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Videogames Have Marketing Potential

I was reading about the recent decline in videogame industry sales--down 17% in March from a year ago, according to NPD. An analyst with JAG Advisors stated that "with prolonged continued economic weakness ... it's going to be hard for the growth rates to avoid falling." What had been viewed as a recession-proof bright spot in an otherwise bleak economic story, was hitting its own rough patch.Is the game industry going away? Of course, not. It hit a record $5 billion in sales in December. The "hit-based" console game business will rebound. As videogame companies love to point out, the cost of a game/entertainment hour is the lowest of all entertainment alternatives--except, perhaps, reading a book.

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The importance of gaming has moved beyond the marketplace to become a mainstream social phenomenon. The game culture supersedes games, consoles and accessories. It now influences diverse fields from education, training and medical therapy to motivating consumer behavior. The point of gaming is interactivity. Static, single-dimensional communications are less effective, particularly in traditional media. These changes are both profound and irreversible. It is a one-way street, and many industries are struggling to catch up to the consumer shift that has already occurred.

This temporary decline in video game revenues might actually highlight an underlying shift toward alternatives to game consoles: Consumers are increasingly using Web-based games that cost less yet are equally engaging.

Take Pogo.com, Electronic Art´s leading casual gaming site. Monthly unique visitors have steadily grown and now exceed 10.5 million. What is even more impressive is that visitors frequented the site an average of 66 times in a month, and Pogo´s heaviest users visit almost nine times per day. Another surprise: Women age 35 and over are the biggest users. And Pogo is just one game site.

Gaming is pervasive, motivating and addictive across all demographics. But, it is not the game content that drives people to visit at least twice a day, every day. It is the unique game mechanics--the "meta game"--that drives people to continue to play. People like to play the games, but they like the challenges and competitive aspects of the games. Simple mechanics include earning a trophy or a badge to display in your profile, seeing trophies that you have not yet achieved, having challenges or seeing your name on a leaderboard. These simple mechanics have a profound impact on consumer behavior. Increasingly, the content is generated by the users themselves, and it is becoming secondary to the "earn, reward, gift, redeem" meta-game culture.

The ability to earn points or a currency and then redeem the currency to purchase virtual goods is also generating significant usage and revenue streams for publishers. Take the DunderMifflinInfinity.com site, which was created by NBC for fans of The Office. Visitors to the site contribute most of the content, participate in weekly tasks and vote to earn virtual currency called "Shrutebucks," named after Dwight Shrute, a character in the show. The site generates word-of-mouth buzz among influencers, creating continuous excitement for the show when it is in reruns or off-season. It also generates sponsorship revenues for NBC.

If game mechanics are so powerful, why don´t we use them to address other consumer challenges? In its purest sense, the purpose of consumer marketing is to get consumers to take notice and motivate them into action. As Leo Burnett once said, "Fun without sell gets nowhere, but sell without fun is obnoxious." And, let´s face it: Games are fun. Increasingly, companies of all kinds are integrating game mechanics into their sites so that they can take immediate action based on a consumers´ behavior to reward and build loyalty. Easy to say, difficult to execute.

The results are compelling. For instance, Bunchball´s Nitro customers are routinely seeing upward of 55% increases in desired behaviors, such as time on site, uploads, downloads, ad pages consumed and so on. There are also significant increases in traditional brand metrics such as "intent to purchase," "brand favorability" and the like.

These results are particularly impressive, given the declining performance of traditional advertising. Consumers are tired of being bombarded with irrelevant commercial messages. Game methods, even without a game per se, are more impactful because they are more respectful and more emotionally relevant for a consumer.

Peter Daboll is CEO of Bunchball, a Granite Ventures and Adobe-backed company that helps brands and publishers drive consumer attention, visits and loyalty through game mechanics. He was also president and CEO of comScore Media Metrix and chief of insights at Yahoo!

[Estimated timeframe:2009-onward]

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: Forbes.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=3950

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