TribalWorks

Electronic Arts has scrapped the hostile take-over bid of Take Two Interactive.  Many suspected that EA’s main interest was in Take Two’s Grand Theft Auto franchise which is one of the most successful gaming series ever. 

Today’s decision to not pursue the bid is good news for fans of the NBA and NHL.  EA Sports (a division of EA) and 2K Sports (a division of Take Two) annually produce an NBA and NHL videogame title.  Previously, both companies produced versions of an NFL and MLB game.  However, EA secured an exclusive NFL license which prompted 2K Sports to secure an exclusive MLB license. 

The biggest losers of these exclusive agreements were the fans of the respective leagues and videogamers in general who witnessed a decline in the perceived quality of the exclusive titles.  Members of the gaming community were not shy at voicing their displeasure of the lack of attention developers were putting towards games.  This decline led many individuals to feel less connected with the league in general - leaving way for these fans to seek alternate forms of entertainment.  If the take-over bid took place, then there would no doubt be only one MLB and one NBA game produced annually.

Sports leagues should consider the impact exclusive agreements have on the tribe.  Long term financial success for the league means more than getting more licensing dollars now.  It means extending the lifetime value of each fan.  Signing exclusive video game contracts may not be consistent with this goal.

Yesterday, I watched the North Carolina Tar Heels football team destroy the Rutgers Scarlet Knights 44-12.  However, what struck me as most surprising is that by mid-way through the 3rd quarter a very large number of fans were starting to file out.  Now it could be that many fans lived in the New York area (Bronx, Brooklyn, etc) and wanted to beat the traffic on a workday evening. 

Just to give you a background, Rutgers was long considered to be among the worst teams in NCAA Division I football.  Coach Greg Schiano did a remarkable job and turned around Rutgers into a team that went to 3 straight bowl games.  On a side note, one of them was last year’s International Bowl; a game Accelteon played a role promoting.  With this change in on-field performance, Rutgers saw an increase in media attention, fan following and a surge in attendance.  (To read more about how on-field performance impacts the sports business download our report the CFL Gravity Index).

In our experience working with different sports leagues & teams and by looking at past research from other firms, there are numerous ways people segment fans.  To simplify things, I’ll classify them as die-hard or casual.  The die-hards, or the tribe, are the ones who saw this team through think and thin.  The casuals are the ones that are more fickle and their participation in team activities wavers depending on the team’s performance.

However, doing some research after last night’s game, I believe there is yet another tribe at Rutgers.  A tribe that is connected with Rutgers University, but would like to see nothing more than the Rutger’s football team fail.  Or at least be mediocre.

Why?

To stop the $102M plan to expand Rutgers Stadium.  Many students, professors and concerned stakeholders are against the plan to expand the stadium (which some called the House Ray Built, in reference to star runningback Ray Rice).  The main reasons given are that it is a poor use of funds and it is against the wishes of students.

How big is this Tribe?

It is hard to say, but one Facebook group Stop the Stadium Expansion has 1,139 members as of the time of this post.  Another blog calling itself the Friends of Rutgers Academics seems very happy with Rutger’s current on-field problems.  On a blog entry following yesterday’s game, they quoted a post made on June 28thwith their season predictions:

We expect the Rutgers losses to start against Fresno State and we anticipate that every tough opponent will throttle Schiano’s Schoolboys. By season’s end we expect Rutgers Stadium to be as empty as a cemetery at midnight in a blizzard — and watch that diminished enthusiasm crush ticket sales for the 2009 campaign. New Jersey fans have no affection for losers and they will show it by not showing up.

Regardless, of its size, this tribe seems to be quite vocal in their opposition and quite content to see their own team fail.  This is quite an interesting tribe dynamic between students who are fans of the Rutgers football team, and those students who are opposed to the stadium being expanded.

These issues are not limited to college sports only.  There are cases where sports fans wish the team playing a different sport from the same city fail.  An example of this are Toronto Argonaut fans in the mid-late 90s wanting the Blue Jays to do poorly so the Argos could get more media attention.

So not only do sports managers (Athletic Directors at major colleges and Presidents of pro teams) have to figure out how to keep their die-hards happy and how to get enough casual fans in, they now also have to worry about keeping the anti-tribe away.

The launch of the new 90210 series was met with large audiences last week.  However, the show’s second episode which aired on Tuesday dropped 30% of its viewers.

