by performing the
corrective tasks themselves and knowingly straining their internal schedule
rather than risk
a second round of poor outsource returns).
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- How often do large-scale outsource
operations turn in poor performances? More than you might think but less than what would make
outsourcing prohibitive, whether your resources are local-area or
overseas. You simply cannot take for granted the idea that
someone, either in-house or remote, will comprehend your
instructions perfectly the first time, and with so many outsource
operations willing to do anything to get-and-keep your business, it
is incumbent upon you to provide the most specific directions
possible. So, with respect, the ever-popular production
value comparisons between games and movies should be shelved until
this automotive-industry-style identity crisis for the games
industry has been resolved, regardless of innovations to either content
or distribution.
In any event, can such a laser-focus on the expansion of a game's
usefulness-past-first-run-sales (rather than on developing entirely
new experiences) create problems for those who want content innovation over
all else? Potentially, and, that, unfortunately, is simply
going to require a wait-and-see attitude, presumably by the work
force.
Some people (possibly management types and market analysts) will be
intrigued to see which companies decide to pursue a nice, even
balance between (1) innovation in their products and (2) an
extension of the shelf life of those products.
Other people (possibly work force and some impatient analysts) will
be screaming bloody murder for all game publishers / developers to
sign a document explaining their future intentions: "What are
your intentions with my daughter, errrr, uhm, my game development
career? Are you playing games with my game development
career?"
Products that make you go "oooooh" and "ahhhhhh" are
certainly-and-ideally what everyone wants, but, in order to get a
decent-to-great return on your investment dollars for those
products, you need to have a distribution mechanism in place to
spread those good vibrations to the farthest reaches of the consumer
spending galaxy.
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- Today's $20 million dollar AAA budget (yes,
including marketing monies) may be tomorrow's $50 million dollar AAA
budget, but everything is relative, and, typically, proportional
when scaling up or down. Thus, outside of independently
wealthy game developers who can do what they want when they want,
there will continue to be a very necessary balance between
innovation-of-great, leveraging-of-average-to-great, and a little
bit of both.
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