In Defense of Episodic Content, Again

Last week, the ever-outspoken Mark Rein (VP, Epic Games) publicly attacked the viability of episodic gaming. His arguments, while somewhat emotional, were nevertheless a bit different from those I’ve heard in the past, which leads me to write yet another defense of this emerging business model. The first of Rein’s arguments:

Customers are supposed to buy half a game for $20, then wait six months for an episode? When I put a game down, I want to try a new one. Episodic games that offer faster turnaround will inevitably be using a lot of recycled content, walking through the same environments and shooting the same enemies with the same weapons.

Where is the evidence to suggest that consumers won’t wait more than X days for new episodes? They wait months between television seasons. They wait years between new releases of game and movies franchises. Fans often fill the time gap between content episodes by replaying old content and by creating new content (fan fiction, art, mods — you name it.) Savvy game developers can take advantage of both the former and the latter.

The argument that consumers won’t tolerate “the same environments” also strikes me as a little odd. Ever seen a typical TV sitcom? The same characters, in the same extremely limited environments (the home, the coffee shop, etc) day after day. Of course, there are major differences between sitcoms and games (and what consumers expect of them), but my point is: the environment is not as important as what is happening within the environment. Nintendo has figured this out. Mark Rein hasn’t.

(By the way, some very popular AAA games feature some pretty monotonous environments and enemies. Remember the endless look-alike corridors in Halo? Or the relatively small variety of enemy types in FEAR?)

Furthermore, let’s say for argument’s sake that consumers really do demand new environments every three months. A well-funded developer could set up multiple teams (perhaps offshore) that would concurrently develop these environments — or at least, the assets for them.

Lastly, a little reminder: not every game is a 1st person shooter. Episodic gaming’s fate is not and should not be tied to a single genre.

They’re competing against massive marketing budgets. Distribution without marketing is worthless. You can’t buy retail marketing with a wholesale price of $15.

Mr. Rein hasn’t been keeping up with research studies that show how relatively ineffective most game marketing is (vs. word of mouth, which is profoundly important.) He also hasn’t internalized the lessons of the long tail. Digitally-distributed episodic games have the potential to build dedicated fan-bases that grow organically. Cutting out retailers may make it more difficult to reach a mass audience, but it also puts more dollars per unit into the developer’s pocket, which means fewer sales to breakeven. (BTW, I’m not totally dismissing the importance of marketing — just emphasizing the importance of buzz.)

But all of that is besides the point. This is a simple math problem. If publishers think they can create a viable episodic franchise that, over a two year period, will generate more dollars per hour of content than the typical game and expansion, then they absolutely can spend a large sum of money marketing the “pilot” episode. Isn’t this how new TV shows have been created for decades? And, if you want to be more conservative, you can kick off an episodic franchise with a full-price, full-sized game (ala Half Life), rather than a pilot episode.

Coincidentally, while I was writing this editorial, a friend of mine sent me an email questioning the price of Half-Life 2: Episode One (in relation to Oblivion, which offers far more hours of gameplay per dollar). Here’s what I wrote back:

“Utility” is more than hours of gameplay per dollar. It’s “satisfying moments” per hour per dollar (although even that can be misleading.

A fair number of consumers don’t have the time to enjoy a game like Oblivion (and especially a game like WoW) even if they want to. The age of the average gamer is now around 30. Plenty of people with young kids and hectic jobs. Some of them want to experience a good story and great gameplay in the short period of time they have available, and they’ll pay for it. And some people (regardless of their age or free-time) will pay just because they’re hooked on the franchise.

I pay $11 to see a two-hour movie. Why wouldn’t I pay less than twice that for a five hour video game, if that game is great, and if I’m hooked into the story (as many people are in the case of Half Life?)

That said, I’d agree that $20 seems excessive. I would have paid $14.99 more readily. I wonder if Valve did sufficient market testing? (If anyone from Valve is reading this, I’d love to chat about what sort of market research you performed, in general!)

PS. My usual disclaimer: I can’t say for certain that episodic gaming will ultimately prove viable and/or popular. I’m simply unconvinced by naysayers who as of yet have failed to make a compelling case against the model. Why not withhold judgement till after a few more serious attempts have been made?

Update: a friend just sent me a link with a complete transcript of Mark Rein’s comments, plus quotes from Q&A afterwards. It makes him sound more reasonable, though I still disagree with him.

10 responses to “In Defense of Episodic Content, Again

  1. Mr. Rein hasn’t been keeping up with research studies that show how relatively ineffective most game marketing is (vs. word of mouth, which is profoundly important.)

    The Magid study suggests that advertising, not marketing, is a costly and ineffective brand-building tool. Advertising is a function of marketing, but they’re not the same. Marketing is much wider and deeper in scope than currently practiced in interactive entertainment. Word of mouth and branding, for example, are marketing and public relations practices. Today’s typical marketing practices for games are underdeveloped. That makes sense to the age of this industry.

