Disgustingly, this is also true of big pharmaceuticals. They spend close to 2:1 marketing to research. Given that marketing cures is not something that you need to do, a sick person will come looking for it, one has to wonder why they need to spend such massive (we're talking billions here) amounts of money on, and why.
Well, after having spent hours with many pharma reps, the answer seems to be that they promote their brands over generics. Despite the fact that a geneic is chemically identical to a branded drug (once it has come out of its 6 year patent period anyone can copy it), they spend money convincing doctors to keep prescribing their several multiples more expensive drug anyway. Here in Australia, that price is neither paid for by the doctor as the patient gets the script, and the government subsidizes a huge amount of drugs costs under the PBS scheme. So the ridiculous markup ends up coming out of the taxpayers' pockets. Big pharma is marketing their right to collect from general taxes.
They also spend enormous amounts of their marketing funds on lobbying. Getting your drug listed on the PBS is essentially a free ride on taxpayers, so pharma pays huge amounts of money inviting prominent doctors and other members of the medico-political fraternity to lavish "conferences" in exotic locations, showering them with luxury after luxury. I've been to a few of these events, and the thinly veiled palm greasing in such a socially crucial industry is sickening.
Marketing is an industry that needs regulation. I don't know how, but there needs to be some way to prevent marketing from deliberately destroying the ability of people to make informed decisions. Yes, yes, caveat emptor and all that. In the real world, not everyone can spend a year researching every decision exhaustively; we need to make decisions with incomplete information, and the marketing industry is designed to ensure that the first information that comes to hand is as misleading as they can get away with.
And holy cow, what a rant. I originally intended to whine about EA's marketing spending as being the reason we don't get any groundbreaking new games like Syndicate or XCom any more.
It's a natural result of monopoly rights. In market segments where you have competition there's a reasonable natural limit on the value of marketing; raise your costs and prices too much and your customers will buy the competitors product instead. With monopoly rights there is nobody else to buy an equivalent product from. The price point at which your customers drop off is where they can no longer afford the product at all, which places the marketing ROI equilibrium far, far higher.
The purpose of marketing is product differentiation, which is why it is more important in segments with heavy competition. Common products like Tylenol have hundreds of millions in marketing so that the consumer "trusts" their brand name product over a generic. While it's true pharma companies market patented products to which they have monopoly rights to distribute, it is because there are alternative products which treat the same illness available to consumers. For example all the ED treatments on TV may still be covered by patents, but they are all competing against each other. The other reason for marketing is to promote off-label use of their product to expand their market. This is a grey area of fact and marketing fiction; In some ways it's healthy for the market because doctors receive extended "education", the downside is the information is skewed towards a single product. The majority of marketing budgets consist of doctor education courses and free samples, rather than television and other direct to consumer marketing.
So it's not really marketing that needs extra regulation, it's monopoly rights that need to be scrapped. There are few methods of redistributing funds within the economy that are as wasteful and damaging as the monopoly.
There are very few treatments which a single company dominates. While they may hold a monopoly on a single medication, there are usually alternative chemistries that behave in a similar fashion to treat the same illness. It is because of monopoly rights that multiple treatments are available for the same illness, with the only difference being that they work better or worse for a small portion of the population. There is no one-drug-fits-all, so it is important to create incentives for continued research into similar products. Those incentives just wouldn't be there without the artificial monopoly of IP, companies would all just pump out the same medication that works in 90% of people and ignore the other 10% of patients because the market wouldn't allow them an opportunity to recoup the research dollars.
While I agree change needs to occur. there is no easy solution to health care. If it was as easy as saying scrap IP, I would be all for it, unfortunately the world is far more complex.
With my experience with the quality and stability of their games, this does not surprise me in the least. I used to work for a cyber cafe. EA games made up about 30% of our titles and 25% of the playtime, but 95% of crashes occurred while an EA game was being played. also many times patches for EA games broke them, A problem we rarely had with non EA titles.
I agree, EA has to be one of the game companies i dislike the most. Their games have little to no replay value, if any value in the first place. Its obvious they're in it for the money and not the games themselves.
If you have to spend 3 times the money of development for marketing alone, its a pretty strong sign that you're selling crap and not giving a shit about your customers, all you want is their money.
The state of our entire entertainments industry today is very sad, everything is more about money than it is about quality.
Software development is a lot like a having a baby. 1 woman, 9 months = 1 baby. You can't add 8 more women to the equation and get a baby in one month. And as projects get larger, the success is dependent on cohesive management, not necessarily additional resources.
However, with marketing -- you can send any number of suit-monkeys out to cut deals with drink manufacturers, t-shirt companies, magazines.. etc. All without detracting from the potential quality of your final product.
If it's in the game, it's likely because one of these marketing people said it needed to be in the game. Thank them for in-game advertising and in-game shops that accept real world money.
Fred Brooks put it best in 'The Mythical Man Month:'
"...when schedule slippage is recognized, the natural (and traditional) response is to add manpower. Like dousing a fire with gasoline, this makes matters worse, much worse. More fire requires more gasoline, and thus begins a regenerative cycle which ends in disaster."
While this is true -- it seems that a lot of the problems with games today is that they are given excessively tight deadlines to get them out, say, by Christmas. To follow the woman/baby analogy -- it takes more resources for a woman to have a baby gestating in her for 9 months than for 5 months. If you can just get that baby out in 5 months, you could save some resources, but the quality of the product (crappy video game vs. good video game/dead fetus vs. live baby) will differ greatly.
