Play is big business; with its net worth expected to hit $118 billion by 2019. What lessons can financial services learn from its success? Lína Ingvarsdóttir, senior producer at EA DICE, explains.
Words: Lína Ingvarsdóttir
Illustration: Mustafa Hacalaki
Before I joined the games industry, my first job out of university was in pharmaceutical development. I had a fantastic job for years but decided I was too young to get stuck in one sector, so I started working for a retail holding company in business development and research into new technologies. I thought it sounded interesting as I am very much in love with technology but I actually realised people working in retail weren’t really like-minded with me. I felt like a bit of an alien.
After I’d been there for a while I wasn’t too happy. One day I received an email that I had sent myself some months earlier using FutureMe. The email said, “If you still feel like this, quit.” Around that time I had attended a lecture by the CEO of an Icelandic games company called CCP Games, where I had a bunch of friends, and I totally fell in love with the work that he described. I started working on their flagship title EVE Online six weeks later.
EVE Online did a lot of unique things. It’s a massively multiplayer online game set in space where players can indulge in trade, manufacture, piracy, war and many other activities across over 7,000 star systems. We hired an economist (now working as the dean of a university in Iceland) who used to help manage the development of the in-game economy. The economy is in a sense very real — the game is made in Iceland and has more players than the population of the country. CCP do not control the economy directly — they control development of the game and the generation of resources, but, at the same time, what is in the game world is managed and developed by the way people play.
It’s a true virtual world where hundreds of thousands of people play together, and once you lose an asset in EVE it’s gone forever. Some of the spaceships in the game can be worth tens of thousands of dollars. One famous battle in the game in 2014 involving more than 7,000 players warring it out over the course of 21 hours resulted in the loss of the equivalent of $300,000. CCP would even publish quarterly economic reports showing the manufacture, trade and natural resources in the game.
In addition, players can pay for the game subscription by using the in-game currency, ISK (InterStellar Kredits), to purchase PLEX, an item worth 30 days of game time, and in a sense pay for other people’s playtime as a form of payment for their services within a vast free-market economy. Others trade PLEX to play in-game stock markets to build wealth. It may seem far removed from traditional business but there are similarities and lessons to be learned.
If you look at loyalty programmes, whether they’re for airline loyalty programmes or credit cards, a lot of industries are generating models where being loyal to a certain service generates currency that can be used in similar ways. I do know that other companies have looked into what EVE Online does, and that model of economy, and are figuring out how to draw some parallels by looking into what drives consumer behaviours and what drives brand loyalty. They have found that customers who generate value by using a service are not only treated better, but in addition, they also create other kinds of value that can either be used personally or shared with others.
As I have worked longer in the games industry and think of the role games designers play, the best system designers (those who consider how to keep players engaged) tend to understand the by-products of the systems that they design, and drive certain behaviours in games as a result. For example, you might be driving players towards fun content that generates more rewards, whether it is currency in the game, perks or something else.
Development of games is informed by player feedback, in the way the players communicate back to the developers on forums or share social posts with opinions about games, or rate them on different sites — we deal with a vocal community. There are also the developers who are playing the games alongside players, observing behaviours within the game, as well as extensive data analysis in terms of identifying preferable content.
We see some of this approach in younger financial companies; in Iceland, for example, there is a company called Meniga that provides services that can hook up to your internet bank and analyse your spending patterns with pre-tagged companies, so you get to see the breakdown in how much you have spent on transportation, food, clothing, etc. Customers can also tag the date themselves so they can break it down further to analyse their behaviour. Users also provide non-identifiable access to the companies, so they know how much the customer is spending. The more information companies have, the better they can manage the service. Companies can distinguish between age groups, genders, urban vs rural people, and how the spending patterns of these people differ, all of which is incredibly valuable information for banks and retailers.
When we play games, we generate vast amounts of data, and I think that most industries today are working furiously to use this data to improve their services to appeal to high-value customers. The data allows them to continually develop products and services. Some people can be very frightened by this kind of evolution. However, looking beyond gaming at the wider entertainment industry we see companies like Netflix doing this really well. They really analyse their consumers’ patterns; what time they watch shows, when they pause, etc., and this all feeds back so that they can create more appealing entertainment for the people who watch and subscribe.
