SAY Media: A week in Venn – Does Your Brand Play?

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In our regular Monday article, SAY Media analyses the week in a Venn diagram. This week, it’s about how online games are generating enormous revenue. 

“Games? You want games? I’ll give you games”.
Kevin Flynn (Tron, 1982)
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While I often question how much fun it is to fret over the ripeness of virtual tomatoes, social gaming companies such as Zynga are demonstrating that our desire to play can transcend age and gender … and generate enormous revenue. While you may not be a fan of FarmVille, you have to admit that converting digital artichoke seeds into cold hard cash IS a notable achievement.

While game mechanics are nothing new (why else would you fly United, except for the opportunity to earn points and level-up to Premier Exec?), the Web and mobile technology have pushed the goal-task-reward cycle into new areas. Publishers are bolting on systems from companies like Big Door and Badgeville (which this week raised an additional $12 million in capital) to overlay game mechanics on the act of reading, commenting and sharing articles. The much-loved and sorely missed Gourmet magazine has been recooked by Condé Nast as Gourmet Live, an iPad app where you earn rewards for exploring articles, slideshows and videos. Even major consumer brands like Nike are getting their game on – the Nike+ app has transformed running from a chore to a competitive game, leveling-up based on how far, fast and often you run.

On the surface, baking in reward mechanisms to drive desired behaviors makes sense. After all, if giving out virtual badges is all Foursquare needs to capture consumers’ travel patterns and retail consumption habits, then why not? But beware – you may end up creating feedback loops that only ensnare the most passionate (read: crazy) users. Case in point: BusinessWeek reported this week that as much as half of Zynga’s revenue is coming from less than 1% of their customers. What happens to Zynga when those “whales” go belly up?

As consumers, we’re a bit worried about being slowly transformed into reward-seeking hamsters. Why would I do anything without the opportunity to earn a merit badge? Who wouldn’t want to be a 10th level flosser, or sport the super-composter badge? Billy Corgan wasn’t playing Farmville or checking in at his local Starbucks when he wrote the lyrics to Bullet With Butterfly Wings, but he may as well have been. Because despite all our rage, we are still just rats in a cage.

By Alex Schleifer, general manager of SAY Media’s Media Lab

SAY Media are The Marketing Society’s Digital Partner. To find out more about The Marketing Society’s Digital Network and how to get involved, please contact Stuart.

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Posted: January 2nd, 2012 | Author: sarah-folley | Filed under: A week in Venn | Tags: , , , , , | Leave a Comment »

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