Using well-tested, modular women who can easily make extensible and interchangeable baby parts, you might be able to add a several women and grow a baby up to 40% faster. Of course, you'd have diminishing returns due to communication overhead once you get past four women.
Software development is a lot like a having a baby. 1 woman, 9 months = 1 baby. You can't add 8 more women to the equation and get a baby in one month. And as projects get larger, the success is dependent on cohesive management, not necessarily additional resources.
In keeping with your baby analogy, you also cant do it alone. Without competent writing, testing and a lot of other people its like trying to give birth all by yourself, your baby will probably be still-born and you end up relying on 'marketing' to con the public into believing it isn'r dead. Spending that much on marketing is like hoping giving the baby a good name makes a difference to how healthy it is.
However, with marketing -- you can send any number of suit-monkeys out to cut deals with drink manufacturers, t-shirt companies, magazines.. etc. All without detracting from the potential quality of your final product.
With enough marketing, you can almost bury bad reviews and lack of plot/gameplay/entertainment under a mountain of bullshit & biased reviews. Its all about risk. Why spend $4 million on development of a risky game that might be a massive hit when you can spend $1 million on the game, $3 million on marketing and be fairly sure that it'll make a million or two profit. If the marketing approach fails, its because of piracy obviously.
If it's in the game, it's likely because one of these marketing people said it needed to be in the game. Thank them for in-game advertising and in-game shops that accept real world money.
While I agree with your point on "suit monkeys" ruining games by adding in-game marketing to skim off the top, you seem to have entirely missed the point of the post. "Marketing" in it's basic form is simply building awareness for a product so that, if people like it, they can go buy it. Believe it or not, people who are unaware of products may not buy them, and while a few people may follow the likes of/. or IGN and already know everything, that small handful of people isn't going to support a game release. For this reason, marketing activity is very important to let people know that mass-appeal games are out.
One example where this worked well is the new Batman game. Batman has huge appeal, cost a fortune to make. If you just put it on shelves, only a few people will walk by and pick it up. Millions more non-hardcore-gamer people would love to play a Batman game, but don't always walk by game shelves. With $x million in marketing to drive awareness, they can make $2x-10x million selling that game.
Game developing is cheap compared to what it costs to buy enough TV airtime to make everyone aware of your product.
Software development is a lot like a having a baby. 1 woman, 9 months = 1 baby. You can't add 8 more women to the equation and get a baby in one month. And as projects get larger, the success is dependent on cohesive management, not necessarily additional resources.
However, with marketing -- you can send any number of suit-monkeys out to cut deals with drink manufacturers, t-shirt companies, magazines.. etc. All without detracting from the potential quality of your final product.
If it's in the game, it's likely because one of these marketing people said it needed to be in the game. Thank them for in-game advertising and in-game shops that accept real world money.
Makes sense, I suppose... But it is still galling to me as a customer.
That means that if I spend $40 on a video game only $10 of it actually went to manufacturing the game - the remaining $30 went to marketing.
Of course... That $10 didn't actually go to manufacturing the game either, because part of it went into DRM and packaging and whatever else...
So we're looking at maybe $5 or so of my money actually making it back to the folks who genuinely worked on producing my video game.
Yes, I understand there's lots of expense involved in producing a video game. You need development kits and office space and beta testers and all that good stuff. You can't very well turn out a modern video game in your garage. I get it.
But it seems kind of self-defeating to me... You aren't making enough money, so you throw in some DRM to stop piracy and do a bunch of marketing to draw in more cash. But you have to pay for the DRM and marketing... So you aren't making enough money to cover your new expenses... So you throw in some more marketing to draw in more cash...
Somewhere along the line it stops being about producing a game that people enjoy playing and want to buy. Somewhere along the line it starts being about micropayments and subscription fees and sequels and product placement and toys and tie-ins...
And then the publishers wonder why sales are down.
That would certainly be a very good reason that EA doesn't seem to be able to turn out decent games, or turns out games that have little to no polish on them. It also puts into perspective the "rising cost of game production." Probably they are over-marketing it, or marketing it the wrong way and to the wrong people. I've always thought that their TV adds for a lot of games were really wide of the mark, and probably a poor investment.
Umm, no decent games. Their sports titles are often the best. They get the best reviews and most sales. You can't say that games like NHL, Madden, MLB The Show aren't quality games. Also EA develops and sells the top selling video game series of all time, the SIMS.
Umm, no decent games. Their sports titles are often the best. They get the best reviews and most sales.
That's because EA has signed exclusive agreements with so many relevant leagues (NCAA, NFL, NHL, FIFA). By definition, the only player in a market will get the best reviews because it gets the only reviews.
2K doesn't have a soccer game, but Konami does. Pro Evolution Soccer [konami.com] was considered the best soccer game for quite some time. Fifa 09 gave EA the upper hand once again and the competition has forced both of the companies to put a fair amount of innovation in their upcoming titles.
Incidentally, EA bought the rights in response to 2K gaining significant market share on Madden [gamespot.com]. Additionally, 2K had started to sell their annual edition for $20 (Half of what Madden cost at the time). Rather than enter into a price-war, EA decided they could screw everybody out of their money by making a deal.
