[Business Marketing] – Lessons We Can Learn From the Video Game Industry (Part 3)
It was around three years since the Sony Playstation 2 had hit shelves, and while the price had just dropped under $200, I was having trouble selling the system to a customer due to a very unusual objection.
“Why should I buy the PS2?” he asked. “Isn’t the PS3 going to be out in a year or two?”
The statement was absolutely ludicrous — at the time, the Playstation 3 was a distant rumor, something we all assumed Sony would be releasing one day, but which no one knew anything about. I convinced the man that it would be years before he’d be worrying about a PS3 — and I was right! — but his attitude was a precursor of the way the videogame industry was shifting. The Nintendo DS, the Sony PSP, the Xbox 360, the Nintendo Wii and the Sony Playstation 3 all arrived on shelves between 2005 and 2006, and the video game industry shifted into its biggest “next-gen” generation yet. As I write this article, the Nintendo DS has become the bestselling handheld system of all time, and the Xbox 360 has dropped its price to $200. The Nintendo Wii is still difficult to obtain, and the Sony PS3 is trailing the industry with 17 million systems sold. All of this can only mean one thing — in another year or two, we’ll be hearing about the next round of next-gen video game hardware.
As it stands, home video game consoles are in their sixth or seventh generation (depending upon whom you ask). And while each console generation has offered bigger and better things than the last, every generation has followed a fairly predictable life cycle:
1) Enter the market at a high price and (generally) take advantage of holiday sales.
2) Drop prices to the range of the early majority within a year or two.
3) Within three or four years, drop prices to attract the latter majority.
4) As the next system is released, slash pricing once again to attract the laggards.
As it happens, the systems that have deviated from this cycle in some way — the Sega Dreamcast, the Sony PSP, the Nokia N-Gage, the Sony PS3 — have trailed the competition, while many of those that have followed it — the Sony Playstation and PS2, the Nintendo Wii, and the Nintendo DS — have been wildly successful. Of course, there is more to releasing a successful gaming console than simply adopting the right pricing scheme, but it’s interesting to note that there is a pattern behind the pricing for the industry’s biggest success stories.
The console generations have helped to give birth to another custom in the video game industry — the extreme focus on products that are on the horizon. I first observed this happening during the days of the original Nintendo Entertainment System, when magazines like Nintendo Power started reporting on the new Super Famicom game console and its flagship title, Super Mario World. Gamers developed a thirst for information about upcoming games, and the gaming mags of the day starting hyping things up more and more as the years went by. By the time the Super Nintendo console was losing its luster in the US, speculation about the next generation of games was already in full effect. Sony was able to ride the hype engine well and position its new Playstation console to become a major player. Nintendo’s super-hyped Ultra64 (later renamed the Nintendo 64), in the meantime, arrived two years after the Playstation, had barely any software available during its first year, and was unable to offer software as deep or engaging as the Playstation’s Final Fantasy VII, Metal Gear Solid or Tekken 3, all of which were smash-hit titles responsible for selling a lot of hardware.
As the gap between console generations widened from 4-5 years to 6-8 years, gaming media began to place a bigger emphasis on hyping software. At the same time, software grew exponentially more sophisticated, time consuming and expensive to develop. There was much more for game journalists to talk about, and magazines went from being largely devoted to strategy guides and reviews to being hype machines for upcoming software. Many magazines continue this pratice today, often devoting half of their pages to previews of software can be years away from release. And retailers like GameStop follow the magazines’ lead and focus a large portion of their business on selling new releases through pre-orders. Gamers are only too happy to commit to buying games they’ve never played based solely on hype, and postpurchase dissonance is easily mitigated by the ability to trade games back in once they’re beaten.
“But Sean,” you may be thinking. “That’s all good and well, but how does this relate to publishing comic books?”
Well, oddly enough, as the video game industry has evolved and become more sophisticated, the comic book industry has gone through a few “generations” of its own. Most people know that comics went through what we call the “golden age” and “silver age.” In the 1980s, comics were largely based on a newstand periodical model. You could subscribe to comic books like any magazine, and you could buy comic books any place there was a magazine rack. Comic books were pretty low-tech at the time, with newsprint pages and limited color palettes. They were also often poorly written, and most didn’t have a lot of style when it came to art.
