DICE 2010: Disney's Wadsworth On Navigating 'Disruptive' New Markets With Brands

As the opening keynote for the DICE Summit 2010 in Las Vegas, Disney Interactive Media Group president Steve Wadsworth discussed the Mouse's place in video games and media, discussing the company's sharp focus on the consumer, and highlighting "disruptive" emerging markets like online, iPhone, and web-based games alongside big console titles in Disney's future. Wadsworth oversees the interactive division across online, mobile, and console games, which was combined about 18 months ago by putting together Disney's Internet Group and Disney Interactive Studios. He showcased some of the games that he oversees, including the popular acquisition Club Penguin, titles like Toy Story Mania for the Wii, the Alice In Wonderland game based on Tim Burton's movie, and big-budget titles like racer Split Second, Propaganda's upcoming Pirates Of The Caribbean console title, and Warren Spector's Epic Mickey. The Disney executive then mused that "our task has not been made easier" by the challenges faced by the console game industry. But even though we've seen "an unprecedented slowdown" in console game sales, he highlighted the rise of new platforms like the iPhone and Facebook -- even as far as interactive games within toys or Blu-ray discs -- as very exciting from the consumer's perspective. In fact, Wadsworth mused, "There's never been a better time to be a consumer of any type, but particularly interactive entertainment", because games and game-like activities have become an integrated part of all media. The diversification of the gamer, Disney believes as a company, is particularly compelling because it's not being driven solely by tech advances, it's being "driven by consumer behavior and adoption". In other words, it's not just about tech gimmicks, it's about genuine changes in play styles coupled with new technology and delivery methods. Nonetheless, the changes we're seeing are definitely "disruptive". For starters, consumers have a lot more choices, and to "rise above the clutter" and grab attention is a lot harder. In addition, many of the new experiences for consumers cost little or nothing, "obviously a business challenge". But there are some new models that everyone can follow. Firstly, Wadsworth notes a previous trend -- if you can acquire customers, and then get them to buy things on your network or in your game, they will become engaged. But nowadays, the order is switched - you acquire customers and engage them, and then they may end up purchasing things down the road. So how does Disney navigate these difficult waters? With timeless elements like "a great story and compelling characters" that Walt Disney conceptualized when he started the company decades ago, twinned with technical innovations that Disney showed with its breakthrough animated movies. Wadsworth then referenced their response -- upcoming console titles like Pirates Of The Caribbean: Armada Of The Damned, the Tron 2.0 game, and Epic Mickey, which is "going to create a whole new story about Mickey Mouse and the deep history of Disney characters over the years." He also mentioned the "over 7,000 characters with related stories" that come with the Marvel acquisition, suggesting that Marvel games would be a notable part of Disney's interactive entertainment plans going forward. How about interactive, but shared experiences? Well, the heritage of the creation of Disneyland, which has a lot of those elements within them, and is why Disney has been aggressive with kid-friendly MMO titles like ToonTown Online, Pixie Hollow, Club Penguin, and the upcoming World Of Cars Online, based on the Pixar franchise. Since Disney has quite a lock on the attention of children, Wadsworth explains what today's kids are expecting in the future of interactive entertainment. Firstly, being consummate multi-taskers and 'media sponges' -- being exposed to 11 hours of media every day -- kids want on-demand content across multiple platforms. They also want seamless communication, little gap between online and offline play, and easy ability to share media and created assets with others. Overall, today's younger users need to have all of the obstacles taken out of the way, in order to make their experience as friction-free as possible -- otherwise they'll just move on to the next thing. Wadsworth then discussed "the intense focus" on responding to the player in recent acquisition Club Penguin, with 100% of the communications handled in-house, and the customer service reps engaging personally and in-depth with the kids playing the game. At first, he said it was "a little bit alarming" to think about accepting unsolicited ideas for a big company like Disney. He contrasted it with in-house title ToonTown Online, where they explicitly did not accept ideas - "We were essentially telling our customers that we didn't want to hear what they had to say." But Disney has now learned their lesson, and believes they will listen in much more detail to their customers, even for larger console games. This is because otherwise customers will just "vote with their feet" and go elsewhere. Both feedback and analysis of how your customers are behaving are vital. Finally, the Disney exec discussed how they deal with their bigger franchises in games, explaining that in the past, these titles have "been treated as a separate and discrete experience", but this is going to change in the future. For Pirates Of The Caribbean, for example, only the story and characters have similar aspects. But how about having a continuous storyline that extends across multiple platforms, from console through DS to iPhone? This is what Disney's planning to do to "rise above the clutter". As an example, the Club Penguin Nintendo DS game that Disney launched in 2008 extends the web-based online game's experience, allowing access to an exclusive level in the virtual world for DS players. In addition, coins earned on the DS can be pushed back into the online world. As a result, the Club Penguin DS games have sold one and a half million units, and 1 billion coins have been uploaded. As an example of the cross-platform focus, Wadsworth then announced another DS title, Club Penguin: Herbert's Revenge, which will be even more closely linked to the popular kid-friendly online world and debut later this year. Answering questions from the audience on how much Disney was looking to Facebook, which doesn't seem to favor branded games right now, Wadsworth noted: "It's very easy to try to chase it all." But Disney hasn't seen the need to wade in to social network games in a major way. He said that "what I would rather do is be very good" at specific things that the company feels will pan out in the long run, but did note: "Will we be there eventually? Probably." But the Mouse has to figure out what's unique about what they offer to that particular audience.