Sports games are the ones with the lowest overall development costs for EA. They get to re-use 90%+ of the assets and code from the previous year and get to charge full price. All they need to pay is marketing and licensing. It's a perfect market for a price war, and you can only sustain high prices by changing the rules.
There is no longer any company named Maxis. EA published their games for many years but has completely absorbed the company now. Will Wright, the founder of Maxis, doesn't even work there anymore. The Sims 3 is now a first-party EA game by all definitions and, for the record, it is a really fantastic game.
Often one heards that research costs drive the price of drugs high, but in fact a similar ratio between marketting and research costs exists in the drug industry.
Source please? I think you would be astonished [healthaffairs.org] by the cost of developing a new drug. Also bear in mind that drugs are only marketed strongly in the US. Most countries do not allow prescription drugs to be advertised to consumers.
That number for drug R&D costs is described by some commentators as "9-digit fairy tale" (source article http://www.cmaj.ca/cgi/content/full/180/3/279 [www.cmaj.ca]). It is true that you cannot market directly to consumers in many countries, the industry can and do market to doctors. Although the doctors are relatively few in numbers, the pandering they receive is far more expensive.
Since I just cleaned out about 300 viagra spams, let's look at Pfizer's most recent 10-Q? [edgar-online.com]
In the last 3 months, they spent $3.35 billion on marketing(which doesn't include things like writing fake articles for medical journals and letting people know about off-label uses, but I'll let that slide if you'll give me "administration expenses"), and spent $1.695 billion on R&D.
That's about 1.97 times the $$ on convincing people to buy their drugs than they do finding new drugs.
One thing that someone in the biomedical industry told me is that the path that drug research usually takes is that a Phd candidate will do basic research at the university, carry this research with them to a small startup company, which is then acquired by a big pharmaceutical if one of their drugs looks promising, who then goes thought the FDA testing process and gets the drug to market.
According to her these marketing/research numbers that get thrown around don't include the costs of acquiring start-ups. Since it is pretty much impossible for a small company to afford to get a drug through the FDA approval process, their entire business model is to sell-up to the big phamaceuticals, either the entire company or individual drug patents. Therefore, this aquisition / patent license money funds an awful lot of research that doesn't get counted in the numbers.
And it seems to me that this system works fairly well - the university / small lab environment is really more conducive to basic research than a large company who is focused on getting products to market. And in this case, the patent system helps provide a business model for these research labs that wouldn't exist otherwise.
Thanks for the folks that posted those sources, I'll have to check them out in detail later on, and see if they confim/refute what I've heard.
One thing that someone in the biomedical industry told me is that the path that drug research usually takes is that a Phd candidate will do basic research at the university, carry this research with them to a small startup company, which is then acquired by a big pharmaceutical if one of their drugs looks promising, who then goes thought the FDA testing process and gets the drug to market.
According to her these marketing/research numbers that get thrown around don't include the costs of acquiring start-ups. Since it is pretty much impossible for a small company to afford to get a drug through the FDA approval process, their entire business model is to sell-up to the big phamaceuticals, either the entire company or individual drug patents. Therefore, this aquisition / patent license money funds an awful lot of research that doesn't get counted in the numbers.
So big drug companies are the RIAAs of the drug world: They don't actually create anything useful, they just exploit it for huge profit. Awesome.
If I could show you a graph of marketing budget vs sales, you'd see that the correlation is much stronger. Making a great game doesn't immediately make people aware of it, and the public isn't the most sophisticated video game consumer.
Remember Daikatana? (http://en.wikipedia.org/wiki/Daikatana (I can't believe I'm posting a wp link in case people on Slashdot don't know what Daikatana is. No one click that.)) It was famous for being over-hyped and a total mess. It looked good once, but by launch anyone who knew about games knew that it would not be good. And it was still a top-10 seller for 3 months on the back of name recognition. Because the majority of game buyers don't know much about games (just like most industries). People had heard of the game, and they forgot that what they heard was a joke, so they bought it. Oh yeah, it had a big marketing budget too...
The reality is, sales (and therefore income) are better correlated to investment in advertising than the game itself. That pains me (as a game designer) deeply, but it's true. Things like this article used to peg my rage meter, but there's no point in getting upset at EA for realizing the way the market works.
Luckily, that's changing. The market is becoming more savvy, and quality is finally becoming important to publishers. I'm not spilling inside secrets when I say that WB is very excited about the high quality of Arkham Asylum. They knew it would be good, but you can never be sure that a game will be great, and their faces light up whenever they talk about it. It's very encouraging to me to see executives this excited about quality; that's new.
It's now common to hear people say things like "They're an 80+ developer" or "We're targetting 85+", which is also really encouraging. People used to talk about making good games, but now it's important that you be able to clearly establish that. It used to be only sales that mattered, but now people are more willing to accept that if you make quality games, the sales will come. That's huge, and you can expect to see it shift more resources from marketing to production, where they belong.
And if they reversed their expenses and spent that huge gob of marketing money on the actual game development, they could have games that are awesome and would potentially sell themselves.
Seems to me, the best products don't need advertising. The ones that don't sell themselves need others to run around selling them instead.
I take it you've never actually run a business yourself? Believe me, in the modern world you can make the best product but if you can't grab "mind-share" it won't sell. Marketing is always a large proportion of the cost of a product whether it's a videogame, a movie, or a dishwashing liquid.
