Marketing: Determining who your competition is?

[Promaginy]

My marketing instructor did not give me a satisfactory answer to my question about who is your competitor when you are creating new IP.

It is not helpful to be so broad and say that everyone who writes a computer game is my competition. This means I would be competing with everything from World of Warcraft to Freecell.

It is also not helpful to be too narrow and say that because my IP is unique, then I have no competition.

There is obviously a middle ground that needs to be found. I am wanting to know how do you determine who your competition is. Is it by game genre, setting, or interface? Who does your customers compare your game to?

[Fantus]

Maybe I'm thinking too simple. but why not look at your target audiance, and find out what they are playing.

[princec]

I'm fundamentally rethinking who my competition is right now over in that New Paradigm thread. And yes, it's all of you. Specifically, currently it's the combination of the portals luring away all the traffic, the industry vets wowing the hardcore crowd with their stunning production values, and the budget retail sector showing my games up to be very poor value for money.

If I were a business genius I'd say the very next nail in the coffin is that we will see, in the next year or so, the very same budget titles that you once found in the bargain bin at the supermarket and MVC, regularly turning up for online download instead and the retail market specifically shifting to accomodate this by undersupplying SKUs to retailers. But my incredible track record of being 100% wrong and never listening to anyone means you should be quite safe from this affecting your business.

Cas :)

[baegsi]

I think one problem with determining a games market is that games are an entertainment product and there's no easy definable need a game satisfies. So if you want to see it very pessimistic, one could say all games are in competition, or even all entertainment products (an average user does not have much time to spent for leisure activities) or you can be very optimistic and only target games of the same genre. Personally, I tend to go with the latter but I'm unsure.

I think, market research for games is one of the hardest part of the indie venture, something I don't have figured out yet. Would I create a business app that fills a specific need, I just could call my potential customers and ask them, but how could I do this with a game idea?

[mahlzeit]

A competitor is anyone who, directly or indirectly, prevents you from realizing your full sales potential. In other words, if a customer who would have bought your product buys a product from Acme instead, Acme is your competitor.

Of course, competitors aren't the only people who prevent you from selling as much as you theoretically could: the other major player is yourself.

So, to optimize your sales, you should 1) not scare away potential customers, and 2) make sure they like you better than your competitors. Pretty simple, really. :)

[Andy]

Very often that depends from your priorities on the market Christopher.

By half a year ago I'd say our competitors are everybody who publishes their games at portals where we were going to get better success. Now we don't care about that part at all - there are no fair competition there so we've decided to not pay any attention to that part of our business at all.

So, mahlzeit is pretty right here - check where you'd like to get the first places and you will see who prevents you from being there.

PS Great that at least somebody started to talk about competition in addition to my always speaches. The same is here - our marketing guy always says the same to me: What do you mean "No competitors"? Are you doing business or what? ;)

[Coyote]

I'm going to echo what Fantus said.

Who is going to buy your software? What are they already buying?

If you don't have an answer to that first one, then you've got zero potential customers, and you should quit now. It could be that your target market is, "Casual gamers who are bored with the current trends in casual games." Okay - are they buying anything else? Are they so bored that they've given up on games completely? If so, what have they been lured away TO, and how can you compete against it.

I was at GDC one year (1999?) when Shigeru Miyamoto spoke and claimed that from his (and Nintendo's) point of view, Tamagochi was their competition and had beaten them. I've heard other industry leaders talk about how their competition includes ALL forms of entertainment --- but I don't think we can afford to broaden our focus that much. But it is important to remember that your competition MAY NOT JUST BE other computer games.

[princec]

We all have a specific range, outside which our business and marketing efforts have virtually no effect. All of us are in the "computer games" range, which means, we're targeting people who are already plonked in front of their computer and wondering what to do with themselves. There is little point in us trying to lure people away from TV, extreme sports, or motorbikes!

That's convenient though, because it means we know who our enemies are. Anything you can do on a computer other than playing our games is competition. Surfing eBay, writing emails, doing work, pr0n, it's all competition which we can start to attempt to do something about.

As we get closer to our direct area of influence we have more effect. Let us now consider the person who is already sat at their computer and wants to play a game. This is the biggest area of competition. The question is: whose game? And that puts us all directly in competition with each other, and retail.

We certainly mustn't make the mistake of competing with activities well beyond our sphere of influence, as we have absolutely utterly no resources to do so.

Cas :)

[Andy]

We certainly mustn't make the mistake of competing with activities well beyond our sphere of influence, as we have absolutely utterly no resources to do so.

Cas :)

Exactly! Correct! As well as incorrect to say "my competition it's all of you" - meaning this is truth really but that brings nothing again. Because of that limited resources again.
Our one always says - choose the correct target for attack and attack it after that down to the death. ;)

So, wait at least with ALL of us cas. Choose somebody specific for the start. ;)

[terin]

Ok, well, your professor is an idiot :-) (Ok, that was harsh, but he should know the competitive levels model enough to explain it clearly).