But that started to change in the 1990s, when Marvel and DC both began ramping things up. DC decided to go for media exposure with its “Death of Superman” series, a fairly high profile crossover event. Marvel, in the meantime, had a stable of top-notch artists who were developing the style of popular books like Spider-Man (Todd McFarlane), Wolverine (Marc Silvestri), X-Force (Rob Liefeld) and X-Men (Jim Lee). In 1992, seven artists left Marvel to form Image Comics, which helped to usher in the era of “creator-owned books” — comics developed, controlled, and owned by individual creators instead of publishers.
Much like the video game industry’s hardware generations, this shift brought about many enhancements to comics. A lot of them were simply flashy, like holo-foil gatefold variant covers and pack-in trading cards and posters. But at the same time, the artwork in comic books became much more sophisticated, particularly when it came to lettering and colors. Artwork played a much bigger role in storytelling, and artists were given the ability to draw their own custom-shaped panels and layouts — a big change from the rectangular panels of the old days. The paper used in the books themselves got glossier and heavier. Wizard magazine also jumped on the hype bandwagon, and was all too happy to talk up books coming out from superstar creators.
Unfortunately, the comic book industry imploded on itself in the latter half of the 1990s, spurring a need for reinvention. Independent publishers became much more viable, and licensed books centered around 1980s nostalgia became quite popular once the milenium shifted. At the same time, the graphic novel format began to gain traction in bookstores, and Japanese manga books, after flopping in comic book form, started to pick up steam in pocket-sized novel-length reprints.
At the same time, a different innovation was occurring at Marvel and DC as both scrambled to scoop up celebrity writers like Kevin Smith, J. Michael Stracynski and Joss Whedon to work on their superhero books. Marvel saw its properties gaining traction in pop culture as films like X-Men and Spider-Man debuted to critical and commercial success. This opportunity for tie-ins and merchandising gave Marvel yet another chance to reinvent itself — this time, as a company wielding the licenses to a catalog of hundreds of characters. The comic book division became secondary to Marvel’s new profit center: licensing.
The comic book direct market also shifted during this time as Diamond Comic Distributors beat out the competition and established itself as a monopoly. Product was no longer returnable, and retailers were forced to only order what they thought they could sell. Back issues also became much harder to acquire due to Diamond’s policies and pricing. The way business had been done in the industry changed dramatically, affecting publishers and retailers alike.
Finally, the process of producing books shifted dramatically as the new milenium dawned. Books that were once produced mostly by hand migrated to digital production. Inkers began to see themselves replaced by digital inks, and colorists found themselves pushed to learn new effects and techniques to keep up with the pace of the industry. Letterers went almost entirely digital, thanks to a movement led by ComiCraft. Artists who once had to ship their pages to publishers in tubes via FedEx could now upload digital copies, and books could be produced much faster — and cheaper! — than ever before.
What’s interesting about comic books is that the products themselves have not changed very much. But much like video game hardware, the backbone system behind the product has evolved greatly. Unfortunately, while the gaming industry learned to get good at forcing consumers to look forward in anticipation, the comic book industry has always moved forward kicking and screaming, often substantially behind the available technology.
One of the reasons for this is that the comic book industry is primarily controlled by two giants who continue to preach “business as usual” at every turn. American comic books can’t seem to get themselves disentangled from superheroes, much the way the video game industry can’t seem to put a stop to the never-ending supply of games that involve shooting and killing things. There are alternatives, but it’s far easier to pander than to create something new.
Another reason that the industry can’t advance is that there simply aren’t enough people buying. The comic book industry does a terrible job of marketing itself to people outside the fold. It’s hard to bring in new readers when you’re busy fighting over who gets to serve the existing ones.
While the gaming industry has mastered the art of hype, the comic book industry is often still stuck in the Stan Lee mindset. Stan Lee was a marketing maestro, and he knew how to hawk his books. But today’s readers aren’t reading comic books for escapist fantasies, because they can get a superior product from films, video games, and other entertainment media. Most of the existing buyers are collectors first and readers second. But the industry doesn’t seem to know that much about the people who actually read comics. Research and planning is definitely in order, but no one wants to spend the money or the time on it.