He also said that a lot of his movies tank in the theaters and then do really well on DVD. People see the movie in theaters and then tell their friends to grab the DVD. That's why the Weinsteins let him make "his" movies without a lot of oversight. He makes enough money so nobody loses anything which keeps them happy.
However, it could go the other way. Everyone sees your movie/game/etc and they tell their friends it sucked. Nobody buys the DVD. I feel about the same with marketing. If your commercial looks like shit and I see it over and over, I am less inclined to buy your game/movie/etc. Even if I were thinking about it (fan of IP or whatnot) but am spammed with ads, I'll not buy it out of spite. Which is to say, too much marketing can hurt in my opinion.
Noting the success of the DS, PSP and iPhone, Hilleman slammed the price of producing console games has rocketed, with marketing costing up to three times more than the development of a title.
While the article is about handheld sales now being double that of consoles, it most certainly talks about the marketing costs. Read the whole article Sparky.
The problem with this scenario is that marketing helps in the initial, but it does not help in the long term...
Marketing can make caviar from crap. Seriously they can. BUT if EA keeps producing crap people will realize it is not caviar, but crap. Then to make it caviar again you need more marketing. It is a never ending race.
Had they not made crap in the first place then they would not have to spend that much on marketing.
While marketing is needed, the best marketing is when people tell other people that they should buy the product.
Here is an example; Heinz Ketchup. I have lived throughout Europe, and North America, and there is no way I will buy anything but Heinz Ketchup. Yes they have a marketing campaign, but Heinz does do a pretty good job making ketchup. They don't take their clientel for granted. With marketing Heinz could expand. Another example; nutella, Coke, Pepsi, etc...
Marketing is not just needed to polish turds, it's needed to get people to buy the good stuff too. In video games, or most other markets, there's a ton of competition. Without marketing, your product gets buried under the pile and no one ever sees it. Sure, you might sell a few copies to your friends, and they might get a couple of their friends to buy it, but that's it. Maybe if you're really really lucky it will go viral, but you're not going to spend tens of millions of dollars developing a game and just hope it will go viral on its own.
Marketing is more than just booth babes and TV commercials. Something as simple as where a product is on the shelf (eye level versus toward the ground, for example), or where your displays are in the store (in the back? at the entrance? How big are they?) is marketing, and it all costs money to do. The news doing a story on lines stretching out the door for the newest game release was probably prompted by a call from marketing. Tech news sites and TV shows featuring documentaries or segments about the "breakthrough" technology your game uses are all part of the marketing effort. Hell, even the guy behind the counter telling you it's a good game (or even the other "shopper" mentioning it in passing) may well be part of the marketing machine.
To claim that your household brands, especially Coke or Pepsi, get by without marketing is silly. Yes, Heinz may not spend as much on visible marketing, but they do pay for prime shelf space at your local store, and they've spent decades honing their image as a superior brand. None of that happened by accident, it was all marketing. The fact that you may not even realize you were being marketed to, and yet still have a preference for their brand, is part of what makes their campaigns so brilliant. Even word of mouth advertising can be primed by a good marketing department. And, of course, both Coke and Pepsi spend ungodly amounts of money making sure their logos are plastered all over just about everything you see. Coca Cola alone spends more than $1 billion annually on marketing.
A lot of people make the mistake of equating marketing with advertising, and in reality it's much, much more than that.
EA has been closing up shops left and right, just like most other large publishers (though really there aren't many large publishers these days, it's basically EA and Blizzard/Activision for PC games).
I think the main issue is that EA specifically, and the industry in general, has spent a lot of time in the last decade complaining about the rising costs of producing games, especially in the console and PC realms, yet EA is willing to spend 3x their development budget on marketing, the cost of which is pretty well within their control.
Of course, EA is also one of the companies that does pretty well controlling their development costs for their biggest selling games. They have a very limited time frame for development of their sports titles, and they do a fair job of deciding what improvements they can make year-to-year to still meet the time constraints and still keep most of their user base happy. They also figured out that it was worth more money to them to buy exclusive contracts with the leagues and player unions than to attempt to continue competing with other publishers and developers to make a better game in those time constraints.
Why would a company that has seen declining volume trends for more than a decade spend heavily to build new breweries? Cost of goods sold is where beer ingredients would be. To be fair, most of their manufacturing talent goes to making sure that no matter where and what time of year you buy a Bud, it's going to taste exactly the same every single time. Every microbrewery I know of would kill for that sort of ability.
TJ (Score:4, Insightful)
Well maybe if they spent more money on the development they wouldn't need so much money into marketing... *sigh*
Re: (Score:3, Funny)
From their perspective, mission accomplished and money well spent.
Re:TJ (Score:5, Informative)
Disgustingly, this is also true of big pharmaceuticals. They spend close to 2:1 marketing to research. Given that marketing cures is not something that you need to do, a sick person will come looking for it, one has to wonder why they need to spend such massive (we're talking billions here) amounts of money on, and why.
Well, after having spent hours with many pharma reps, the answer seems to be that they promote their brands over generics. Despite the fact that a geneic is chemically identical to a branded drug (once it has come out of its 6 year patent period anyone can copy it), they spend money convincing doctors to keep prescribing their several multiples more expensive drug anyway. Here in Australia, that price is neither paid for by the doctor as the patient gets the script, and the government subsidizes a huge amount of drugs costs under the PBS scheme. So the ridiculous markup ends up coming out of the taxpayers' pockets. Big pharma is marketing their right to collect from general taxes.
