GOF 2008: Edery - Devs Need To Watch Advergaming, Corporate Training

As the ongoing Ontario Game Summit segued into the second annual GameON: Finance event, Xbox Live worldwide games portfolio planner David Edery opened with a warning. He suggested that it's essential for game developers to explore projects outside of traditional industry boundaries if they are to thrive -- both in terms of revenue and for the industry's betterment over all. Edery shared ideas and stats from his upcoming book, titled Changing The Game: How Video Games Are Transforming The Future Of Business. He began his Gamasutra-attended talk with a well-known statistic: that the games industry is worth over $40 billion worldwide. "We’ve all heard that number; it’s roughly a pretty good estimate," says Edery. "The games industry is bigger than global box office receipts -- though not ‘bigger than Hollywood’ when you include DVD sales, et cetera -- but compare that number to the fact that corporate training is worth $46 billion for corporate training in the US." "Now compare it to the fact that advertising is a $270 billion industry in the US," he added -- and claimed that "small or mid-size" developers who don't seek a piece of these additional pies would be "putting themselves at real risk" in terms of their future revenues. Advert Convert From BP-branded solar farms in Sim City Societies to iPods and Playboy in Metal Gear Solid 4, says Edery, advertising and games are already closely tied together. "Advertisers are potentially willing to pay six, even seven figures to get their brand into the right game at the right time," he said, because "it’s nothing for a company like McDonalds to drop a few million dollars on a game; their CEO sneezes that out without thinking on an average morning." In fact, this kind of money is being spent without due oversight, he asserted. "Advertising-based virtual worlds are shaking up this industry, but they’re all very tedious. They have the exact same meta-game, the same boring re-skinned versions of Bejeweled. They are incredibly boring, and very poor representations of the brands." Searching for a game that offered more, Edery found Chevy's Cobalt Labs. "The experience itself is a remarkably complete little car modding and racing game, but here’s the interesting thing -- when you start modding your car, Chevy is tracking what you bought for you car and in what order." "So Chevy might know that a 20-25 year old guy from California is most interested in buying his car a nice spoiler before buying new tires. That’s incredibly useful information -- and you almost never see that in advergaming." And a game like that probably came at little cost to Chevrolet, and is "probably the most cost effective advertising they’ve ever done," Edery added. Returns for advertisers who have chosen to get involved in already-established virtual worlds have been similarly positive, Edery continued. Though Nexon's MapleStory is widely known in the broader games industry for its willingness to embrace alternative business models, Edery called the game's forays into advertising -- dabbling in featuring Best Buy and 7-11 stores within the medieval-themed world -- the "wrong way" to do it. And yet, said Edery, Nexon has sold more virtual Mini Coopers within its Kart Rider online racing game than BMW sells real ones; Habbo Hotel sells more furniture than Ikea, and Sears' back-to-school clothing range sold 850,000 virtual items within 16 days in Zwinky. "Even though [the advertisers] almost certainly didn’t see a cent from that revenue they’re probably delirious with happiness; how else could you get that much exposure so easily?" Though he felt picking the U.S. Army's America's Army might be a "controversial" example, Edery was still deeply enthusiastic about its lessons. "The US military spends $1.6 billion on advertising, and America’s Army cost a fourth of a percent of that. But it turns out that 30 percent of all Americans -- not just Americans that have played the game -- aged 16-24 have a more positive impression of the army because of this game." "They’ve worked out that this game has more effect than all of their other advertising combined. You may not like this game, but you have to respect the power of it." Rise of the Virtual Leaders Moving on, Edery argued that there are "a lot more possibilities in corporate training and recruiting than just simulations and multiple-choice questionnaires." Edery ran the audience through a series of examples that he felt best explained this: He demonstrated Rise of the Shadow Specters, an adventure game developed by Sun Microsystem as a metaphor for their company’s processes; Harvard Business School’s Everest, a leadership and team multiplayer simulation; and Virtual Leader, which teaches leadership skills in a safe environment. "This is the kind of training that you don’t really hear about," Edery said, "but in the example of Virtual Leader, managers who played the game have been revealed in studies to be more successful in dealing with clients and their staff, and this is literally the only game of its kind that I know of!" "There’s no reason why there shouldn’t be more competition in these spaces." Get Involved -- Before Proctor And Gamble Forces You To "You might be thinking, thanks Dave that’s great, but I don’t care, I just want to make games for fun," Edery said. "But I’d argue that that thinking isn’t healthy, particularly because of the shocking amount of free content that is now out there for gamers –- everything from microtransaction-based free-to-play titles, through ad-supported casual portals, to user-created games on things like Kongregate." To "put a long story short," he warned, "be wary of the day Proctor & Gamble consider that gaming is important enough that they should get involved." "One day they will, because there are too many studies that tell them it is important, and spending even $10 million on a game will not be a big deal to them. Your expensive, triple-A title could be nothing compared to what they’ll want to give away for free." "You can try to fight that, or you can get involved before you have to. You can make these people your friends or you can make them your enemies."