Companies Under Intense Pressure to Increase Sales and Change Purchasing Patterns

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NEW YORK ( -- Because their continued annual sales growth demands they develop a huge audience of enthusiasts motivated to buy new games, game makers are
Despite the explosive growth of the industry, game makers are under heavy pressure to develop a vast audience motivated to constantly purchases new games.
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turning to ever larger festival-like events that offer consumers intensive hands-on sampling of their wares.

Game publishers “need people who are going to buy games constantly," said Suzie Reider, senior vice president of sales and marketing at CNET games and entertainment. “They’ve got to expand their market.” GameSpot, a CNET division, is organizing the Games And Music Experience (GAME), a massive festival that mixes concerts with a trade-show-like game-sampling expo in San Francisco's sprawling Moscone Center.

Clear Channel Entertainment is producing GAME.

'Entertainment destination'
The Dec. 2-4 event is the first of six slated for cities across the country next year. The marketing effort is primarily aimed at a young (18-to-24), hard-core male gamer demographic, but “we expect our target audience to show up with several friends and girlfriends in tow,” Ms. Reider said. Over time, “GAME will be an attractive entertainment destination for women and older gamers as well.”

Giant gaming software company Electronic Arts will be a sponsor. Additional sponsors are currently in negotiations. Besides game publishers, GameSpot is targeting non-gaming marketers for a chance to get in front of these hard-to-reach young adults. Atlantic Records is securing acts for the event. Bands that are in negotiations are The Donnas, Louis XIV, Handsome Boy Modeling School and Hot Action Cop. Atlantic is also providing audio content for the radio on the music page of GameSpot's site.

The marketing budget for the festival is $3.5 million, according to the company, and the event will be promoted through broadcast TV (with KTVU, a San Francisco Fox affiliate) and cable (including MTV, Spike, ESPNE, Sci-Fi and comedy channels), and radio, print and outdoor marketing aimed at the Bay Area. E-mail promotions will blast to GameSpot registered members and Clear Channel ticket buyers on a biweekly basis.

Skyrocketing costs
The primary force driving such mushrooming event-marketing strategies is the skyrocketing cost of producing digital games. As games become ever more sophisticated and take on many of the elements and techniques of moviemaking, they have likewise become increasingly expensive to create. Analysts say the cost for creating major games is from $10 million to $20 million -- and rising fast. At the same time game companies have become hot investments whose stockholders have high expectations. For both reasons, game makers must find ways to expand and deepen their audience of paying customers.

Mike Vorhaus, managing director of market research company Frank Magid & Associates, said that the "market demands that these be growth companies. They need to grow revenue to live up to Wall Street’s expectations.”

GAME's Ms. Reider expects between 25,000 to 45,000 people to show up for the December weekend happening. The tactic will enable gaming consumers to sample all the various game platforms and programs they've always wanted to try. Games will be organized by genre, not by company. There will be military, urban, sci-fi, fantasy, sports, racing and fighting. “It will be very themed-oriented with a high production value,” Ms. Reider said.

There will also be game-play zones for PC-based games and portable games that are played on mobile and handheld devices. Attendees pay $20 for a day or $35 for the weekend.

GameTap Download Festival
In a second similar event in San Francisco on Oct. 8, Turner Broadcasting’s new GameTap, a broadband video game application and library launching that month, will be the presenting sponsor of the Download Festival, a Clear Channel Entertainment event imported from the U.K. for the first time.

The Download Festival gets its name from the library of digital music content -- tracks and videos from the concert's lineup -- available to attendees for download. Napster is the festival's official digital music service and will power the Download Vault, housed on the official festival Web site.

Consumers will pay $30 to $50 at Silicon Valley’s Shoreline Amphitheatre to listen to bands The Killers and Modest Mouse -- and sample GameTap’s downloadable application and library of video games, ranging from Pong to Tony Hawk’s Pro Skater 2.

GameTap is using the Download Festival to broaden its demographic. GameTap’s library, created as a post-retail destination for classic and contemporary video games, boasts a sweeping range of titles, and wants to tap into a much larger audience than is attracted to Xbox or PlayStation 2. Its marketing efforts have segmented the target audience into “thrills,” “chills” and “tag-a-longs.” Massachusetts advertising agency Mullen, part of Interpublic Group of Cos., is handling the creative for the campaign.

“We’ve divided the market attitudinally,” said Dennis Quinn, who, as executive vice president of new-business development at Turner, is heading the initiative. “The active-casual gamer is a person who loves video games and has played them in the past but whose life has gotten much busier and it’s harder to fit them in. GameTap is great for them.”

Mainstream gamers
Thrills skew male and about 45% are married. They play for the competition and camaraderie and, when the children go to bed, stay up and practice. Mr. Quinn describes Chills as a Thrill’s antithesis -- 80% are women, who might come home, grab the bills out of the mailbox and relax with a glass of wine and a video game. Tag-a-Longs, meanwhile, are split between genders, are predominantly married and are likely to spend time with games because of the children -- they think of gaming as the modern-day version of throwing around a football, Mr. Quinn said.

GameTap charges a $14.95 monthly subscription to access its library. While focus group tests showed the concept was well-received in theory, intent to purchase tripled after sampling.

“It was an epiphany that we had to develop and associate ourselves with some communication channel where people got a chance to put their hands on it and play with it,” Mr. Quinn said. The digital-music-themed Download Festival, he said, was the perfect fit for a broadband-reliant business.

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