The American viewing audience for the glossy Beverly Hills, 90210remake took a sharp decline with the show’s second episode. According to U.S. Nielsen ratings, Tuesday’s broadcast on The CW saw ratings fall to 3.3 million viewers - an alarming decline of 30 per cent from the show’s 4.7-million viewers one week before.

The ratings drop-off was even more severe in Canada. According to BBM Nielsen numbers, the second broadcast of 90210 registered 664,000 viewers on Global, compared with 1.3 million for the debut. Unlike the first week, Global did not simulcast with The CW and aired it one hour later.

There are several potential reasons for this drop:

• The first episode was hyped up and brought in casual viewers along with the die-hards
  • If this is the case, then we might see the ratings hold steady over the next few weeks
• The show’s formula does not connect with its viewers (i.e. characters, story lines, etc)
  • If this is the case, then we might see the ratings continue to slide
• The new show does not connect with the die-hard tribe of the original series
  • This may mean that the show will lose its previous fans but have an opportunity to create a new tribe

I am certainly not a fan of the show, but it will be interesting to see how this one plays out over the coming weeks.

Leveraging its extensive install base, Apple is pushing sales of video games on its Touch and iPhone products through its online App Store.

Many industry think this will change the portable gaming market:

“They’ve done a great job of providing not only a great piece of hardware, but also a great consumer shopping experience,” said Travis Boatman, a vice-president in Electronic Arts Inc.’s mobile division. “The DS and the PSP are excellent game machines, but … where [Apple's products] really shine is their strength in the digital distribution experience for consumers.”

“They’re targeting a new demographic, which is awesome,” said Andrew Ayre, chief executive officer of Other Ocean Group Inc., the Prince Edward Island game development studio that created Super Monkey Ball for the iPhone.

“From a development standpoint, it’s very easy and straightforward to develop for and certainly the graphics and the features such as the touch screen and the accelerometer are pretty unique,” he said.

However, one line in the article strikes me as particularly interesting:

Apple’s devices will prove to be a greater threat to the PSP than the DS, since Sony’s device is marketed as a multimedia product aimed at an older demographic it shares with the iPhone and iPod Touch.

I am not sure why the author thinks this.  People who buy PSPs do so for the near PlayStation 2 quality of graphics and sound for games.  Sure the device can play music and movies but very few buy it for this purpose.  Similarly, people who buy an iPod or iPhone do so for its music, video and communications capabilities first.  This is not to say people who have iPhones and iPod Touches will not buy games, but I doubt would be PSP owners will rush out instead to get an Apple device to play games. 

In my opinion, PSP gamers form a different tribe than Apple device gamers.

An interesting article suggesting that an earlier prediction that PC gaming would die soon after the release of the Xbox 360 and PS3 is wrong. Certainly some developers have chosen to scrap the PC versions of games.

And this year, Electronic Arts decided to kill the PC versions of many of its popular sports titles, including Madden NFL 09, Tiger Woods PGA Tour and NBA Live. LucasArts is releasing The Force Unleashed, its new Star Wars title, on every platform except PC.

Even developers who built their companies by producing games for computers are now turning to console development.

Crytek’s Stan Huebler has indicated that his company, which stunned the industry with its PC-processing intensive Crysis, won’t be making any more PC exclusive titles, and id Software’s John Carmack told Tom’s Hardware Guide that one reason his company, the creator of Doom and Quake, is developing games for consoles is because “the sales numbers on the PC are not what they used to be and are not what they are on the consoles.”

However, the PC market seems to be going online both in terms of distribution and a richer multi-player experience.

The reason for that, says Rahul Sood, founder of the specialty computer manufacturer VoodooPC and now chief technology officer for Hewlett Packard’s global gaming business, is that the distribution model for PC games is changing.

“It’s going online,” he says. “There’s a much higher distribution of PC games online than there ever was before, and it’s growing.”

The console and PC markets are separating; it seems that a consumer tribe around PC games may solidify.  Though most people own a PC or laptop at home, few possess the latest systems capable of running today’s games.  Thus, in the coming months and years it would not surprise me to see a more us vs. them attitude form among PC gamers.

Key questions to consider:

• Will we see game developers continue to gravitate to either consoles or PC?  Or will the sway between the two areas as the article suggests?
• How many people are die-hard console owners, die-hard PC gamers and how many are both?

Let the games begin…

We are currently working on our next article which should be released in our newsletter in about 4-5 weeks.  Unlike our previous newsletters, this one will be a series of 2-3 separate articles (which will be release a few months apart) that will focus on one case. 

