Take a look at this.
“In the short term, some publishers will attempt to exploit higher prices on the iPad, but we absolutely believe that the future of the ecosystem will be Freemium,” offered Jeffery.
“Our entire strategic approach is about building Free-2-Play games and monetising against usage. We believe that consumers should pay for what they enjoy, rather than pay for trial, and we believe that extends to the iPad.”
You have to laugh when someone tries to alter the basic relationship of game company and consumer. It never works. But they keep trying and keep hailing it as the next big thing ever.
The basic relationship is this: game companies put out premium content. Consumers go out and buy the premium content if it fancies them. This basic relationship will continue indefinitely. Book companies put out books which are ‘premium writing’ and customers may or may not purchase them. Movie companies put out movies which are ‘premium video’ and customers may or may not purchase a ticket for them.
Freemium is a polite way of saying crappy content. Can someone point to me a business model where freemium works (that isn’t supported by advertising)? People are driven to content and will pay money for it.
“We have certainly seen that App Sales in the US for the first couple of months of the iPad’s life are reflective of higher pricing and quality expectations,” he said. “Apps like Numbers, Pages, Keynote and a number of other productivity apps are still high in the Paid chart, which signifies that the device is being used in a ‘higher’ capacity.
“However, games also dominate both the Free and Paid iPad charts – a highly significant indication that a shift away from traditional console videogame usage toward mobile gaming is occurring.”
When his own data shows that people are willing to pay for premium content on the platform he is supposed to represent, he dismisses it! Amazing!
How does games dominating both the Free and Paid iPad charts indicate a shift? Premium game software is still selling well on home consoles (provided it has quality content).
Disruption is about selling crappy products to crappy customers. Disruptive products are often cheaper than what they are disrupting. iPad is very expensive. The customers who are purchasing the iPad certainly are not ‘crappy customers’ but are very much gadget lovers. In other words, if there was disruption you would see housewives and grandmas buying the iPad (they would qualify as ‘crappy customers’ to tech products). You aren’t seeing it because it isn’t disruptive.
“The iPhone disrupted the mobile industry and the development community in several profound ways,” he said “Usage changed, friction reduced, and iTunes as a pre-established content path broke down the traditional carrier-provided content model.”
This is not true. The iPhone was never a disruptive product. The authors of the disruption literature even point this out. iPhone was essentially a ‘better smartphone’. What the iPhone differed is that it was a type of mobile computer instead of just being a powerful cell phone. iPhone was not a crappy product for crappy customers. And iPhone’s growth has come from customers abandoning other cell phones.
They could argue the iPod was disruptive but that was many, many years ago.
“The iPad will disrupt the netbook and potentially laptop and living room videogame console model in an evolutionary way – building on those areas of disruption pioneered by the iPhone and the iPod before it.”
Simon Jeffrey has no clue what disruption is. There is no such thing as ‘evolutionary way’ in disruption. This is why it is called ‘disruption’ in the first place because it defies the ‘evolutionary way’. Building on areas is called ‘sustaining innovations’.
The only way how iPad will be disruptive is through a new advertising model. But this will not break in traditional gamers. It will not break in the old school gamers. It will unlikely break in untraditional gamers. No matter what type of gamer is the person, they all desire high quality content. Freemium models and even advertising models are insufficient to create high quality content.
The iPhone cannot even put a dent in the DS. Yet, Simon Jeffrey thinks the iPad is going to cannibalize console market gaming? Good grief.
Back in the 1980s, the home console market was declared dead forever not because of the Atari Crash. It was said that the rise of home computers made home consoles obsolete. Since consoles can only play games and computers can do that and everything else, why buy a home console? When the NES arrived, no one paid any attention to it because it was a Japanese 8-bit console when home computers were going 16-bit. The NES disrupted because it was a crappy product for crappy customers. The crappy customers to home computers were children. Children could not easily use the computer or play its complex games. Families could not gather around the home computer to play together.
The gameplay of Super Mario Brothers and Legend of Zelda was not new (except to the children at the time). What was new was the content. No one has ever made a game as vast as The Legend of Zelda back in its day. No one had ever imagined Mushroom Kingdom which is a video game wonderland.
The issue that no one from Apple is bothering to address, and I suspect it is a legitimate mistake made from the top of the company (of those who are ignorant of gaming), is that computer gaming does not infringe on console gaming. Both computer gaming and console gaming have existed side by side in parallel for decades.
The iPad/iPhone are computers and their impact will be limited on the computer side of the equation. Some companies who wish to be like computers, such as Sony, might be impacted. But there is a reason why the DS, released in 2004 (before the Video iPod was even released) still keeps going and going despite the Apple fanboy chorus from Roughlydrafted.com and other areas of the ‘DS’s demise’. If the iPhone didn’t have an impact, why would anyone think the iPad would?