They also spend enormous amounts of their marketing funds on lobbying. Getting your drug listed on the PBS is essentially a free ride on taxpayers, so pharma pays huge amounts of money inviting prominent doctors and other members of the medico-political fraternity to lavish "conferences" in exotic locations, showering them with luxury after luxury. I've been to a few of these events, and the thinly veiled palm greasing in such a socially crucial industry is sickening.
Marketing is an industry that needs regulation. I don't know how, but there needs to be some way to prevent marketing from deliberately destroying the ability of people to make informed decisions. Yes, yes, caveat emptor and all that. In the real world, not everyone can spend a year researching every decision exhaustively; we need to make decisions with incomplete information, and the marketing industry is designed to ensure that the first information that comes to hand is as misleading as they can get away with.
And holy cow, what a rant. I originally intended to whine about EA's marketing spending as being the reason we don't get any groundbreaking new games like Syndicate or XCom any more.
Parent
Re:TJ (Score:5, Funny)
And what sort of rulers will you and Naz be once this conquest is achieved?
Parent
Re:TJ (Score:5, Insightful)
The purpose of marketing is product differentiation, which is why it is more important in segments with heavy competition. Common products like Tylenol have hundreds of millions in marketing so that the consumer "trusts" their brand name product over a generic. While it's true pharma companies market patented products to which they have monopoly rights to distribute, it is because there are alternative products which treat the same illness available to consumers. For example all the ED treatments on TV may still be covered by patents, but they are all competing against each other.
The other reason for marketing is to promote off-label use of their product to expand their market. This is a grey area of fact and marketing fiction; In some ways it's healthy for the market because doctors receive extended "education", the downside is the information is skewed towards a single product. The majority of marketing budgets consist of doctor education courses and free samples, rather than television and other direct to consumer marketing.
There are very few treatments which a single company dominates. While they may hold a monopoly on a single medication, there are usually alternative chemistries that behave in a similar fashion to treat the same illness. It is because of monopoly rights that multiple treatments are available for the same illness, with the only difference being that they work better or worse for a small portion of the population. There is no one-drug-fits-all, so it is important to create incentives for continued research into similar products. Those incentives just wouldn't be there without the artificial monopoly of IP, companies would all just pump out the same medication that works in 90% of people and ignore the other 10% of patients because the market wouldn't allow them an opportunity to recoup the research dollars.
While I agree change needs to occur. there is no easy solution to health care. If it was as easy as saying scrap IP, I would be all for it, unfortunately the world is far more complex.
Parent
Dosnt surprise me. (Score:4, Informative)
With my experience with the quality and stability of their games, this does not surprise me in the least. I used to work for a cyber cafe. EA games made up about 30% of our titles and 25% of the playtime, but 95% of crashes occurred while an EA game was being played. also many times patches for EA games broke them, A problem we rarely had with non EA titles.
Parent
Re:TJ (Score:4, Interesting)
I agree, EA has to be one of the game companies i dislike the most. Their games have little to no replay value, if any value in the first place. Its obvious they're in it for the money and not the games themselves.
If you have to spend 3 times the money of development for marketing alone, its a pretty strong sign that you're selling crap and not giving a shit about your customers, all you want is their money.
The state of our entire entertainments industry today is very sad, everything is more about money than it is about quality.
Parent
Why is this a surprise? (Score:5, Insightful)
Software development is a lot like a having a baby. 1 woman, 9 months = 1 baby. You can't add 8 more women to the equation and get a baby in one month. And as projects get larger, the success is dependent on cohesive management, not necessarily additional resources.
However, with marketing -- you can send any number of suit-monkeys out to cut deals with drink manufacturers, t-shirt companies, magazines.. etc. All without detracting from the potential quality of your final product.
If it's in the game, it's likely because one of these marketing people said it needed to be in the game. Thank them for in-game advertising and in-game shops that accept real world money.
Re:Why is this a surprise? (Score:5, Informative)
Fred Brooks put it best in 'The Mythical Man Month:'
"...when schedule slippage is recognized, the natural (and traditional) response is to add manpower. Like dousing a fire with gasoline, this makes matters worse, much worse. More fire requires more gasoline, and thus begins a regenerative cycle which ends in disaster."
Parent
Re:Why is this a surprise? (Score:5, Informative)
If I remember correctly, this is also the source of the pregnancy analogy. Good book.
Parent
Re:Why is this a surprise? (Score:5, Funny)
So if I combine your posts, what I get is that pregnancy is a regenerative cycle that ends in disaster.
Wait... what were we talking about?
Parent
Re:Why is this a surprise? (Score:5, Funny)
Parent
Re:Why is this a surprise? (Score:4, Informative)
I've normally seen that quote attributed to Werner von Braun [quotesdaddy.com].
Parent
Re:Why is this a surprise? (Score:5, Interesting)
Parent
Re:Why is this a surprise? (Score:5, Funny)
Request for car analogy here, I don't get this woman thing.
Parent
Re:Why is this a surprise? (Score:5, Funny)
Request for car analogy here, I don't get this woman thing.
Software development is a lot like a having a baby in a car. 1 woman, 9 glasses of wine, 1 romantic overlook = 1 baby.
Hmm.. my anology seems to fall apart. When I add more women to that, I get more babies.. sorry...