The case will revolve around a small sized brand that competes against leading multinationals.  This will demonstrate how a brand with a limited budget can effectively win against strong competitors using the tribal approach.

In order to ensure you are one of the first to get a copy of the article, please enter your email address under The Accelteon Newsletter section on the right side of the page.

We will provide more information as we get closer to the release date.

P&G’s Olay is launching an online pilot site called The Salon which will form a community of women who like to talk about beauty.  Furthermore, members get the opportunity to receive samples and get the chance to try new P&G Beauty products.

Currently, P&G seems to be sending invites for the pilot project to their Club Olay e-newsletter readers.  By building this site, the Olay brand is using various tribal elements to connect their consumers with the brand and each other through the discussion forum. 

If this pilot project goes well, then it is advisable that Olay builds an overall Tribal Strategy which not only leverages multiple media but also encompasses other aspects of the business.

Popcuts.com is an online music store which sells songs for 99 cents a piece.  What sets Popcuts apart from its competitors is that they give a portion of the song’s sales to consumers who already downloaded the song. 

Berkeley, Calif.-based Popcuts, which publicly launched its website in early August, charges users 99 cents a song. Thereafter, whenever someone else buys the same song, those who have already bought it get paid in credit that can be redeemed for more Popcuts music. The earlier you buy a song, the larger your cut of future sales.

And while credit is currently the only payment option, the site’s founders hope to eventually pay users in cash, too.

I think this is a very interesting approach.  Although there is nothing new to having new bands grow in popularity through viral marketing campaigns and community sites, Popcuts.com is giving music lovers the added incentive to promote their favourite band.  The site even has a listing of the top trendsetters - those who are one of the first to download a popular song; thus, acknowledging potential tribal leaders. 

Popcuts.com seems to have a model which will enable the growth of a potentially valuable consumer tribe.

EBay became one of the latest companies to join in on the movement to combine good business sense with social and environmental causes.  Their Worldofgood.com website features products that have social benefits.

EBay developed the site with World of Good Inc., a startup focused on “ethical supply chains” behind consumer products, and licensed the group’s name for the marketplace. World of Good will get a share of the revenue from the site, which had been operating for the past six months as an online community focused on the social impact of business.

The site will sell fixed-price goods that purportedly have some positive effect on people and the planet. The goal is to help consumers align their social values with their shopping decisions, WorldofGood.com general manager Robert Chatwani said.

The benefit of working with World of Good Inc. is that EBay is leveraging the goodwill generated and community following of the organization.  Will there be a big enough market?  The article goes on to state:

Already the market for products that emphasize social and environmental awareness is growing. Mr. Chatwani cited the Natural Marketing Institute’s estimate that the U.S. market for such goods was $209-billion (U.S.) in 2005, and the group projects that will rise to $420-billion in 2010.

And while there are plenty of places to buy such items already, eBay and its 84.5 million active users might dramatically increase awareness for artisans. WorldofGood.com items will also be cross-listed on eBay proper, blended into standard search results.

This has the potential to bring together two large communities (EBayers and the socially aware) which may result in a win-win situation for both.

Recent changesto the mycokerewards.com Internet loyalty program seem to suggest that Coke is shifting its focus to acquiring new consumers instead of doing what its original intent was - to reward loyal consumers.  Several people are disappointed with the changes because they have been saving up points for large prizes such as a TV.

Some members of the My Coke Rewards program complain that they have amassed hundreds of bottle-cap codes in exchange for points, only to have some of the expensive items that they have been saving for become suddenly unavailable.

Eric Bellville, a 20-year-old lifeguard in Clermont, Fla., has collected about 6,000 points (that’s around 2,000 standard Coke caps). Instead of being able to get some of the most expensive items by using his points, he is now only able to enter a sweepstakes to win them.

“I don’t like the change with the system,” Mr. Bellville wrote in an e-mail message. “It seems that Coke is being a bit misleading, because now it is much harder to get higher value prizes.”

A high-definition television, for example, was once available for some 20,000 points. Because people can enter only 10 codes a day online, it would have taken about two years of nonstop participation to win the television. Now, members can still win the TV, but only three points are required to enter the drawing.

By making it easier to get the aspirational prizes, Coke may entice more people to sign up.  However, this may come at a risk of turning off their most loyal and passionate brand cheerleaders.  It will be interesting to see over the coming weeks the reaction among the members at large.