Paul Rhodes

Learning from a video game publisher’s demise

An over-reliance on one customer, one business model or one market segment is toxic to a content company

So, it’s done. After years of speculation, THQ went under the Chapter 11 auction hammer, most of it going to rival publishers, with the majority of the remaining employees losing their jobs. (THQ’s letter to its employees, along with who got what, is here).

First up – a disclaimer – I’m an outsider looking in. Without being there, it is hard to discern what led them to make the decisions they made. Also, I had friends at THQ, and what has happened to them is lamentable. Those employees have had no input whatsoever into this post. In addition – there has been a lot of press on this case, do check out this link or simply Google “THQ bankrupt” to find all manner of opinions and “facts” on what really happened. Without having access to the books and interviewing staff, it’s difficult to point fingers or truly understand what happened.

However – we can look at the decay in a wider business sense, with some key takeaways as to what really takes to keep a content company afloat.

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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.

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Lightning strikes twice: The first digital pivot

Or, why the games industry doesn’t always get it right

We’re often told in publishing to look to other media for inspiration for the digital transition. Indeed, I have been an often vocal and staunch supporter of bringing in skills from other industries to help us build the skillsets we need to survive the changeover and there is certainly still a talent gap.

However, other media industries don’t always get it right. Music certainly didn’t, whilst film is struggling to balance the cinema/boxed goods model against the increasing on-demand requirements of its core userbase, TV is having to deal with dramatically falling ad revenues and time-shift boxes which cut out the advertising.

Games, though – those guys are digital natives, right? If there was ever an industry built to withstand a shift to digital distribution, the game industry is it, surely?

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