Videos games industry: The Hit and The Long Tail


OnLive

I’m currently putting a lot of time in to the literature review and methodology for my final year dissertation (that’s thesis to any readers from across the pond). The title is ‘How has the role of a public relations practitioner in the video games industry changed with the advent of social media?’ and some of the subheadings contain little nods to the gamers that will probably fly over the heads of any marker, therefore being a bit pointless. Oh well.

One of the themes I’m looking at is Chris Anderson’s idea of several industries, such as film, music and literature, being ‘hit driven’, with certain titles expected to be a commercial success being afforded much more budget and marketing activities in the hope that they will generate profit. Mark Harris discussed the idea his GQ feature ‘The Day the Movies Died’, with studios afraid to try anything different or new, risking going against the industry and profit loss.

The same can be said for the video games industry. Games aren’t getting any cheaper to produce (in fact, the opposite is probably true), so publishers have to be sure the game they are pumping a huge amount of money into will give them some return. This has resulted in many games having a very similar feel (I’m not going to name any, mainly because I’m probably guilty of purchasing them on release date and pumping way too many hours into them).

However, Andersson argues that internet has given the ‘long tail’ of music, film, books and games purchases (the titles that aren’t big enough to demand shelf space) a new platform in which they can become visible (and therefore purchasable) to a customer who would not have previous had access. Think Amazon for books, iTunes and Spotify for music, Netflix for films and platforms like OnLive and XBOX Live for gamers.

What I’m interested in is how these platforms communicate with their customers, and how social media to do so, such as encourage customers to share purchases, etc. I’m also interested in how the social media activity for a PR practitioners varies between pushing a ‘hit’ as opposed pushing one of the ‘long tail’.

Below is an excerpt from part of my literature review that attempts to analysis this idea. Hope you find it interesting :)

In February 2011, Mark Harrison published an article in GQ titled, ‘The Day the Movies Died’. He discusses the break down of the movie industry, with filmmakers and producers afraid to try anything new and 2011 being a year of comic book adaptations, remakes, sequels, prequels, sequels to prequels, sequels to sequels and children’s book adaptions. In the film industry there is a formula for what works and what will make money; the film business it is a ‘hit industry’.

Chris Anderson discusses the idea of a ‘hit driven culture’ in The Longer Long Tail (2009), whereby the film industry shares its huge marketing budget over a portfolio of titles it hopes will make profit, though not expecting all to breakeven. Earls (2007) discusses the same problems in the music industry in the book Herd, with the powerhouses behind the hits is afraid to put too many resources in the new bands they worry won’t make it.

The same issues face the video game industry. High definition graphics, high performance gameplay and cross platform titles might be a plus for players, but for developers and publishers increased production costs mean increased risk (Takatsuki, 2007). Large companies may be able to absorb the costs, but it can be life or death for a small developer (Morris, 2010).

The video games industry can also be describes as a ‘hit industry’, with much of the sales concentrated of a few products; for example, a quarter of UK houses own a title from the Call of Duty franchise (EDGE #233, 2011). Horizontal integration has occurred as large publishers buy up smaller ones, as well as vertical integration where publishers and monopolies, such as Microsoft, also acquire developers. Microsoft owns the platform (XBOX), the publisher (Microsoft Development Studios), several smaller developers and the online platform (XBOX Live). The reason behind this integration is a way to exploit ‘economies of scale’ and scope, in order to control distribution and maximise potential global sales (Gil and Warzynski, 2009; Kerr, 2006).

With so much profit at stake, publishers have to ensure the success of their hit reflects the time and money put into development, and develop clever marketing strategies. One way of doing this is to take advantage of the audience sat behind mobiles, laptops, computers, tablets, consoles and interactive televisions, and use social media.

The long tail

Professionals in the video games industry, however much they focus on the hits, cannot forget about Anderson’s ‘Long Tail’ of titles, whereby a large number sales come from ‘niche’ titles not available to purchase in supermarkets or retail stores. One example Anderson uses is Amazon for the sale of books; buying niche books was previously hard to do, with retailers only storing the top few hundred or so in popularity and supermarkets perhaps only the top 50. However, an online catalogue like Amazon has both the opportunity to increase the amount of ‘shelf space’ for books, as well as reach a huge audience. The result is a seemly ever increasing long tail of purchases, with every new book listed being purchased at least once a year and the tail therefore amounting to an increasing proportion of Amazons sales (Anderson, 2009).