The console generations create a sort of staggered form of experience. Gamers know that with each generation of games, they’re going to get something really big and mind-blowing. With the previous generation, games like Halo, Grand Theft Auto III, Resident Evil 4 and Guitar Hero really shook things up. In this generation, games like Little Big Planet and Bioshock are already shifting things forward on one front while the Nintendo Wii opens up new teritory on another. It’s an exciting time to be a gamer.
The comic book industry could really learn from this. One of the things I’ve always been very critical about is the industry’s insistence on serialized stories that go on for as long as possible. The problem is that these stories begin to lose their relevance after a few hundred issues, and they have to constantly be rebooted to stay interesting. But when you consider the really amazing works that have come out of the comic book industry that are still celebrated today — stories like Watchmen, Bone, Sandman and The Dark Knight Returns — you’ll realize that they’re all series that told complete stories and that gave readers something to look forward to in a satisfying conclusion. That’s the sort of thing the industry needs to turn to.
One last point I’ll make is that the video game industry doesn’t have a narrow focus. The PS3 and the Nintendo Wii are designed to be home entertainment devices as well as consoles. The PSP can be used to browse the internet and to watch movies. The Nintendo DS can be used to chat with other people wirelessly. All of these systems offer software libraries that have something for everyone. While game hardware might be sophisticated and powerful, heavy emphasis is put on making it easy to use.
But how accessible are most comic books? True, anyone can pick one up and read it. But a lot of comics require outside knowledge — either of the series, the publisher’s universe, or the license the book is based upon. Most aren’t designed to be picked up and read by people who aren’t already fans. Try handing someone not familiar with comics an issue of Marvel’s Civil War or DC’s 52 and see if they can make sense out of it. Chances are good they’ll be lost within a few pages.
The comic book industry can learn a lot from the cyclical nature of the video game industry. But it’s a lesson that probably won’t be learned by the current crop of publishers. I fully expect it will be the next generation of publishers who take the industry somewhere else, and it will be those publishers who decide if things will stay the same… or if the comic book industry can wise up and be something better than it is.
Articles, Business Marketing | SeanJJordan | 
October 30, 2008 10:50 pm
2 Comments
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By Malcolm, November 7, 2008 @ 1:36 am
Yo Sean! Are you still Black Dog Clan?
Gonna be two weeks late in stores with DOG EATERS — we’re looking at Nov 26…
Keep in touch!
By Nile, November 25, 2008 @ 7:20 pm
(found site from NanoWrimo)
It is insane the way that consoles are being issued and the price. I remember reading a study about how bluetooth was only cents on the dollar to create and they were price gauging on it.
I am buying my 5 year old son a Wii, and he already has a PS2 (which we got used at WalFART for $129 a couple years ago.) Apparently they are selling Wii w/o packs for $250.
I still ave an Atari and Sega Genesis…yikes!
I go to Slackers when I get a chance to get over to O’Fallon/ Fairview to get games…cheaper that way.
I pretty much keep on kids games for now…my son loves Sonic the Hedgehog…lol. Gaming has come quite a way and as a web and graphic designer, I know from talking with a few friends that gaming is definitely always in progression.
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Comics, I usually only read manga (big InuYasha Fan…I own the InuYasha-fanfiction.com website), but my boyfriend has a bunch of comic books he has collected through the years… it is pretty impressive. My father still has some old ones from the 60s that he got as a kid!
For your series issue, in comparison, DragonBall is a case example of them prolonging it and losing ts effectiveness. Even when they brought it to television it lost a lot of that original spark. InuYasha (as I have read translations, has not), however I know from following up, they are not sure if they want to continue the television anime beyond the already 167 episodes and 4 movies. Truthfully, since I have seen all 167, I think continuing it for time would be great.
Perhaps the comic industry can hook up more with the book selling industry more and offer a section filled with enough comics…it would entice more people to come. My sister and I buy tons of manga all the time….and I pick up the manga magazines like Shojobeat and now Yen.
It is true…you would have to know the stuff. Most of the other manga outside InuYasha, I picked up from the store, read the cover, flipped a couple pages and then purchased because I thought it might be a good addition to my collection.
I know quite a few that are selling comics from their stores through their own online sites. I have designed for 2 private clients and they are power sellers on ebay.