Parent
Re:Why is this a surprise? (Score:4, Funny)
You drive one car 9 miles in 9 minutes, but if you drive nine cars you'll drive 9 miles in one minute....simple
Parent
Re:Why is this a surprise? (Score:4, Funny)
Parent
Re:Why is this a surprise? (Score:4, Funny)
It takes Honda just under 2 years to develop a new model, and they are generally considered the highest overall quality in the world.
It takes GM 3-5 years to develop a new model, and they are generally considered shitty cars.
Wait, what were we discussing again?
Parent
Re: (Score:3, Funny)
Using well-tested, modular women who can easily make extensible and interchangeable baby parts, you might be able to add a several women and grow a baby up to 40% faster. Of course, you'd have diminishing returns due to communication overhead once you get past four women.
Re:Why is this a surprise? (Score:5, Insightful)
Software development is a lot like a having a baby. 1 woman, 9 months = 1 baby. You can't add 8 more women to the equation and get a baby in one month. And as projects get larger, the success is dependent on cohesive management, not necessarily additional resources.
In keeping with your baby analogy, you also cant do it alone. Without competent writing, testing and a lot of other people its like trying to give birth all by yourself, your baby will probably be still-born and you end up relying on 'marketing' to con the public into believing it isn'r dead. Spending that much on marketing is like hoping giving the baby a good name makes a difference to how healthy it is.
However, with marketing -- you can send any number of suit-monkeys out to cut deals with drink manufacturers, t-shirt companies, magazines.. etc. All without detracting from the potential quality of your final product.
With enough marketing, you can almost bury bad reviews and lack of plot/gameplay/entertainment under a mountain of bullshit & biased reviews.
Its all about risk. Why spend $4 million on development of a risky game that might be a massive hit when you can spend $1 million on the game, $3 million on marketing and be fairly sure that it'll make a million or two profit. If the marketing approach fails, its because of piracy obviously.
If it's in the game, it's likely because one of these marketing people said it needed to be in the game. Thank them for in-game advertising and in-game shops that accept real world money.
Sad but true.
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Re:Why is this a surprise? (Score:5, Interesting)
While I agree with your point on "suit monkeys" ruining games by adding in-game marketing to skim off the top, you seem to have entirely missed the point of the post. "Marketing" in it's basic form is simply building awareness for a product so that, if people like it, they can go buy it. Believe it or not, people who are unaware of products may not buy them, and while a few people may follow the likes of /. or IGN and already know everything, that small handful of people isn't going to support a game release. For this reason, marketing activity is very important to let people know that mass-appeal games are out.
One example where this worked well is the new Batman game. Batman has huge appeal, cost a fortune to make. If you just put it on shelves, only a few people will walk by and pick it up. Millions more non-hardcore-gamer people would love to play a Batman game, but don't always walk by game shelves. With $x million in marketing to drive awareness, they can make $2x-10x million selling that game.
Game developing is cheap compared to what it costs to buy enough TV airtime to make everyone aware of your product.
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Re: (Score:3, Insightful)
But without all the sex, of course.
Re:Why is this a surprise? (Score:4, Insightful)
Software development is a lot like a having a baby. 1 woman, 9 months = 1 baby. You can't add 8 more women to the equation and get a baby in one month. And as projects get larger, the success is dependent on cohesive management, not necessarily additional resources.
However, with marketing -- you can send any number of suit-monkeys out to cut deals with drink manufacturers, t-shirt companies, magazines.. etc. All without detracting from the potential quality of your final product.
If it's in the game, it's likely because one of these marketing people said it needed to be in the game. Thank them for in-game advertising and in-game shops that accept real world money.
Makes sense, I suppose... But it is still galling to me as a customer.
That means that if I spend $40 on a video game only $10 of it actually went to manufacturing the game - the remaining $30 went to marketing.
Of course... That $10 didn't actually go to manufacturing the game either, because part of it went into DRM and packaging and whatever else...
So we're looking at maybe $5 or so of my money actually making it back to the folks who genuinely worked on producing my video game.
Yes, I understand there's lots of expense involved in producing a video game. You need development kits and office space and beta testers and all that good stuff. You can't very well turn out a modern video game in your garage. I get it.
But it seems kind of self-defeating to me... You aren't making enough money, so you throw in some DRM to stop piracy and do a bunch of marketing to draw in more cash. But you have to pay for the DRM and marketing... So you aren't making enough money to cover your new expenses... So you throw in some more marketing to draw in more cash...
Somewhere along the line it stops being about producing a game that people enjoy playing and want to buy. Somewhere along the line it starts being about micropayments and subscription fees and sequels and product placement and toys and tie-ins...
And then the publishers wonder why sales are down.
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Well, that explains a lot (Score:4, Insightful)
Re:Well, that explains a lot (Score:4, Informative)
Umm, no decent games. Their sports titles are often the best. They get the best reviews and most sales. You can't say that games like NHL, Madden, MLB The Show aren't quality games. Also EA develops and sells the top selling video game series of all time, the SIMS.
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Monopoly (Score:5, Insightful)
Umm, no decent games. Their sports titles are often the best. They get the best reviews and most sales.
That's because EA has signed exclusive agreements with so many relevant leagues (NCAA, NFL, NHL, FIFA). By definition, the only player in a market will get the best reviews because it gets the only reviews.
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Re:2K football? (Score:4, Informative)
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Re:2K football? (Score:5, Insightful)
Incidentally, EA bought the rights in response to 2K gaining significant market share on Madden [gamespot.com]. Additionally, 2K had started to sell their annual edition for $20 (Half of what Madden cost at the time). Rather than enter into a price-war, EA decided they could screw everybody out of their money by making a deal.
