Posted by: seanmalstrom | July 5, 2008

Ubisoft discovers upstreaming

The ‘Birdman’ strategy, of responding to disruption only in the most superficial elements, of chasing demographics instead of creating job centric products, of marketing directing development more than what the user wants done, only works on young kids. Making such games is not new; it is very old and the Industry has been doing it for a long, long time. One of the reason why it works is because the kid isn’t doing the purchasing. It is the parents. Parents buy children’s games to make the kids shut up. It is a very useful job that needs to be done. Movie licenses, comic book licenses, cartoon licenses, all of these are used and aimed at the demographic of young kids.

Since this strategy works for young kids, birdmen assume it works everywhere else. Video games have traditionally been catered to young kids and youngish males. It is assumed this catering will work everywhere else.

To this day, no game company has been able to do a demographic centric product work outside the young kids market (which is the traditional base). In order to get different demographics, from older people to women, to everyone else, the product must be job centric. Brain Age is not aimed at a demographic. It is aimed as a job to help improve your brain. Wii Fit is not aimed at a fat demographic. It is aimed to perform the job to help stay fit. In the same way, Zelda may, at the surface, be seen as to be aimed at young demographics, but Zelda is really about performing the job of immersive adventure. One of the reasons Ocarina of Time sold so well was because it was selling to fantasy/story loving girls who didn’t buy the earlier Zeldas.

The reason why marketers try to understand the consumer (the demographics) rather than the job, in video games, is historical. Up until now, the tools for market research were formulated and tested, such as feminine hygiene or baby care, the job was so closely aligned with the customer demographic that if you understood the customer, you understood the job. Marketers who are focusing on demographics will end up targeting phantom needs.

In an interview with Casual Gaming Biz (I tend to throw up in my mouth whenever I mention that website, that nest for the birdmen), Casual Gaming Biz introduces the interview with an out-and-out lie. On its glorious pages we read:

Ubisoft’s success in the boxed casual games market has been well-documented, but where can it go from here?

But Ubisoft’s financials broke down their sales by platform and we get:

Wii
2007/2008 – Q4: 9% // Full Fiscal Year: 10%

PS3
2007/2008 – Q4: 23% // Full Fiscal Year: 20%

Xbox 360
2007/2008 – Q4: 33% // Full Fiscal Year: 26%

The only way what Casual Gaming Biz wrote is true is if so-called ‘casual gaming’ is huge on PS3 and Xbox 360. I suspect Casual Gaming Biz will proclaim Ubisoft’s ‘casual approach’ is successful even though it is not because the site has an agenda: to promote ‘casual’ gaming.

Nevertheless, we read:

For the time being, in my team we decided to focus more on the kids because it would be easier to get them to come back to the products than perhaps an older audience. We had to be more precise about what we were offering, and we’ve decided to aim it at that market. They are the ones who will grow up with the product. We know the 15-25 year-old male, we know those people very well, but the ‘tweens’ – the girls who are a few years younger – that’s something we have to be reactive to.

Since when has kids games, even for little girls, been a ‘new market’? Kids are the bread and butter of the industry.

I can say that the girls who used to play the likes of Horsez and other Petz games – eight-year olds – are growing up and demanding more from their gameplay experience. We have to respond to that.

This, of course, is upstreaming. Users demand more from their gameplay experience and someone will get rich satisfying that desire.

“But Malstrom,” you say. “These are kids. They demand more simply because they are growing up. That cannot be upstreaming.”

But it is! The complicated controller and current sophisticated games didn’t come out of thin air. It started with the NES (or Atari for the Atari freaks), and gaming absorbed new gamers while making more and more complicated games for the Core that were growing up. But those who grew up with the NES are in their latter twenties. They have jobs, mortgages, wives, husbands, and heaven help us, kids. Simply doing the same thing won’t work anymore. And the pipeline of new gamers, of young kids, has been running less and less lately. The industry could not take growth for granted anymore.

Young girls are nothing new and shouldn’t be considered part of the ‘new market’.

From Game Over, page 399:

Also, more girls between the ages of six and fourteen were becoming primary players [for the NES], and their level of satisfaction was intensifying.

It feels like the industry has tumbled into Ecclesiastes where everyone says, “Look at this! This is new!” where really it is “nothing new under the sun.” It is funny, however, that Ubisoft has to deal with the issue of young girls upstreaming. Who knows. They might even play Zelda next *gasp*.

It is fascinating how Xbox dudes like Greenberg can say, with a straight face, that Wii users will go upstream to Xbox 360 and it is reported everywhere and many people, including analysts, praise it with credibility.