Here's my marketing seminar for today:

There are four (possibly 5, depending on the product type) levels of competition in the world. You can symbolize it by drawing 4 circles, each one inside the other (like a bullseye).

In the center you have the "closest" competition to your product. There are things that can be substituted for your product directly. In this case we will use Granola Bars.

The center circle contains each type of Granola Bar. Kellogs, Sunbelt, Quaker Oats, ect.

In your case you say that there is nothing quite similar. Therefore your closest competition is nothing. Yes, it is possible that in catagories there are no alternatives, but it is NOT possible to have no competition.

The next circle contains alternatives to your catagory. Granola Bars compete with, power bars, breakfast bars, ect.

In your case you would be considering similar but not clones of the same genres. For instance Snood is competing with Zuma Delux in this catagory (arguably that is direct competition, but the lines are not always black and white. An advanced principal is to move the cloeser competitions closer to your center). Again, in this you may not have any competition at all.

In the next circle you have similar competing products with same reason but different type. Granola Bars compete with cerial, fresh fruit, eggs, ect.

In this case your game is competing with anything in your genre. Every indie puzzle game competes on this level.

In the next circle you have a catagory level competition. Granola competes against meat, dairy, chips, every other type of food. In your case, this is where your game competes with Warcraft and Halo.

In the 5th circle, the one most people don't even look at, everything in the world is competing. This is where your game competes with granola bars and cars. Most of the time this circle really isn't worth looking at.

The reason this lesson is important is each marketing strategy can be tailored to target a specific circle of competition.

A coupon for granola bars gives a strong competitive advantage over your first circle of competition. Advertising that your Granola is more healthy than other "bars" of food gives you a competitive advantage in circle 2. Cross promoting Cereal with your granola bar gives you a competitive advantage in circle 3... and so on.

I hope this does a better job than your professor did. Make a graph, place your competition in relative positions in the circle. See what it looks like. The less competition you have the better, but you also have to consider even with NO COMPETITION on the first two levels the market size may not be large enough to support a product (and this could be why there is no competition!)

-Joe

[mahlzeit]

And that puts us all directly in competition with each other, and retail.
Only for those customers who like everyone's games. Most customers will buy certain types of games, but not others. An indie who sells a casual clickety-click game to someone who absolutely hates shooters is no competition for you, at least as far as this type of customer is concerned. That customer would never have bought from you in the first place.

[princec]

I think Terin's insightful post describes the situation succinctly.

Cas :)

[Itsme]

There is an excellent tool that I use before I start new internet ventures.
www.nichebot.com
I don't think that it's very accurate, but it's very good for the quick and dirty answer. I use it to exclude niches, and do more research.
The tool is bloody brilliant, but I never used it for games (since I am not very invested in games).
But I used it a minute ago for a superficial analysis of "solitaire"

http://www.nichebot.com/?term=solitaire
this is just a basic "keyword suggestion" analog. Notice that Pretty Good Solitaire is not on the list (but I think it's a #1 ranked solitaire game).
But you can see what people are searching and how much competition there is
To find out top players in the solitaire niche we have to look up analysis
Here we go
http://www.nichebot.com/analysis/?term=solitaire
Ok, number one is 123freesolitare.com and number 2 is goodsol.com (pretty good solitaire)
I have no idea which game has a bigger market share (probably Pretty Good Solitaire), but in terms of web presence 123freesolitaire.com is ranked first (like I said the tool is not too acturate). Plus there are 13 other competitors that I might have not known about.
Let's do lateralus
http://www.nichebot.com/lateralus/?term=solitaire
Ok, now I see other keywords that appear on the pages related to solitaire
(card, games, card games, patience, klondike, spider, etc.)
Now I can plan the content to include all of these keywords.

The cool think is that it's brain-dead easy to find a niche with nichebot.com, because you can actually see how often a keyword is searched for and how much competition there is. Big search count, low competition - that's your niche (yes, it's that easy). Although most "good niches" turn out to be microscopic.

It's fun to play around with nichebot.com, because you can enter "Arkanoid", "Galaga", "Boulder Dash" and actually see where nichebot is dead on, and where it's off. I highly recommend using it to test your ideas, because if you are thinging that you might have a good niche, this bot might show you true market picture and save you a whole lot of time.

[Itsme]

Oh yeah, important side note. Nichebot.com works for "search engine niches" only. So the results can be easily scewed for a product that is popular despite low web presence. This is just who's competing with you on the web for search engine traffic. Portals would probably not be reflected here correctly, because it's mostly repeated traffic.

[Anthony Flack]

My current feeling is not to underestimate the wider circles of competition. To see my game as competing for a very limited amount of leisure time the user has.

So I want to make a game that people would rather play than play another game, watch a movie, read a book, or whatever. This is of course a very tall order. I'm not claming with any confidence that I can achieve this with any great success. But that's the kind of level I'm looking at (explains why I've been working on one game for nearly 3 years, perhaps).

I'm not sure if the question of buy or not buy is even that important. "Spend $20" or "don't spend $20" is not nearly as hard to influence people about, than "play this game" or "don't bother".

