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Of the $45 billion in US video game sales revenue projected by IBIS world for 2009, a sizable chunk will be delivered by "Santa." 92% of minors bring their parents to the checkout counter. 42% of adults plan to give and/or receive video games this season. Yet even if Nana organized a wii bowling league at the senior center, not all gift givers are comfortable with the purchase process. Take a load off Granny.
1. Product: How many specs do givers need to make a decision?
"I think he has the one with Blu-Ray..." Every decision node multiplies the uncertainty and risk a gift will end in fail. Flavors of fail include concern the item was purchased for the wrong console or is otherwise incompatible; the game content clashes with the giver's values or the recipient's maturity level; perhaps the recipient already owns it.
Digital distributors combat this uncertainty with gift cards to reloadable online accounts. The rationale is understandable: maximize the bang for one's gifting buck by letting the player choose a game that is compatible with their repertoire and interests. But before choosing this adventure, double check your financial forecast assumptions. Some estimates indicate that digital distribution uptake on wifi-enabled consoles still might be as low as 60%
of the installed base. Will gift cards increase adoption (strategic win) or does the remaining 40% of the market need a retail alternative to move revenue into the black?
Entering into a scarier zone of uncertainty, the gifting market has the potential to extend beyond explicitly-requested titles. Trying to encourage gifters to branch out from this season's hottest AAA's? Consider taking a page out of Amazon and Pandora's recommendation engine play books. If he already has [insert blockbuster title here], he might also like [insert your name here]. If CODMW2 is too violent for the giver's sensibilities, perhaps a rousing retro round of Duck Hunt is in order? Is junior studying for AP History exams this year? With a slight tweak in holiday messaging, Civilization should sell itself.
2. Price: How well can your product accommodate a variety of budgets?
It's not all about the price of the item itself. In fact, why is it that as I clicked through GameFly's checkout, I was reassured every screen of the way that I was getting a 20% discount? First off, this is not a routine purchase in which I'm intimately familiar with or concerned about the pricing norms. Secondly, I want the recipient to know that I spared no expense. These messages leave me... not so sure I didn't just do the equivalent of rummaging through a bargain bin for a festively loud holiday sweater for that special someone in my life. That said, there are some pricing considerations to keep in mind.
Wii Fit is likely priced outside of the office's Secret Santa giving guidelines, but a Wii gift card might fit nicely. Beyond concerns about the reach of digital distribution, gifters may be scared off by the terms of service on prepaid subscriptions. For instance, Netflix requires the recipient provide credit card information in order to auto-enroll them in a renewed subscription after their gift expires. Not all recipients are comfortable disclosing this much personal information and some may not have access to credit. Another travesty of the gift-giving experience is the inability to split an e-tail payment across multiple cards so that several individuals can pool their budgets for a larger joint gift.
3. Placement: How obscure are your distribution options?
Most gift givers have not beaten a path to Game Stop's door over the course of their regular errands. Many cringe at the customer service nightmare that is Best Buy at Christmas, or even worse, the Best Buy returns counter on Boxing Day. Nor will the intrepid giver always be able to distinguish between a legitimate internet mecca and a fly by night scam. What did you make of Icanhascheezburger
the first time you saw it?
Step 1 of the game plan is to offer distribution options which don't jostle gifters too far out of their comfort zone. This is why Walmart and Target gift cards fly off the shelves and why Amazon wish lists get so much traffic.
Failing that, Step 2 involves a little mimicry. I found GameFly by googling "Netflix for games." Based on suggested search terms, it looks like others have as well. This speaks volumes to GameFly's SEO and keyword purchase approach. But it also speaks volumes about their web design. Mimic Netflix. Gifters want a place to look like one they are more familiar doing business, be it iTunes, Amazon, or a neighborhood bookstore. Will Grandma open an account at Steam to stuff your stocking or is she more likely to pick up a cute Nexon gift card for you in the checkout line at 7-Eleven?
And of course, Step 3 involves a little post-purchase validation. Most reputable places of business will send you an email verifying the purchase went through, but how about the finer points? Are gift certificate printouts formatted to look respectable? Fit in a card/envelope? When the gift is redeemed, does the gifter get a thank you note update?
4. Promotion: How well do you channel seasonal and recipient momentum?
Marketing to the end user is pretty straight-forward once you get past a little target demographic and cross-sell analytics magic, end users have an endearing way of self-educating themselves about new releases. Sure, your communication plan is behind all the leaks and press releases, but at the end of the day, all but the most disappointed end users are your allies on serial releases.
Gifters are a different beast. They don't have Game Informer in their RSS feed. You can run event-based blasts and build your product release cycles around predictable seasonality spikes, but what about sporadic events like birthdays and beyond?
GameFly is on the right track with this one. They have fields allowing you to blast requests to select "friends" about your desire for their product. That said, this approach isn't quite a homerun. For starters, its success is predicated on recipients going to a standalone website that isn't as sticky as their Facebook, Twitter, Amazon or other major internet portals of call. There is no reason why GameFly couldn't use account data to let a gift giver know who in their Facebook/LinkedIn/email correspondence sphere has ever had an active account with GameFly to begin to build a larger share of their gift giving wallet and reassure them that Their Intended will appreciate their present. Second, the message is pushed to a select few designated gift givers rather than being an ambient post a surprise gifter could take advantage of. Third, it lacks the duplication control you might see at a respectable wedding or other gift registry. Fourth, GameFly does little to capture and anticipate potential milestone sales opportunities with account data. Birthdays are the first step, but even address changes can hint at a contextual messaging opportunity.