Sports games are the ones with the lowest overall development costs for EA. They get to re-use 90%+ of the assets and code from the previous year and get to charge full price. All they need to pay is marketing and licensing. It's a perfect market for a price war, and you can only sustain high prices by changing the rules.
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Re:Well, that explains a lot (Score:5, Informative)
There is no longer any company named Maxis. EA published their games for many years but has completely absorbed the company now. Will Wright, the founder of Maxis, doesn't even work there anymore. The Sims 3 is now a first-party EA game by all definitions and, for the record, it is a really fantastic game.
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The same for drug industry (Score:4, Interesting)
Often one heards that research costs drive the price of drugs high, but in fact a similar ratio between marketting and research costs exists in the drug industry.
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Re:The same for drug industry (Score:5, Informative)
That number for drug R&D costs is described by some commentators as "9-digit fairy tale" (source article http://www.cmaj.ca/cgi/content/full/180/3/279 [www.cmaj.ca]). It is true that you cannot market directly to consumers in many countries, the industry can and do market to doctors. Although the doctors are relatively few in numbers, the pandering they receive is far more expensive.
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Re:The same for drug industry (Score:4, Informative)
Source please?
http://www.plosmedicine.org/article/info:doi/10.1371/journal.pmed.0050001 [plosmedicine.org]
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Re:The same for drug industry (Score:5, Informative)
3x does seem a bit high.
Since I just cleaned out about 300 viagra spams, let's look at Pfizer's most recent 10-Q? [edgar-online.com]
In the last 3 months, they spent $3.35 billion on marketing(which doesn't include things like writing fake articles for medical journals and letting people know about off-label uses, but I'll let that slide if you'll give me "administration expenses"), and spent $1.695 billion on R&D.
That's about 1.97 times the $$ on convincing people to buy their drugs than they do finding new drugs.
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Re:The same for drug industry (Score:5, Insightful)
One thing that someone in the biomedical industry told me is that the path that drug research usually takes is that a Phd candidate will do basic research at the university, carry this research with them to a small startup company, which is then acquired by a big pharmaceutical if one of their drugs looks promising, who then goes thought the FDA testing process and gets the drug to market.
According to her these marketing/research numbers that get thrown around don't include the costs of acquiring start-ups. Since it is pretty much impossible for a small company to afford to get a drug through the FDA approval process, their entire business model is to sell-up to the big phamaceuticals, either the entire company or individual drug patents. Therefore, this aquisition / patent license money funds an awful lot of research that doesn't get counted in the numbers.
And it seems to me that this system works fairly well - the university / small lab environment is really more conducive to basic research than a large company who is focused on getting products to market. And in this case, the patent system helps provide a business model for these research labs that wouldn't exist otherwise.
Thanks for the folks that posted those sources, I'll have to check them out in detail later on, and see if they confim/refute what I've heard.
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Re:The same for drug industry (Score:4, Insightful)
One thing that someone in the biomedical industry told me is that the path that drug research usually takes is that a Phd candidate will do basic research at the university, carry this research with them to a small startup company, which is then acquired by a big pharmaceutical if one of their drugs looks promising, who then goes thought the FDA testing process and gets the drug to market.
According to her these marketing/research numbers that get thrown around don't include the costs of acquiring start-ups. Since it is pretty much impossible for a small company to afford to get a drug through the FDA approval process, their entire business model is to sell-up to the big phamaceuticals, either the entire company or individual drug patents. Therefore, this aquisition / patent license money funds an awful lot of research that doesn't get counted in the numbers.
So big drug companies are the RIAAs of the drug world: They don't actually create anything useful, they just exploit it for huge profit. Awesome.
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Hmm... (Score:5, Insightful)
Re: (Score:3, Insightful)
Good thinking. Just like how Amiga put their effort into making a better computer than Apple, so today nobody has ever heard of a 'Macintosh'.
Re:Hmm... (Score:5, Interesting)
I've been working in games for 10 years, and I really, *really* wish I could agree with you.
Did you know that it's only been in the last few years that review scores and sales started to correlate? Until recently, there was virtually no connection between the review scores of your game and how well it sold, and it's still somewhat tenuous.
(see http://games.venturebeat.com/2009/05/29/does-game-quality-translate-into-better-financial-performance/ [venturebeat.com] and http://www.dreamdawn.com/sh/features/sales_vs_score.php [dreamdawn.com] for some backup on that.)
If I could show you a graph of marketing budget vs sales, you'd see that the correlation is much stronger. Making a great game doesn't immediately make people aware of it, and the public isn't the most sophisticated video game consumer.
Remember Daikatana? (http://en.wikipedia.org/wiki/Daikatana (I can't believe I'm posting a wp link in case people on Slashdot don't know what Daikatana is. No one click that.)) It was famous for being over-hyped and a total mess. It looked good once, but by launch anyone who knew about games knew that it would not be good. And it was still a top-10 seller for 3 months on the back of name recognition. Because the majority of game buyers don't know much about games (just like most industries). People had heard of the game, and they forgot that what they heard was a joke, so they bought it. Oh yeah, it had a big marketing budget too...
The reality is, sales (and therefore income) are better correlated to investment in advertising than the game itself. That pains me (as a game designer) deeply, but it's true. Things like this article used to peg my rage meter, but there's no point in getting upset at EA for realizing the way the market works.