Yet, it is not allowed to entertain the thought that new market users might go upstream to more complicated Wii games such as Mario Kart Wii (a bridge title) despite history of the DS, history of the NES, and even Iwata and Miyamoto’s words. Apparently, these ‘Core’ Nintendo games sell so much more than on their previous consoles is because Nintendo fanatics are wildly reproducing. Without upstreaming, there is no other answer as to where all these gamers came from.

And for some reason, it is more ‘plausible’ that users will go from Wii Sports and Wii Fit (since they aren’t allowed to play the more Core Nintendo games) to Gears of War and Halo 3. But that is even more plausible than the Sony answer where all these supposed buyers of Blu-Ray will jump from passive movies to hardcore games.


Responses

  1. I’m really interrested to see how Nintendo will prevent itself from getting caught in following the core upstream and letting the noncustomers down again

  2. I think that’s the wrong way round Franz. They’ll be leading (or following) the nongamers upstream, not followihg the core – which makes a whole lot of sense.

  3. nongamers becoming the new core as we became the actual core (we were nongamers back then, remember)

    Nintendo lost Focus once (with Sega starting their aggressive Marketing at those who Nintendo brought into Gaming), how will Nintendo stop that cycle from affecting them and narrowing their market

    It was Nintendos own Fault to stop focusing the indifferent and go for the market that was, instead of broadening it and i’m rather sure that sony and MS will try to do what Sega did back then… focusing on (then not so new) gamers with more sophisticated versions of what Nintendo is offering

    Sega does what Nintendon’t… yeah, Right…

  4. Franz – Nintendo avoids it by running the same cycle next generation (in the chronological sense, not the business sense). Start by creating a relatively large number of “casual” or pick-up-and-play games, then bring out bridging titles, then move up to the core region. And in the meantime, also provide some core titles to appease those who are already within the core market.

    Also, Sean, there’s one inaccurate thing in this article – you claim that the fact that Ubisoft’s biggest profits coming from PS3/360 indicates that the claim that Ubisoft has been successful in the casual market is false. It doesn’t. The proof that it’s false isn’t that Ubisoft have sold better in the core region, but that even with most of their casual titles going to the Wii, they didn’t see much profit from the Wii.

  5. @Franz

    I think Nintendo has learned their lesson from last time when they started listening to analyst and consultants instead of just focusing on indifference.

    For instance, I fully expect Microsoft to rip-off Wii Sports for their new X-Mote. Their version will of course have all the bells and whistles they think will make it better – HD, Online, Leader boards, etc.

    But I suspect Nintendo, instead of just creating a Wii Sports 2 in answer to it, will create another disruptive software game that no one will be able to predict, that will continue what they’ve started, and make Microsoft’s Wii Sports clone irrelevant.

    Think about it – Nintendo could have already created a Wii Sports 2 by now, but Iwata said they were *not* going to.

    I think Nintendo now knows how not to fall into the same trap they did before, which can be seen with what the did with the DS. Instead of answering Sony’s challenge to the Gameboy by just upping the specs on the Gameboy to match the PSP, they introduced the low-tech (in comparison to the PSP) disruptive DS.

    (And can I say, I wish I had been around when it has first be revealed. From what I understand, people were confused by the two screens, which just makes me laugh. The minute I saw the two-screen set up I knew it was cool. I now have more DS games than any other – I’ve even imported games from Japan for it, something I’ve never done before).

  6. Today I find a PS3 in the Supermarket, with a Wii and a Nintendo DS. I remember Nintendo wants to broad their distributions to some unexpected places, but, saw the cheaper version of the PS3 here is quite surprising.

    Back to topic:

    Holy Birdman Batman! They discover one of Nintendo’s secret! :P

  7. @morrigan
    I’ve been recently wondering what made Nintendo focus on the existing customers instead of bringing in new customers back then.

    Every time I’d think about how Nintendo has been around so long (since 1889). I’d figure they just kept consistently making good business choices but then I’d get stuck at the point where they’d release the SNES against the Genesis.

    I guess it seemed to them at the time they needed to evolve by paying attention to analyst and consultants. All part of trial and error I suppose.

  8. @liquidninja

    IIRC, Nintendo didn’t really want to end the the life cycle of the NES – Sega kinda forced them to by releasing the Genesis. So they made the SNES to compete.

    Then, what happen after that was – for some reason – Nintendo had analyst and consultants come in to assess things for them, and they told them that Nintendo needed to focus their product on one specific group – boys of s specific age. Actually, I think Malstrom talks about this in one of his articles.

    Anyway, one can see from this, this is how Nintendo first lost their way from being a Blue Ocean company like they’d used to be. If you think about it, the Wii and the DS have actually brought Nintendo back to their roots, and what they were always about in the first place.


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