Rethinking the economic model
When discussing business ideas, the hard part would be to think of something new, or better said by Seth Godin; Something Remarkable. It seems common knowledge nowadays that the music industry’s business model of making obscene profits on record is slowly fading. It’s being replaced by the long tail in music preference and selection, better suited for today’s online market. If you have any doubts about this, read “The Long Tail” by Chris Anderson. But for gaming it appears exactly the same thing is happening!
And just as we have concluded with the music industry: You cannot blame the market! Powerhouse Electronic Arts put in a big loss over last year, also blaming market conditions, this in a period in which various research reports and publications told us ‘gaming is recession proof’. Perhaps the traditional publishers should consider the fact that their passive approach to market conditions is what lead them to this point, it´s not some external failure. Looking at Valve´s Steam model I can only conclude they have managed to translate market changes to a better product. Well at least a better distribution model.
Or consider Lord of the Rings Online, Turbine´s MMORPG set in Tolkien´s world. They have thought of another way of keeping their game alive; lifetime subscriptions! One large fixed fee to be able to play the game as long as you want, even though the addons they publish on a proposed 1,5 year basis are to be paid for. Allowing them to create a vast group of customers that percieve themselves playing a ‘payed gamed’ for free.
I can understand that a corporate entity like EA has trouble turning away from a business model earning them billions, but their losses should be a sufficient signal. And let’s face it, the bottom line is that the winner in the long term when it comes to b2c selling, will always be the one offering best value for money, even if its only percieved as being best.
So, what will the next market about to change be. Your gues is as good as mine.