    Unfortunately, there seems to be little growth in game marketing, no thought leaders, and few advocates for better marketing practices. Thankfully, the MI6 Game Marketing Conference provides us an outlet from which to push for change. I’m also working on establishing another channel from within the IGDA…

  2. Hi Morgan,

    Write a post quickly, get sloppy with your word choice, and what does it get you? Back-talk. *grin*

    Thanks for forcing me to clarify. I didn’t mean to collectively downplay all marketing forms; in fact, I’m more interested in the positive case for episodic gaming (i.e. maybe it can help developers and publishers do a better job of capturing mindshare, ala TV).

  3. Bryan Cashman

    Eventually we may have models to support this episodic ecosystem, but I don’t know if the numbers add up just yet. I think the strength of Rein’s argument is highlighting that episodic gaming isn’t necessarily cheaper or easier to sell than full packaged titles. It may not be the independent game developer boom many are hoping for.

    If we’re talking about episodes for hard-core games, you’ll either have a few mass-marketed titles or more niche titles selling on word of mouth and brand-recognition. Mass marketing will more likely be reserved for established titles, whose brand recognition might be better off focused on annual complete products to get the largest price tag. Niche titles might sell off word of mouth, but that’s still risky as there are few proven methods to generate it — we’ve all seen the figures suggesting no link between game review scores and actual sales.

    If you’re talking about episodic games for the casual masses, then you need to make it easy and centralized. Casual gamers don’t want to explore a jungle for their episodes. Just look at how mobile games are suffering because they rely on unorganized virtual stores. And once a centralized network wins an audience to sell these titles, margins are going to get hit hard by an aggregator and once again you’re losing a portion of sales to a controlling “retailer”. Perhaps this creates an opportunity for a publisher to act as an aggregator?

    For a developer, where’s the added value of removing the retailer and selling less for less (although you hopefully can develop for much less as well)? You lose your distribution model, lose an established point of contact with your customer, and lose a higher price tag. In exchange, you have to find a new way to distribute without hitting margins, and have to find another way to get the attention of prospective customers. Some can do it, and with a name and audience that Half Life has, it may be easy. But for a little guy, one might be better off with the status quo.

    At the same time, as you hinted, episodic gaming could be great for new types of games and new players. Bundling a first episode with other products (in other industries as well) could be a great way to create a strong unique audience. Episodic games with free user-generated content could create a compelling user community that could step over the marketing of the industry titans of today. In the end, maybe it all depends how you attack it.

  4. > For a developer, where’s the added value of removing the retailer
    > and selling less for less

    You aren’t necessarily “selling for less”. There is potential to earn significantly more dollars per hour of content (re: my comments about utility at the end of the post.) It depends on the franchise, the developer, and the fan community.

  5. Marketers in interactive entertainment need to serve customers (buyers) in addition to consumers (users). Serving both segments appears to be a challenge.

    For example, the Steam distribution platform does not appear to differentiate customers and consumers. Where are the "gift order" features? How would I purchase a subscription to a game delivered by Steam for a friend or family member? If I could order gifts, would my friend or family member need to be registered with Steam too? Or could I send the subscription via e-mail? Or via snail mail? Or via an instant messenger? Or perhaps even via MySpace?

    By the way, Dallas-based Ritual Entertainment is the developer of SiN Episodes, which is episodically purchased and delivered to customers via the Steam distribution platform.

  6. The other thing I attribute to episodic content is: at least it’s different. Everybody and their mother is bemoaning the lack of creativity in the game industry, and episodic content, while not the most original idea, is at least a departure from the norm.

    Ironically, it’s middleware companies like Epic that are enabling episodic content. With so much functionality right out of the box, developers now have the financial freedom to create a ‘pilot’ episode without losing too much time and money. Then we could break the cycle of ‘every game has to be a hit’.

  7. Breath — I like that perspective on the issue.

  8. Then we could break the cycle of ‘every game has to be a hit’.

    I don’t think so. Look at film and television. For the most part, the focus in Hollywood is on generating blockbuster properties whereas in television the focus is on generating the highest rated programs. The films and shows that bomb are simply cancelled. Episodic content is not an excuse for low-quality and/or unsuccessful products. Episodic content that sucks will still get cancelled. Entertainment property developers should always be striving to produce the highest quality work that they would be proud to show off in their portfolio.

  9. Entertainment property developers should always be striving to produce the highest quality work that they would be proud to show off in their portfolio.

    Morgan — I think that goes without saying. I think what Breath was trying to say is that episodic could lower up-front development costs at least somewhat (certainly not 80%, but not 0% either) and, as a result, permit a little more experimentation. Experimentation and “the production of low-quality products” are not necessarily the same. 😉

  10. Thanks, Dave, that’s exactly what I meant. My understanding is that a major part of game development costs are in content creation. If you can create a 5-hour episode rather than a 40-hour game, you’ve just reduced the financial risk involved.

    It’s worth noting that Hollywood is also in a ‘Creativity Crisis’, to which is attributed the slumping dvd and box-office sales. I think that the constant comparison to the movie industrie has led the game industry into exactly the same predicament. The game industry isn’t going to become the next Hollywood, and pretty soon people will begin to realize that video games are a different type of thing, and don’t have to follow the same rules.

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