Peter Drucker said, “The customer rarely buys what the company thinks it is selling him.”
One of the bedrocks of disruption is to frame the problem correctly. When you hear someone utter the word ‘demographics’ – e.g. children, housewives, grandmas, teenagers, they are wasting your time. Segmenting the market into these ‘tribes’ is not useful as a context for product roadmaps or assessing the competition for customers’ wallets.
Customers hire the product for a job. The question is, what job has the product been hired to do? It is critical to understand how customers use the product or service.
And there is a tendency to view market competition through a technology lens, not a business one. So when a company sees a new technology, it will note its obvious inferiority to what current leaders offer. It then becomes easy to dismiss it.
Take the video game consoles. Wii was initially dismissed because it was seen as technologically inferior to Xbox 360 and PlayStation 3. In fact, all the analysts dismissed it. But the Wii sold so well because it was better at performing the job customers wanted it to do: entertainment. High definition visuals are not entertaining to the masses. Visuals had already passed the ‘good enough’ state for them. Going high definition was overshooting the market.
There are many reasons why the Wii became successful. But the frame of the reasons why Wii was successful has nothing to do with performance marketing (demographics) or price or technology. It has everything to do with how Nintendo looked at the game console as a product that customers hire to do a job. What job should a game console do? And what would make the console do this job better than any other console before? The answers are numerous and can be easily learned by hearing Nintendo execs especially prior to the Wii’s launch.
Many game developers think customers buy their games because of their ‘vision’. The truth is that customers hired the game to perform a particular job. Interestingly, customers tend to buy various games to do various jobs. For example, they might one game for a single player experience while another game as a multiplayer experience. The job of launch games is to ‘show off the console’ so to say. The ‘vision’ of the designer is irrelevant ultimately. Games are about performing the job the customer wants it to do.
Everyone reading this site already has heard the above. But I want to focus not on the ‘customer’ because every company thinks they are focusing on the customer (when they may be focusing on technology or something else). I want to focus on the frame. And the frame is to look at the product as a job the customer hires to do.
The history of the game industry needs to be re-written. Much of the history is framed either in technological terms or in demographic terms. Both present a false history which is why companies that pursue such ‘narrative’ end up crashing their company on the rocks. Games are not in the technology business. They are in the entertainment business. Games don’t sell to one demographic or another. People hired games to perform a specific job, all of which are branches from the central trunk of entertainment.
Looking back, a very different history emerges. For example, the NES is said to have been successful because of demographics, because of kids. Is this true? Kids were very instrumental in the success of the NES. However, the NES was hired to do the job for gaming by kids for many reasons such as the computer being too hard to use as a child. The computer also felt like work. The NES did not. So despite all the analysts and Trip Hawkins at the time saying consoles were forever doomed, consoles roared back. The fault was that they relied on technology and demographics for their answer.
Let us take the 16-bit Console War. The argument is that the competition between Sega and Nintendo was because of technology (16-bits, then 32-bits, then CDs, etc.) and demographics (NES kids getting older). The truth was that neither of these were the reasons. Genesis and SNES were hired by customers instead of the Master System and NES because the 16-bit machines were far more entertaining. Software was surprising. The hardware, ultimately, was irrelevant just as the accelerometers in the Wii-mote are ultimately irrelevant. The customer never saw the chips. The customer saw only the software.
It is an interesting idea to go back and say, “Why did customers hire Mario in the latter 1980s?” “Why did customers hire Zelda?” “Why did customers hire the products we know today as classics?” Sure, we can just write off these questions by saying, “Because they were good games!” or “Because they were entertaining!” But what about them was entertaining? Why were they good?
Why was Super Mario Brothers good? In this case, no one cites technology (which is one thing I like about studying the NES Era. No one ever accuses the NES success to have been a technological one). The common answer is that Super Mario Brothers performed so well was because of Genius Developer. In this case, that Genius Developer was Shigeru Miyamoto. To this day, gamers practically genuflect at him as if he were some demi-god.