[Rainer Deyke]

I am trying to fill the very specific niche of "games I really like". Anybody who makes a game that I really like is my competitor. I wish I had more competitors.

[svero]

Less competition is good of course, but my view of entertainment related markets is that there's always room for 1 more good X. Whatever x may be. Another good album, another good game, another good movie. My problem is that there are never enough good games to get, or movies to watch, or music to listen to. 99.9% of everything I see isn't somehting I want. I can't remember a time in the past where I was looking at 2 or 3 games I really wanted and trying to decide which one I'll get. If there were 2 or 3 games I really wanted I got them all, but that rarely, if ever happened. Budget retail showing up on online sites isn't much concern for me. It's already happening with various sites like trygames anyway.

[Promaginy]

I hope this does a better job than your professor did. Make a graph, place your competition in relative positions in the circle. See what it looks like. The less competition you have the better, but you also have to consider even with NO COMPETITION on the first two levels the market size may not be large enough to support a product (and this could be why there is no competition!)

Thanks for that. It is exactly what I was looking for. I needed a method to help me evaluate who my competition is.

One irony I found in my marketing course is that ultimately every enterprise wants to avoid direct competition, because it hurts profitability. In many ways, marketing is about how to compete indirectly in the marketplace or pricing your product to not raise the ire of the competition.

[PoV]

... In this case we will use Granola Bars.Whoa, man!! I *love* granola!!!

Hehe, great little seminar there.

[terin]

Next time I will write a book, charge you to hear me talk, and then try to sell my book to you :-)

(NOW THAT IS MARKETING!)

-Joe

[princec]

You say this, but the number of people who say, "<fx: whiny voice>Uhh, but your game costs $20 and it's not nearly as cool as game X" is quite remarkable. Which isn't to say they'll buy X instead, in fact the moaning git probably won't buy anything.

Cas :)

[Ricardo C]

The people that tell you a variation on "Why buy your game when I can get UT2003 from the bargain bin?" were never going to buy to begin with. Don't worry about them.

[paulm]

Just as an interesting side note, I know that Coca Cola considers water their competition (I'm not talking about bottled water; just plain old tap water), although it really depends on how far you want to take your business as to where you draw the line on who your competitors are.

It would really depend on the game I think. It's very hard to draw up generalisations for an industry as diverse as the games industry.

Cheers,
Paul.

[princec]

So much so that Coca Cola co. actually dreamed up their own brand of water, Dasani I think it was called, which had a disastrous ending thanks to their own stupid disingenuity.

Cas :)

[Fantus]

Others are earning quite a bit with just water. In Holland you have this brand called Bar Le Duc (maybe also in other country's, I don't know) and they pump their water straight out of the dunes. The sand does such a good cleaning that further distilling is hardly necessary.

Another McDonalds quote I remember is quite a good one. Their motto was "keep the restaurant nice, clean and atractive, and the customers will come automaticly" (or something like that, it's the thought ;) ). Relate this to games, and you know what you've got to do.

[paulm]

So much so that Coca Cola co. actually dreamed up their own brand of water, Dasani I think it was called, which had a disastrous ending thanks to their own stupid disingenuity.


They did? That's cool. I never thought they'd even bother going into the bottled water market, but hey, apparently they did. The problem with companies that big is that it's so much harder to grow.

The market is flooded with bottled water anyhow. Somehow I don't think they were going to make a dent in it.

Cheers,
Paul.

[Anthony Flack]

Coca Cola primarily sell bottled tea here in Japan. You have to look at the fine print 'round the back to see the Coca Cola logo.

Although I think it would be ...interesting... if Coca Cola decided water was the enemy, and decided to destroy it.

[terin]

er, way off topic but:

All I know is a 16oz soda you can get for 25 cents here.

Lowest price water I have seen is 20oz for .89.

its a strange world we live in that soda is cheaper than water...makes you wonder what kind of water they use in soda ;-)

-Joe

[mikemystery]

Promaginy, try not to worry about your competition, or indeed making a game people will buy. You can't control that to any degree. But you're much more likely to sell a game that's original, that hasn't been done before than you are to sell a game that's like a whole bunch of others. Read "Welcome to the Creative Age - Bananas, Business and the Death of Marketing" by Mark Earls. It'll give you a much better idea of what to do than any marketing course will.

[Promaginy]

Promaginy, try not to worry about your competition, or indeed making a game people will buy. You can't control that to any degree. But you're much more likely to sell a game that's original, that hasn't been done before than you are to sell a game that's like a whole bunch of others. Read "Welcome to the Creative Age - Bananas, Business and the Death of Marketing" by Mark Earls. It'll give you a much better idea of what to do than any marketing course will.

Whoa, that is far too loose for me. I scouted out your reference on Amazon just because I was intrigued. Basically, the review says that this is an idea book, not a how-to-book. It sounds like something I would read when my current ideas are not working.

To me, business success if gained largely through discipline which is why creating a good marketing plan is important. I have lots of ideas about original games and even how to market them, but they are meaningless if you cannot deliver them.