Category Archives: Video Games

Fantasy Football 2010

NFL KickoffIt’s that time of year again; time to devote your late morning weekends to setting and locking your fantasy football rosters in order to win the weekend’s matchups.  I write this post each year at the beginning of the season and it’s fun to go back to see previous posts and see how things have changed.

I’m in 3 leagues this year, which is 1 more than I’m used to.  I’ve found that 2 leagues can sometimes be bullish to manage but I may be totally in over my head with 3 leagues especially with a 22 month old and a new baby being born any second.

I’ve had a hard time this year figuring out which research I’m subscribing to:  last year I subscribed to Rotowire and The Huddle but this year, I’ve only subscribed to Rotowire.  I certainly think there is an opportunity to help people select which research they want to subscribe to as it’s all confusing to me. (que for entrepreneurs)  Back in 2008, I tried to visualize the statistics with a project I called GoalLine.tv but realized quickly that I didn’t have the time (though could easily bring it back with some Mechanical Turks – anyone want to help?)

What’s exciting me about this season is the amount of national TV advertisers that have taken to adding fantasy football into their creative strategy.  Brands are now recognizing that there are millions of fantasy sports fans and that the opportunity to bond with us is a big and often missed opportunity.

Lastly, I still don’t see enough innovation within the fantasy football space.  While there are a few more companies doing casual mini-games this year, I still don’t see the dominant players emerging.   Would love to hear about new companies tackling the space…as this is an area that I’ve been passionate about for some time.

Oh – and make sure you tune into tonight’s Minnesota/New Orleans game… the Dave Matthews Band is performing!

The Positives of Tough Times: Revenue Innovation at it's Finest

  • In good times, advertising dollars could be the primary revenue stream of many companies, especially in the digital media world.
  • In the tough times, advertising dollars are a revenue stream of many companies, but companies must diversify their revenues beyond ad dollars.

In these tough times, I’m excited about companies who can create new revenue streams or fine tune their existing streams.

In the video game world, game developers and publishers were selling their product on store shelves and their margins were falling fast.  One of the main reasons margins were falling is because game development costs were rising due to the next gen consoles (PS3, XBox 360, Wii).  We created IGA Worldwide to help game developers/publishers recognize new revenue sources (ad dollars).  Other people created virtual goods platforms and in-game messaging systems.  Entrepreneurship at it’s finest.

Like I said earlier, I’m excited about the new potential revenue sources that are/will be created for the digital media world.

Retail Game Cards

Such a genius business.  Extracted from the original interview.

And why do retailers love these cards? The economics work in their favor.

Now, there’s an interesting fact about these cards. Retailers love them over any other product they have in their store, because the cards themselves don’t take up any inventory.

They’re not activated until they’re purchased, so they don’t sit on the balance sheet of the retailer. They feel like “free money” to retailers. So it’s a very positive business for retailers to get into, and it really lowers the bar for any retailers who are unsure about it, they don’t need to worry about losing money on it.

The really big untapped market for these digital media companies is gift giving. No matter how much someone loves an online world no one is going to say “hey, merry Christmas. I logged into your account and gave you 25 bucks.” Not to mention the impulse buy.

Total Speculation Post: Virtual Worlds

Sony has launched Sony Home, their virtual world enabling their community of users to interact with each other in a “game like” setting.  Apple is now toying with opening a store in Second Life (speculation).  Will this mean that ultimately, they will acquire Second Life and roll it out as their communications platform for their computers?  Will it be the next iteration of iChat?

One thing that we have learned is that people do not have have time to manage identities in multiple virtual worlds at the same time. If you are engaged in Habbo Hotel, then chances are, you don’t have time for Second Life.  If you’re playing World of Warcraft, then you may not have time to utilize IMVU.  Also, many of the previous brands who have released their wares into Second Life have all abandoned them after it being all the hype (front page of NY Times, etc).

I’m curious to see how this plays out.   What are your thoughts?

In Zurich: Recap of Speech and Pictures

Darren Herman SpeechI took an 8 hour flight from JFK to Zurich, Switzerland to participate in a conference at the GDI Institute on digital media and my portion:  the role of video games in culture and business.  While I have history in the in-game advertising industry, I didn’t focus the presentation on this.  I tried to talk about the macro-trends in the video game industry, some of which I posted in early October on this blog.

I spoke solely on in-game advertising at the GDI Institute in 2005 and the crowd really got into it.  Lots of great questions and insights that were shared amongst the few hundred in attendance.  As I noted above, maybe 10% of the presentation this time around talked about in-game advertising but the real time was spent with trends.  In-game advertising is part of a larger trend, which is finding ways to monetize games through the use of everpresent connectivity.  With broadband connectivity being harnessed by consoles, a new ecosystem of monetization opens up (skill based wagering, in-game advertising, virtual goods, subscriptions, RMT, etc).