Interestingly, games afterward keep being ‘seen’ being made in either three categories:
–Genius Game Developer (often is used if the upcoming game is to be ‘art’ [oh that word!]). These games tend to be fantasy and fiction orientated.
–Technology (the game is designed with Unreal Engine 3.0 or uses voxels [remember those? Haha] or something else.) These games tend to be launch titles or appear periodically in a system’s life to show ‘its power’.
–Demographics (the game is said to be for some segment of the population). These games are always the ‘licensed’ games, the ‘children’ games, the ‘sports’ games, and, most recently, the so-called ‘casual’ games.
Upcoming games as well as games in history are written about in either one of the above three frames. All three are wrong.
The correct frame is what job is the customer hiring the product to do? People hire Smash Brothers and World of Warcraft to do two very different jobs. People hired Super Mario Brothers and even Zelda to do two very different jobs. Yet, it is historically written that they are Athena-like outgrowths from Genius Game Developer. If there is any genius in any developer, it is in understanding the job the customer wants done.
In interviews, previews, and history, you never, ever hear of the jobs the customer wants or hired the product to do. So what we have ended up with is an industry that has evolved to not care how customers behave.
The problem isn’t that the industry doesn’t think the customers are important. It is that they think they know what the customers think are important (like technology) and not looking at their true behavior. So we end up with $600 game consoles because someone at Sony forgot to check to find out what job customers hired game consoles for.
What should be scary is that people are coming up to me asking, exuberantly, about the decline in gaming sales of last month according to NPD. They want the industry to crash. They are not crying or fearful about the future. They want the gaming industry to collapse. They want game companies to go out of business. They want the industry to not to be ‘recession proof’. You can see news stories of writers scribbling joyfully that ‘the games industry may not be as recession resistant as it thinks’.
Why do they feel this way? Could it be that the products are not seen as being hired by customers to perform jobs? Could it be seen that the emphasis for products to be measured on technology, on demographics, and on Genius Developer?
Consider what has happened this generation so far:
-Game consoles are launched at $600-400 price points.
-Game prices increase from $50 to $60.
-Massive Xbox 360 hardware problems. Microsoft cut corners on the manufacturing creating a console that will not endure.
-Customer service ends up being crappy and outsourced to India.
-Publishers push for digital distribution but have not checked to see how this deals with the job customers want their games to do.
-PSP Go is released as a digital distribution handheld only. Customers can only ‘rent’ games on it, never truly ‘own’.
-Selling incomplete games and demanding more money for the rest of it.
-Incomplete games sold and ‘patched’ later.
-Console games requiring time to ‘install’ before you can even play!
-Some games (Starcraft 2) demanding to be bought three times in order to have the full experience.
-Massive artificial hype for a tech demo that has no release date, no software, and is not even allowed in any random consumers’ hands and declared the most revolutionary thing ever (NATAL).
-Analysts who say the most absurd things yet are invited back again and again to keep saying absurd things.
-Game journalists being more interested in connecting with industry people than the readers who might as well be riff-raff.
-E3 attacking the non-industry attendees and eventually barring them so only ‘proper’ Industry people may attend.
-Third party games being all being tailor-made to a ‘demographic’ depending on the console.
The brighter spots have been the DS and Wii which the consumers have rewarded. But all of this points to an industry that is out of control due to not being framed around the jobs the customer wants done.
Consumers want an industry crash. The consumers feel the industry is giving them the cold shoulder so why not return the favor?
Let us have those prestige games!
Let us stop making physical content!
Let us attack customers when a ‘critically reviewed game’ didn’t sell well.
This industry sees customers as an annoyance. Customers demand quality, price cuts, content, and are very expensive to please. The industry might as well say, “Stupid customers! What do they know about gaming?” or ”Wouldn’t it be so nice if the customers would just go away? And leave this industry in peace?”
Stupid customers! Yeah! What do they know? Let’s just talk about demographics, technology, and Genius Developers instead.