The video games industry has also begun to take advantage of this trend made possible by online distribution, with services like Microsoft’s XBOX Live Marketplace, XBOX Indie Games and XBOX Games on Demand (XBOX 360 and XBOX originals), PlayStation Store and WiiWare. New cloud gaming platforms have also emerged to create large gaming catalogues. GaiKai (Japanese for ‘open ocean’) allows users to stream game demos into various platforms, such as websites, mircosites and social sites (including Facebook). After the demo has been trialed, players can then order the game or download directly (GaiKai site, 2011). A similar service, OnLive, allows players to rent or purchase a large selection of PC games, which are played online and hosted on the OnLive server. Games can be played on a range of devices, including on televisions with the OnLive Games System, and has a huge array of social options, such as watching other users, connecting to social networks and Facebook, voice chat and clip sharing (OnLive website, 2011). Though just targeting the PC gaming market at the moment, in the long term this could be a threat to the console games industry as OnLive begins to eat into the target audience (Nuttall, 2009).

 

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9 thoughts on “Videos games industry: The Hit and The Long Tail

  1. The role of grass roots media in gaming is a big theme throughout Convergence Culture, and a lot of Henry Jenkins other work for that matter! However, I’m not sure his views are completely relevant towards your topic, but I suppose it’s worth a look.

    Good luck with the dissertation.

    • Rocii says:

      How about online games? And when you need to sarech for troubleshooting? Or game hints? etc, etc. Honestly, a no network’ setup seems like going backwards, with or without evil DRM. We could just as well go back and play farm animals with sticks and rocks, and that would also solve the virus and DRM issue.Since when do people who know what they are doing need software firewalls and antivirus? Just place the box behind a well-configured consumer NAT router, don’t read spam email on it, use some sense with Firefox (stay away from warez and teh P0rns, even `ok’ sites may be compromised e.g. by unclean advertisments), install all Win XP updates, and if you can manage, skip the bonzai buddy installation. This will surely be fine enough for a gaming machine. a0|a0

    • Aris says:

      Online gaming is a great suistbtute for offline gaming when you’re lonely and have nobody to play with. The problem with online gaming is that there are going to be huge jerks that will annoy you to death. In FPS games like Call of Duty. Games that are good online are games with fun multi-player like Ratchet Clank. Offline gaming is really the best when you have friends to play with you, rather than random jerks online. However, online gaming simply provides necessary amounts of people to play with. You’ll have to ignore every loser who tries to put you down. The internet has plenty of jerks to ignore. Games that are best for offline are games like God of War, Destroy All Humans, etc. I’d say say that single player games and small co-op games are best for offline.

  2. Matt says:

    It’ll be intriguing to see whether there’s any marked difference in the way these services are used depending on the platform they’re on. I imagine the more casual gamers that consoles typically attract will expect more in the way of social networking integration as their Xbox’s and Playstation’s become more of a media centre than an outright gaming machine.

    Best of luck.

    • Thorben says:

      I’m at the part where you have to save Rinoa in space and the plot is just so WTF all over the space. Lunar Cry? Sealed sorceress? Floating ruoand in space like you know what you’re doing then luckily finding an abandoned ship so you don’t die? It’s totally off the rails and the kind of bizarre crap that you’d find in a dream for sure! And NORG yeah, who knows what that was about. :-PConsidering how many times I’ve seen GameStop advertise that you can trade two games in to equal the price of that not-yet-released title, which you can put on reserve for only $20 I mean what is that about?GameStop is ridiculous. As much as I like physical media, a part of me looks forward to watching GameStop’s business model go up in flames and gaming distribution moves more and more towards the digital side of things. Do you think going digital will make games more accessible to folks from lower income households? I hope that it will lower the entry fee to new games, but it also removes any possibility of reselling a title once you’re done with it.Also, your comments about POC being stereotypes and only white dudes getting to be the knight in shining armor, seriously. Ugh.

  3. Hello there! Would you mind if I share your blog with my facebook group? There’s a lot of people that I think would really appreciate your content. Please let me know. Cheers

  4. ryan says:

    type of thing that we were always wriored about with downloadable content, and one of the reasons OnLive’s pricing scheme was not received well. Not only do you not get to own a physical copy of these games, you also lose them once you stop

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  6. Crysis 3 says:

    I’m in the sim racing community, and it’s amazing how lonely it was hating EA back in 2002 when they bought out the nascar license, basically shutting down the best racing sim company there’s ever been. It seems they took the lessons they learned from doing that and applied them to ruining everything else in gaming. Hopefully people will learn from this and not support the next company that starts using shitty tactics to get to the top of the heap.

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