In the Entertainment Software Association's 2008 report...
Audience Sample:
1,200 nationally representative households identified as owning either or both a video game console or a personal computer used to run entertainment software
Notable Stats:
- 65% of American households play computer or video games
- 35 is the average game player age
- 26% of gamers were over the age of 50 (in 2008)
- 13 years is the average number of years adult gamers have been playing computer or video games
Best Selling Video Game Genres, 2007:
- 22.3% Action
- 17.6% Family entertainment
- 14.1% Sports
- 12.1% Shooter
Best Selling Computer Game Genres, 2007:
- 33.9% Strategy
- 18.8% Role-playing
- 14.3% Family entertainment
- 11.6% Shooter
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So, how is this relevant to marketing? CRM strategy is one aspect that comes to mind. It is a marketer's ability to define, track, and market to specific demographic sets of customers who frequently buy certain game genres. Customer relationship management, CRM, is more than just a collection of people who bought your products and services at some point. A few challenges exist for anyone entering or playing in this industry:
- to create a substantial revenue stream of recurrent purchases from new or existing customers
- to maximize ad and marketing spends in the promotion of sales
- to anticipate what customers want to play next based on purchase behavior
A good CRM system helps marketers keep the customers populations in the right buckets, and by doing so, we're able to direct appropriate messaging and content to those customers. Just having software in place isn't going to tell you how or where to market, that's what marketers are for.
Strategy Analytics estimates that revenues from online games will reach $11.5 billion by 2011, a 25.2 percent compound annual growth rate (source: arstechnica news). In 2006, the North American subscription market hit $576 million, and Europe rose to $299 million. Europe has seen the fastest growth over the last few years, rising from $74 million in 2004, and is expected to see the most growth over the next few, as well (source: IGN).
There are two main methods that game developing software companies use to create revenue. These two methods aren't exclusive to graphic-based online games, the second option is also used by text-based online games such as MUDs.
Method 1. Retail the game client program for $30-60 per user account, and
1a. Either elect to have server game play for free: Guild Wars, NWN, etc.
1b. Or, have users also pay for a monthly subscription: WoW, City of Heroes/Villans
Method 2. Allow users to download the game client for free, and
1a. Have an in-game "store" that users use real world money to buy items for their in-game characters
1b. Exclusive use of special items and character equippables that greatly enhance playability for a fee
1c. Examples
MMOs aren't immune from the 4 (or 5, depending on who you consult) P's of marketing, otherwise known as the marketing mix: Product, Price, Place (distribution), Promotion, and entrepreneurship. Customer acquisitions and retention are key issues for MMOs, just as with any for-profit business. The MMO facet of the gaming industry is beginning to see the emergence of a high barrier to entry: Price, and I'm not talking about standard purchase fees, but rather how much it will cost a game developer and its VC investors to bring an MMO to market.
Who would have thought that when games made it to the online realm that bringing a game to market would cost $25+ million?
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Wikipedia definition of MMORPGMMO ProfitabilityGames with strong online components outsell the competition
Why the MMORPG subscription based business model is broken
Free-To-Play MMO Creators Should 'Show Us The Money'
