Serious about casual

Jul 2nd 2009 at 14:51 by Craig McNicol

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Use the word ‘casual’ in everyday society and most will know the situation being summed up is an exercise that will not be repeated – or is not a serious arrangement.

If you were given an outline of a person’s job as casual work, or described a relationship as one of casual sex, you would instantly know that the situation was purely a temporary one.

To add more weight to this point, the dictionary provides the following explanation for the meaning of casual: ‘Happening by chance; fortuitous and without definite or serious intention, devoid of or seeming to be without plan or method.’

Yet this definition surely does not fit the much-talked about, surely over-hyped casual video games market sector – that most current publishers and, without doubt, several future players are trying to participate within. The above casual definition definitely does not sum up the high amount of hours being burnt discussing, planning, launching and managing the huge amount of releases within the over-described sector.

However, for the industry, this is the era we have all been waiting for. The era when your 80-year old grandmother wants to know if her brain is actually 80, when you go to a party and people actually understand your job – as they have played or seen a game played and ‘it looks like fun’.

Yes, this is the age many prayers have been answered and surely now it’s all about just stepping on and sitting aboard the long-awaited gravy train. Well maybe, if you have the correct strategy and don’t accept without question that the growth in the casual market is a ‘nice little earner’.

We at Koch have a belief that the casual market is starting to appear similar to the PC multimedia marketplace of the mid 1990s. Today’s casual market could possibly follow the same rise and fall – and see many developers and publishers that operate purely in this one sector face failure.

“However we also recognise that it is not all doom and gloom. This segment does have one major positive difference to the old PC multimedia sector – format owners that are committed to driving software sales for hardware success long term.

The PC multimedia marketplace was targeting ‘a PC on every desk’ (as in Bill Gates’ vision), but suffered because of the boom of the internet, as well as the ever-changing technical specs, confusing installation routines and importability of the PCs of yesteryear.

Today’s hardware is more affordable, easier to use, and even offers true gaming on the move.

Koch’s insight is not unique; probably every publisher and developer has recognised this similarity and subsequent market opportunities. Nevertheless, Koch is in an exceptional position to be able to maximise the casual marketplace and reap good returns for developers and publishers.

Our research shows that retailers are unable to keep up with the number of releases that are already in the marketplace, and those that are due in the next six months. We know that that the volume of casual releases are bucking the trend of ‘traditional’ releases (multi-format or core gaming titles).

With casual releases in 2008’s peak season running at roughly 39 per cent of the whole casual market sector on Nintendo DS as opposed to around a quarter of traditional Nintendo DS titles, shelf space was always going to be tight.

Yet it’s surprising that retailers are not providing the same focus to casual as publishers may want to believe. Only a third of all available Nintendo DS space dedicated to new and pre-released casual releases each week throughout the peak of 2008.

This is an alarming discovery, and one that could be perhaps explained as retailers already recognising that casual product is a risky product – a release that will possibly not perform as well as a properly marketed, fully PR’d, already established consumer-known branded title that targets an audience known to repeat purchase.

Therefore, who can blame a retailer for refusing to support this largely ‘Me Too’ product, and failing to give any justified promotional, high visibility shelf space without a rock bottom, probably loss-making (for the publisher) price point.

This is a dangerous and perhaps unfixable situation, as more publishers will fail without realising a profit and consumers will believe that other titles are expensive, forcing overall price points down indefinitely. Another tactic that we are familiar with is the rapid penetration strategy that certain publishers have adopted.

This rapid penetration approach is undertaken by advantageously entering a sector early – in this case, a huge range alongside a low price point and large financial marketing and promotional budget. The intent is to capture market share and long term dominance, overcoming any retailer reluctance. Once this market position is established, this advance should enable the publisher to reap lasting results when other publishers have failed or indeed lost interest in the sector. However, this approach has also in the main failed.

After two years of first launching the range and with large marketing spend supporting the franchise, you’d expect retailer support to be higher for the latest releases than that achieved by initial launch titles. In fact the reverse is true.

Although there could ultimately be a ‘jewel in the crown’ title to follow, which will subsequently allow this strategy to become an overnight success, current statistics suggest that the high marketing investment and vast range management resource surely involved, financial return will have been largely unsuccessful.

Moreover, this approach will always need huge marketing investment. But unless the range attracts major word-of-mouth recommendation, as in several of the innovative Nintendo releases, or has the ability to generate vast column inches of mass market PR space, the strategy will always have to rely on major marketing campaigns at huge expense, to stand out from the crowd.

Another observation we have acknowledged is that traditional Nintendo DS titles have a focus at various retailers for a limited amount of time, and typically new releases get the lion’s share of the shelf space focus.

However, within casual, pre-released titles are maintaining a larger focus at retailer level with new releases appearing to be ‘bumped’ on average by all retailers types at least a week earlier. We expect that 2009’s forthcoming peak will see dramatic worsening focus for Nintendo DS casual releases.

Nevertheless Koch has seen some brilliance in the industry, and through our major investment in defining product positioning strategies alongside procuring the correct product, we believe that in 2009 challenges are largely anticipated.

We have built a team capable of delivering our goals who have long-term experience and relationships within the industry to capitalise on this casual opportunity. We judge this long-awaited mass-market potential as an area that Koch will extensively participate successfully within, and whilst we identify that new challenges will emerge, ultimately our attitude to making our product portfolio thrive can be described as anything but casual.