The Impact Of Marketing On Video Game Industry And Culture
Impact of Marketing on the Video Game Industry and Culture
The role of marketing in business cannot be overstated. Admittedly, marketing is the single most important driver of success in any corporation. Over the years, the video game industry has grown to become one of the most profitable sectors of the economy. From the 1970s arcade games to the age of consoles, marketing has made a significant impact on the popularity and consumption of video games. In the recent past, video game developers have penetrated the market with state-of-the-art hardware and software. This influx of video games has dramatically raised the supply and tightened the competition in this industry. Therefore, the success of one product over its competitors has been an outcome of marketing and advertisement. Regardless of the superiority of the software or hardware, developers must adopt a marketing strategy that not only informs the consumers about the quality of the video game but also checks and controls competition in this technological sector. At the same time, they must ensure that their products are captivating to the player to promote word of mouth and generate referrals. In this paper, I will argue that marketing and advertisement complement the outstanding game characteristics in carving a market niche for both hardware and software developers. I will also discuss the marketing strategies of three leading gaming companies – Nintendo, Microsoft, and Sony- and illustrate how they shape the gaming culture.
In the 1980s, video game developers like Atari and Activision developed arcade machines to popularize video games. The machines were installed in shopping malls and other busy places for people to play games. In 1980, Activision made Pac-Man and undertook a vigorous marketing campaign to popularize the game. Pac-Man symbols are featured on various objects like clothes, cups, and even food. Due to this advertisement and brand creation, Pac-Man became a cultural phenomenon in countries like Japan. Similarly, the age of gaming consoles saw a much-publicized brand promotion strategy. When PlayStation entered the market in 1995, it produced colorful and catchy games whose display in the media attracted many players. The progressive advancement of PlayStation came with a tremendous entry into the market. The release of PlayStation 2 in 2000 signaled other prospective video game developers about the profitability of the game. Subsequently, Microsoft released XBOX in 2001 which would see a sharp rise in competition in the video game industry.
Microsoft XBOX came with better designs that appealed to both adult and child players. Its consoles were more advanced with user-friendly features. All the work that went into the production of this hardware was meant to provide a competitive edge to an entrant into a market already saturated with similar goods. In addition to these user-interactive features, XBOX adopted an ingenious marketing strategy for its gaming segment that would see a sharp rise in sales for both XBOX and XBOX 360. First, Microsoft sold the consoles at a loss of $150 per item (Lacher et al.). The low introductory price was a penetration strategy in the market where Nintendo and Sony had dominated. Secondly, Microsoft studied the market to identify the needs and segment them on other relevant consumption characteristics. From this data, Microsoft tailor-made its video games for specific players. This implies that continuous research and gathering of user feedback is a marketing strategy that gaming companies use to remain visible in the market.
Like XBOX, PlayStation made tremendous efforts to assert itself as a giant in the video game market. The marketing strategy that PS uses incorporates product, place, pricing, and promotion (Parmar 24). The pricing strategy takes the differential valuing approach where Sony sets its prices depending on the consumers’ purchasing power (Parmar 25). The distribution of PS commodities is both online and offline. The consoles are available in all Sony outlets alongside sister products and online stores like Amazon and eBay (Parmar 24-25). As a technological company, Sony adopts colorful and appealing advertisement tactics to announce new products or remind users about older ones in its catalog. Moreover, the company has an impactful showcasing model that often utilizes captivating slogans. For instance, “Enos Lives” and “The Game Is Just the Start. Start PS3” taglines accompanied the introduction of PS1 and PS3 3 respectively (Parmar, 25). When these taglines are released alongside the advertised products, consumers get curious to test the new product and enjoy the experience. Additionally, these taglines crate trending topics on social media when converted to hashtags.
Nintendo’s marketing strategy saw its rise as a powerful rival to Sony and Microsoft. The making of Nintendo 64, Nintendo Gamecube, and Nintendo Wii was a gesture that the company was committed to making value for customers and responding to their changing needs. Nintendo is one of the companies that modify their marketing strategy based on the fluctuating economic times. Jialong Liu analyzes the new marketing strategy of Nintendo after the outbreak of Coronavirus in 2020. The pandemic caused widespread disruption of normal lives. One of the responses to the outbreak was the creation of living spaces at home, as people shifted their workstations from their offices. Therefore, gaming became a routine, and companies took advantage of this new normal. In the course of the pandemic, Nintendo popularised its Switch and Switch Lite gaming consoles as people preferred these devices while working at home. The advantage of these devices was portability and the ability to support multiplayer functions (Liu 155). Besides popularizing the Switch consoles, the company manufactured games that simulated real exercises as an attempt to promote fitness at home. A game like Ring allowed players to do exercise while deriving enjoyment from the same (Liu, 156).
Video game marketing can take many forms. Besides the traditional advertisement in media, word of mouth is a powerful avenue for expanding the consumer market. In contemporary social settings, word of mouth can be electronic or otherwise. Electronic word of mouth (e-WOM) usually comes from third-party influencers working on an electronic or digital platform (Rahrja and Dewakaya 23). The case of Steam games explicates the impact of electronic word of mouth on gaming culture and trends. One week after Steam released DreadOut, the Google search statistics were at 19 on a scale of 100. At this time, a YouTuber video game enthusiast created a video explaining how innovative the game was. Two weeks later, the Google search statistics for DreadOut had risen by 81%. Although the company did not appreciate the contribution of this YouTube influencer, the case of DreadOut's fluctuation in popularity speaks about the role of word of mouth in video game brand promotion. The slow acceptance of Steam games did not mean that the graphics or game aesthetics were of low quality. The consumers learned that the game was interactive when the social media influencer played it on YouTube. It means, therefore, that making games with high-quality graphics and playability features is not the single ticket to market success. Video game companies should harness the power of referrals and user feedback to ensure that their products make a remarkable entry into the market.
In conclusion, marketing is equally important as producing quality video games. When a player gains interest in a video game, he or she is likely to invite a friend to play the game. This means that referral through word of mouth is an important determinant of gaming culture. However, this does not mean that companies should not carry out other marketing activities. In the age of increasing competition, marketing ensures that video game companies remain competitive in the market. The marketing mix that companies adopt should consider the product, the place, the price, and the promotion. Regarding the product, the three top gaming companies have made remarkable efforts to progressively improve their product. The successive design and production of gaming consoles by Nintendo, Microsoft, and Sony is evidence that the market demands quality products that respond to the changes in social and economic trends. Like Nintendo’s response to the COVID-19 pandemic, gaming companies should take advantage of social adjustments and introduce products that fit different places.