“When we play games, we generate vast amounts of data, and I think that most industries today are working furiously to create better payment services to appeal to their high-value customers”
Again, you can take a cynical view of data-informed artistic development, or you can marvel at the fact that we have so much access to what resonates and what doesn’t. I think that, in terms of gaming, the unique thing is that players are very passionate about the games; you play them to be entertained and immersed. No other medium can provide that opportunity to become a participant in the world. I don’t think people get as passionate about an airline or banking services. Games give people a reason to interact more in an outspoken way.
People love the world, they love the gameplay and the community and once the game is out they want to continue to be engaged by it — that’s why games act as a service to the players who want to remain engaged. I think most games do that right now. Brand loyalty for some types of products holds a parallel. Apple are a good example of this: as a consumer of Apple you have myriad products, whether they’re phones, laptops, watches or software services, you ideologically buy into that brand and it becomes a part of life so that whenever they put out an additional product or service you opt in to continue to be a part of the ecosystem. In some ways there is a similar motivational aspect to it.
In my role on Star Wars Battlefront I partnered very closely with my senior director of brand. Games are not only an experience that you have sitting in the living room playing your console; a game is a world that you’ve become exposed to and you are engaged with; you can read about it; you can follow development diaries; your curiosity is awoken by seeing
a great trailer.
What we do when we create marketing material is to be as true to the game experience as possible, so we think about how to catch the players’ attention; we’ve done a lot of work to understand the people who play our games and how to speak to them. I think that all companies that have sophisticated marketing understand at their core who the consumer is and why they are engaged with what you make.
The boundaries between marketing and community building and influencing are very blurred; there are a lot of people out there who are very, very passionate about games and they are opinionated. We provide them access to the games during development and so not only are they influencers in the community, but they have the ability to speak directly to developers during the development process.
We want the feedback, and I think across the industry, developers are asking the question, “How can you get the players to give feedback as early as possible, not only so you can respond to it but also to make sure that the people that are following these influencers actually engage with the game prior to release in a way that interests them?” You have to create a symbiotic relationship between influencers, developers and marketers.
In particular, with the rise of social media, people have the platforms to communicate to large audiences through relatively simple means; you can see a lot of subcultures forming passionate communities — something like raw food has a lot of leverage on a platform like Instagram where we see different types of people communicating with each other, or fashion and cosmetics, toys — take the wildly popular unboxing videos on YouTube as an example.
I think that any type of product or service now has many platforms. A few years ago, communication to an audience was done either through TV, radio or print media, and that has now completely changed. Everyone has a voice; a lot of power and information has been provided to consumers, whether they are fashion geeks, gamers or lovers of raw food. I think traditional marketing needs to be on its toes and continuously evolving, because now it’s about building relationships, not just static bonds.
Three game companies setting the standard
Three very different video game companies from around the globe that can teach their own business lessons — each sets industry standards in its own way, from customer happiness to staff satisfaction
CD Projekt — Poland
This Warsaw-based company is very popular with consumers due to its stance against digital rights management (DRM), a restrictive digital media copy protection system, and for its good customer relations. Its most popular game, the heavily awarded The Witcher III: Wild Hunt, is still being consistently patched with improvements more than 18 months after its release.
Nintendo — Japan
Nintendo does not compete technologically with Playstation and Xbox; its consoles use lower-cost components with an emphasis on high-quality, family-focused software. This approach has allowed it to corner the casual and family markets. It is also famous in the financial world for having massive cash reserves; Nintendo has enough in the bank
theoretically to run a deficit into the 2050s.
Valve Corporation — USA
Valve is the creator of the Steam gaming platform and games such as Half-Life and Portal. It is noted for its unusually flat corporate structure: employees don’t report to managers and are afforded an open allocation policy — even the desks have wheels. This eccentric approach has led to great success.
Based on an interview with Ewen Hosie, Editorial Assistant at White Light Media
This story is taken from the fourth issue of Poppy. Our print run is strictly limited but, if you are based in the UK and work in financial services, you can request a printed copy via the ReadPoppy.com website.