Luckily, that's changing. The market is becoming more savvy, and quality is finally becoming important to publishers. I'm not spilling inside secrets when I say that WB is very excited about the high quality of Arkham Asylum. They knew it would be good, but you can never be sure that a game will be great, and their faces light up whenever they talk about it. It's very encouraging to me to see executives this excited about quality; that's new.
It's now common to hear people say things like "They're an 80+ developer" or "We're targetting 85+", which is also really encouraging. People used to talk about making good games, but now it's important that you be able to clearly establish that. It used to be only sales that mattered, but now people are more willing to accept that if you make quality games, the sales will come. That's huge, and you can expect to see it shift more resources from marketing to production, where they belong.
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What if they did the opposite? (Score:3, Insightful)
Seems to me, the best products don't need advertising. The ones that don't sell themselves need others to run around selling them instead.
Re:What if they did the opposite? (Score:5, Insightful)
I take it you've never actually run a business yourself? Believe me, in the modern world you can make the best product but if you can't grab "mind-share" it won't sell. Marketing is always a large proportion of the cost of a product whether it's a videogame, a movie, or a dishwashing liquid.
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I always knew EA wasted money, but this is nuts! (Score:3, Insightful)
Imagine if they spent that cash on development instead?
gamers don't need TV commercials.
Madden and other crap franchises are the bulk of the ad budget.
Why are games so expensive? (Score:5, Funny)
Q: Why are games so expensive?
A: Because it costs us that much to convince you you want to buy it.
Re:Probably on par with other entertainment ... (Score:4, Insightful)
However, it could go the other way. Everyone sees your movie/game/etc and they tell their friends it sucked. Nobody buys the DVD. I feel about the same with marketing. If your commercial looks like shit and I see it over and over, I am less inclined to buy your game/movie/etc. Even if I were thinking about it (fan of IP or whatnot) but am spammed with ads, I'll not buy it out of spite. Which is to say, too much marketing can hurt in my opinion.
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Re:Who's Wrong? (Score:4, Informative)
Noting the success of the DS, PSP and iPhone, Hilleman slammed the price of producing console games has rocketed, with marketing costing up to three times more than the development of a title.
While the article is about handheld sales now being double that of consoles, it most certainly talks about the marketing costs. Read the whole article Sparky.
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Re:Excessive Marketing (Score:5, Insightful)
The problem with this scenario is that marketing helps in the initial, but it does not help in the long term...
Marketing can make caviar from crap. Seriously they can. BUT if EA keeps producing crap people will realize it is not caviar, but crap. Then to make it caviar again you need more marketing. It is a never ending race.
Had they not made crap in the first place then they would not have to spend that much on marketing.
While marketing is needed, the best marketing is when people tell other people that they should buy the product.
Here is an example; Heinz Ketchup. I have lived throughout Europe, and North America, and there is no way I will buy anything but Heinz Ketchup. Yes they have a marketing campaign, but Heinz does do a pretty good job making ketchup. They don't take their clientel for granted. With marketing Heinz could expand. Another example; nutella, Coke, Pepsi, etc...
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Re:Excessive Marketing (Score:5, Insightful)
Marketing is more than just booth babes and TV commercials. Something as simple as where a product is on the shelf (eye level versus toward the ground, for example), or where your displays are in the store (in the back? at the entrance? How big are they?) is marketing, and it all costs money to do. The news doing a story on lines stretching out the door for the newest game release was probably prompted by a call from marketing. Tech news sites and TV shows featuring documentaries or segments about the "breakthrough" technology your game uses are all part of the marketing effort. Hell, even the guy behind the counter telling you it's a good game (or even the other "shopper" mentioning it in passing) may well be part of the marketing machine.
To claim that your household brands, especially Coke or Pepsi, get by without marketing is silly. Yes, Heinz may not spend as much on visible marketing, but they do pay for prime shelf space at your local store, and they've spent decades honing their image as a superior brand. None of that happened by accident, it was all marketing. The fact that you may not even realize you were being marketed to, and yet still have a preference for their brand, is part of what makes their campaigns so brilliant. Even word of mouth advertising can be primed by a good marketing department. And, of course, both Coke and Pepsi spend ungodly amounts of money making sure their logos are plastered all over just about everything you see. Coca Cola alone spends more than $1 billion annually on marketing.
A lot of people make the mistake of equating marketing with advertising, and in reality it's much, much more than that.
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Re:Excessive Marketing (Score:5, Informative)
EA has been closing up shops left and right, just like most other large publishers (though really there aren't many large publishers these days, it's basically EA and Blizzard/Activision for PC games).
I think the main issue is that EA specifically, and the industry in general, has spent a lot of time in the last decade complaining about the rising costs of producing games, especially in the console and PC realms, yet EA is willing to spend 3x their development budget on marketing, the cost of which is pretty well within their control.
Of course, EA is also one of the companies that does pretty well controlling their development costs for their biggest selling games. They have a very limited time frame for development of their sports titles, and they do a fair job of deciding what improvements they can make year-to-year to still meet the time constraints and still keep most of their user base happy. They also figured out that it was worth more money to them to buy exclusive contracts with the leagues and player unions than to attempt to continue competing with other publishers and developers to make a better game in those time constraints.
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Re:Excessive Marketing (Score:4, Insightful)
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