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Becoming a community-centric content publisher

The video game world offers some valuable lessons

Following on from my last post, which began a conversation about similarities between the book publishing and gaming industries, I see the second key pivot as actually the most important one. The formats I talk about in that first post are deliverables.  They’re “Content Containers”, according to current publishing buzzword statutes. The crucial pivot for digital content industries isn’t converting to digital product – though how you handle that is undoubtedly important – it’s the power that it gives you to talk directly to consumers that will truly revolutionise the retail landscape.

Gaming across platforms

This is where some of the games industry is getting it right. Games are no longer simply played on your console or computer. Games are also played on smartphones, tablets, Smart TV’s, Facebook, and the humble browser has become a hugely important tool to reach gaming consumers on.

With this new found ubiquity have come a slew of different business models. Some braver souls than I have already predicted the death of consoles (I don’t see that yet, but boxed games that don’t offer extra value, yes), and the growth of the industry now seems inexorably linked to F2P and mobile gaming.

Many traditional games publishers have seen this and reacted accordingly. EA have been busy buying up the likes of Playfish and Popcap, whilst Sega, UbiSoft, Capcom and others have all realized the potential in those markets and have taken (albeit tentative) steps to address their product lineups accordingly. Whilst this has been a change process for traditional game publishers, others, unburdened by that old model, have leapt ahead – think DeNA, Rovio, GREE, Mind Candy, and for a while at least, Zynga.

Going direct is the only way to truly understand your customer

The real winners in this new world, are going to be those who are able to generate their own loyal customer base away from reliance on a third-party. It is no coincidence that game publishers place so much value on their Community Managers now – these people are going to become the virtual mouthpieces for entire publishing organisations and will be crucial in generating D2C business.  And do this they must.

The reason that they must is simple – long term, they need to understand their consumers better in order to cater to them with product they actually want – and sell it to them direct. For if the gatekeepers of both the consumer and the retail transaction are not the content creators, those content creators will never be in control of either revenue nor long term messaging.

This is where the parallels start to bend. There is no “spectre” of Amazon controlling everything in the games space. They are an important customer, sure, but for digital downloads, they are not currently in the game aside from the Kindle Fire. Currently, games publishers (and indeed, developers, since disintermediation is most definitely a factor here, too) have a whole host of other platforms to distribute their content on – iOS, Steam, Xbox Live, PSN, Google Play and of course their own sites, to name just a few. Certainly, there is no 70% dominant force in this market.

Here, then, games has a distinct advantage. The digital customer base is fragmented. Consumers are perfectly happy to buy from Steam one moment, XBLA the next. Initially it would seem that this makes the consumer even more difficult to track, and that is true to a certain extent. However, it also raises the possibility of owning the transaction with your own portal. EA, UbiSoft and Square Enix have already jumped in – others will surely follow.

These big games companies have loyal brand (and sometimes fanatical) followings – making leveraging the community for both research and marketing a little easier. It’s something we need to address in publishing. Some have started, but we’re nowhere near the scale we need to be to start understanding as much as Amazon does about our own readers.

Back in games, we’ve also started to see the advent of the AAA F2P titles. Many see this as the future of the console business, but at the moment, companies like Meteor are running high-spec , micro-transaction led titles on PC clients – with their own community. (The irony here is that Amazon actually runs the back-end servers for Meteor’s Hawken, so they are in the game,  just not in the distribution side right now).

Building community is the key to direct channel success

The key shift for publishers, then, is taking away a reliance on any retail partner to become a community-centric content publisher. The best way to do this, long-term, is to own the dialogue with your consumer, and maximize the revenue on any sale by cutting out the middleman.

That is the Holy Grail, and is not easy (or cheap) to achieve, and in the meantime, plenty of developers and publishers are making money from a whole range of distribution methods. They’re also building up communities – so even if they aren’t controlling the distribution, they are making the most of their brand equity and leveraging social media savvy brand evangelists to stretch that marketing and PR budget further.

So, with all that in mind, I return to my question of the hour: What lessons can book publishing learn from THQ’s fall from grace?

THQ’s current plight could easily be mirrored by any number of games and book publishers in the very near future. They could still survive, and there are some fantastic people there now, so I truly hope that is the outcome post-22nd January.

In the next post, I’m going to try to break down what happened, and the lessons that are there for all of us.

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