One of the othe rmain topics I spoke about was about video game culture.  Look at what Guitar Hero and Rockstar are doing for fans.  The Nintendo Wii as well.  Toyota’s commercial utilizing World of Warcraft like content.  Games are finally being socially accepted which is opening up a whole creative market.

We had a fantastic discussion about this last night (as I was trying not to fall asleep due to timezone differences) and really enjoyed meeting a lot of new people.  Had lunch today with a gentleman I met last night and we discussed the presentation further.

For those of you who want to see some pictures of Zurich, I posted some in my Flickr gallery.

Business Model Adaptation: Digital Distribution

There are two companies that I’ve been watching closely, GameStop (GME) and NetFlix (NFLX) because their current business model has about 3-5 years before they begin seeing significant decreases in their revenue.  Currently, the two of them account for over $10.58billion worth of market cap so as investors and consumers, we certainly like them.

Their current business model needs to change.  Digital distribution of files (games or movies) are not “if” but “when” and as long as it’s easy for the consumer to download.  GameStop sells video games and peripherals in their retail stores but as games become distributed on the Xbox Live, Sony PS3, and Wii platforms, the need to walk down the street to a retail store will become less and less.

NetFlix is experiencing business model disruption because I can access movies on-demand from my cable carrier and watch whatever I’d like, on demand.  It’s only a matter of time until my cable carrier has enough movie inventory available for me to watch that NetFlix becomes extinct.

In October 2006, GameStop publicly recognized this issue and announced the opening of their digital distribution service.   In January 2007, NetFlix made their respective announcement about digital distribution.

I’d like to see one mega-store that has everything online that can be downloaded.  Why seperate out music from movies and games?  Why not all together?  Is it going to come down to rights?  Will Sony go in one direction and EA go in another?  If so, the market is going to be fragmented and you’ll have bidders trying to “buy” inventory from these respective rights holders.

Also, keep your eye on the ecosystem of digital distribution.   Who provides the infrastructure to enable the distribution of digital downloads to happen?  The storage? Bandwidth?  Payments?  Rights? 

I’m curious to see how it plays out.

Ads Inspired by Video Games

If you’re one of the millions of Warcraft fans (video game) out there, then this Toyota commercial makes you smile. In the background, you hear “there are no trucks in World of Warcraft” which adds validity to the commercial and protects the game. I’m sure the Creative Director on the account is a fan of Leeroy Jenkins, where the inspiration of this video is derived.

 

This isn’t the first time that we’re seeing a brand using World of Warcraft as inspiration for a commercial. Check out the Coke commercial that appeared in Japan:

The commercials aren’t just viewed on television. According to YouTube, there have been over 1.5M views of these commercials. Totally opt-in. Impressive.

An Insiders Look at the Video Game Industry

The video game industry is going through some monumental changes and I thought I’d shed some light on them from the inside. With that said, I decided to whip up a presentation that looks at many of the different areas of the industry including many of the trends that are occuring.

The presentation is geared towards the following:

  • If you work at a media co. looking to acquire in this sector
  • If you work at an ad agency or brand trying to make sense of the video game space
  • If you’re a game publisher and looking to expand your product line and features
  • If you’re a game publisher trying to make sense of the macro industry trends
  • If you’re an investor, trying to figure out which are of the industry is hot

Please note that I purposely left out IGA Worldwide, a company that I co-founded a few years back. The reason why I left the company out of the presentation is that some readers would think that I made the presentation solely to hype the company. I tried to be as company-agnostic as possible, to give readers a non-biased view on the games industry.

I welcome all commentary and criticism. Please leave a comment on the blog or shoot me an email. I promise to respond to each comment individually.

I think we’re in an extremely exciting time with Halo 3 bringing in $170M on the first day, Areae launching Metaplace, and Habbo & Tencent proving out the virtual goods model. Who said games aren’t fun? :)

The presentation is below, and hosted on slideshare (if you’d like to view it there):

 

 

Sports & Game Shows, Sign Me Up

I’m a huge fan of sports and happen to like game shows… so when Electronic Arts announced their upcoming game, GameShow, for whatever reason, I didn’t take notice. Not many people did. However, lets look at it as it’s pretty unique and cool.

First off, IGN reviews GameShow here. It’s a free to play, downloadable PC game, that a live moderator asks trivia questions in the form of streaming video, audio, and text. You get points for right/wrong questions and can win prizes and schwag from advertisers/sponsors. Initially, it’s sports themed and may have sports celebrities partaking as moderators, but I do not see why they can’t extend the product line into other areas.

There is a game that we like to play when visiting Peabody’s Bar in Saratoga Springs… NTN Trivia. I’m going to assume it’s similar in the questions area, but different as there is no social networking component to NTN. I’m sure GameShow will take advantage of avatars, social networks, etc.

I’m predicting that this title will do fairly well. Not sure how EA is going to provide a live moderator 24/7, but I’m sure they’ll figure something out.