Lots of traditional publishers are starting to develop free-to-play strategies, even the staunchest opponents are realising they need one to continue to be a player in the gaming space. By traditional I mean the ones that still put a disc in a box and ship it to a retail store. You can’t really blame them and expect a overnight change to the entire of foundation of what made them successful in the first place. Much like the music and film industries, some publishers are struggling to grasp the wide reaching implications of digital distribution quickly enough and clinging on to what they know works. Their biggest failure lies not in the un-willingness to change but in the un-willingness to truly understand the online space and the free-to-play business model. There’s a massive knowledge gap.
Here are some of the fundamental challenges traditional publishers face:
1) Retail focused Infrastructure — Traditional publisher are built around retail. They have manufacturing teams, operations teams, sales teams. They schmooze Buyers from Best Buy, Game, FNAC, Saturn etc., they print manuals, manufacture CDs, design, proof, copy, get ESRB/PEGI/USK ratings, and work on submissions with the console owners. All this takes manpower and money. Even though retail sales are decreasing you still need all those resources to produce less units. So the overhead remains but the volume and subsequently profit diminishes.
2) Coming late to the Community party — Historically traditional publishers are not used to in-depth community interaction, with the rise of social media this has changed and most publishers will have a community or at least a social media team. Often PR teams still push out Twitter and Facebook messages in a press release like fashion vs building true engagement. By the nature of the box distribution model the process is one-sided and not as organic as with a online game. With the lack of a beta phase there is limited consumer feedback pre-release. There is little involvement from the community in shaping the final product, often this beta phase can be a critical part of a online launch where the grassroots community is built. Early advocates drive positive word mouth.
3) Old school Marketing — Most large publishers have over-inflated marketing budgets that use a scatter-shot effect to reach out across multiple mediums: outdoor, TV, events, radio, online, viral and social media. Large scale campaigns like this make a lot of noise but are not necessarily ROI friendly or effective for a more specific demographic. If you’re trying to reach a niche audience of relatively hardcore free-to-play gamers you need to consider: they need the right PC spec to play your game, must have a means of making a online payment, probably be male between the ages of 16–34, etc. The point being you’re not going to best reach that person with an outdoor billboard on Sunset Blvd or the London Underground. You need more focused marketing efforts with a close eye on your conversion rate and cost per acquisition (CPA). Traditional publishers need to tone down their marketing efforts and make them much more focused on conversions vs brand awareness and noise.
4) Expensive External dependencies — Creative Agencies, Media Agencies, PR agencies, manufacturing suppliers are all part and parcel of games publishing. The issue is much like the traditional publishing infrastructure, these suppliers are setup to work on big launch campaigns and one off projects. Not necessarily on long term ongoing acquisition and retention marketing campaigns that a successful online title with a long lifespan needs. Retaining these companies over long periods is extremely expensive and cost prohibitive. Once you have contracts in place and have established relationships it’s not easy to close the doors on those overnight.
5) Sticking to outdated release beats — dictated by all of the above. The usual cycle of pre-release reviews, teasers, tightly embargoed exclusives all work differently for an online free-to-play product. For example with an open-beta it’s much harder to embargo things, you can’t send press a review copy because the servers aren’t actually live yet. Not all the marketing should be front loaded, you need to think about post release updates, patches, and what activity you need in-place in the months after launch. On-going engagement builds long term retention. It’s time to start rethinking existing marketing and PR ‘best practice’.
6) Lack of Technical Infrastructure — Server hosting, billing, customer support, analytics and tools. All these things need to not only be established but also maintained. Publishers need the resources with the right skill-sets to build and manage these. This is no quick fix. It can take years of trial and error to get right, as this is still a relatively new space there is not much available talent with the relevant experience.
So what can these publishers do to better prepare themselves for continuing shifts in the industry? Well, step 1 is acknowledging you have a problem. Build a knowledge base quickly, bring new talent into the ranks that understand the online and free-to-play space. Make the hard decisions sooner rather than later, focus on result oriented implementation, build effective data tracking tools for things like marketing and monitor those closely. Focus on digital distribution strategies either by relying on internal systems or partnering with online distributors. Figure out future revenue models based on something other than pure box sales. Do some due diligence, understand the space and learn from the folks doing it successfully.
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