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The Long Tail World

By Niketh Pareek
Author of The Basics: Marketing

According to Chris Anderson, author of The Long Tail, the world economy is shifting from selling goods to the mainstream ‘mass market’ toward selling to small groups of customers clustered in profitable niches that exist at the tail end of the demand curve.

The underlying reasons for this transformation are that unlike in other industries, digital content production costs fall off exponentially with technology growth, and distribution costs are virtually nil. The implications on economic activity are threefold:

First, the democratization of production will create the needed supply to fill out the demand curve. Second, the transaction costs of distributing these products is virtually nil. And finally, with the aide of search engines, reviews and blogs, buyers can easily find and evaluate these ‘fringe’ products.

If Anderson is correct, then video-game publishers who continue to rely on traditional models of game development and distribution may eventually become a cautionary tale of the Long Tail era.

Just how the video-game industry should embrace The Long Tail and how video-game development, distribution and consumption will change as a result of this phenomenon was discussed in a GameCafé format at a recent meeting of the IGDA at Los Tios Mexican Restaurant on Crescent Street.

With the help of a moderator, 8-10 participants discussed one of the forces mentioned above. After a period of 15-20 minutes, the groups rotate to another table and the new moderator would give a summary of what the previous group had said. The cycle repeated until all participants had discussed each of the three forces.

Over 60 members attended the meeting and while many left knowing that the Long Tail will change the industry in the long-term, for now, little will change due to the inordinate number of barriers that prevent independent designers from creating and distributing their games. Highlights of the discussions are found below.

Democratization of production

The Long Tail theory predicts that if the tools of production are virtually free, the supply needed to fill out the tail will be created. While many members agreed that democratization of production tools would indeed create the needed supply, they don’t foresee it happening anytime soon.

To begin with, to create a video-game today you need to have a programming background. Programming an interactive game is a fundamentally different process than recording a linear series of actions, such as when an independent film maker or musician records their work. Creating a video game can only be done using the procedural language of code. A tool similar to iMovie for non-programmers would require considerable resources, and since console manufacturers make it virtually impossible to create cross-platform games (even with the help of emulators), the incentive to create such a tool does not exist. Indeed the manufacturers want to prevent such an event from occurring because they want to control the marketing of their brand. Microsoft’s XNA project is an intriguing idea, however, one of the terms of using the product is that developers must market their product through Microsoft’s channels. Open source products might do the trick, but once again are limited in their scope due to console restrictions. So for the time being, the only way non-programmers can make their own games is to rely on mods, which places inherent limitations on the variety of games available.

Obtaining funding from government sources might help. Presently, video-games are not regarded as a cultural industry and therefore aren’t eligible for the same type of funding. If the government recognized video games as an art-form, sponsorships could be given to talented developers to make the required tools.

A few dissenters believe the tools needed to democratize production do exist today in the form of ARGs and Flash-based games. With ARGs, non-programmers can use existing media to create enriched and interactive content. The beauty of the ARG is that it doesn’t require the producer to be a talented programmer. And with Flash-based games, while limited in its ability to create interactivity, if designed properly, it too can create enriching gaming experiences. Indeed, by creating Flash games, one can easily learn the basics of video-game design and then endeavour to create more complicated games using other gaming engines.

Connecting Suppliers to buyers

A Long Tail market contains a large supply of content available to consumers. In order for the consumer to find the selection they want, they will seek information from credible sources. In a Long Tail market, peer reviewers play an integral part in determining the commercial success or failure of a product – which with radically reduced production and distribution costs, can be a very small number of sales.

Participants agreed with Anderson’s premise that buzz and referrals are needed to generate interest in obscure titles. They also agreed that consumers are far too savvy to be suckered into public relations ploys. Long Tail shoppers will seek another opinion if they feel the information they’re receiving isn’t credible.

One participant believes the implementation of a digital rights management system which cross-links the game credits with other sites, will go a long way toward helping generate the needed buzz. Publishers can better control who links to their sites and how can filter out sites that contribute to negative buzz. The more cross-links that exist, the higher the rankings a videogame will receive in popularity. It remains to be seen how successful this model might be.

Unfortunately, there arguably aren’t enough games in existence to fill out a real Long Tail for the game industry, and many past games have been rendered obsolete with the introduction of new operating systems. Backwards compatibility is always an issue in the maintenance of a Long Tail in a digital medium. Regardless, even if the backward compatibility problem were solved, it remains to be seen if 13 year olds really do want to play classics like the original Mario Brothers and Zelda.

The opening of distribution channels

One of the problems for independent designers is that they only have independent distributors, retail stores, big studios or publishing companies to distribute their games for them. Getting to the consumer is virtually impossible due to the bargaining power these bodies have over the independent producer.

To even the playing field, the video-game industry needs its equivalent of iTunes. This service tracks buyer preferences and recommends other titles based on the consumption behaviour of other buyers. Just how this service would work, and how it will overcome the cross-platform problem is another debate altogether, but participants all agreed that such a service will go along way toward improving the distribution of video games.

In the meantime, independent producers will have to resort to viral marketing tactics to get their message out. Relying on non-traditional marketing channels like YouTube, blogs and the like is the only way to get through the word out.

Surprisingly, the malaise that affects the console side of the business does not apply to all parts of the video-game industry. Currently, there are thousands upon thousands of games designed for cell-phones and other mobile devices. For a nominal fee, a user can download a game and play it for a brief period of time. Many members commented that they don’t have the time to play games with hundreds of hours of gameplay. Older gamers can only spend a few hours a week at the best of times. Games designed for cell phones may not be very complex, but if the gameplay value is high, these users won’t mind spending a few dollars for a few hours of entertainment. Today one can buy disposable cell phones. Imagine if they were outfitted with a preloaded game, and once the game ends, the user can drop the phone into the recycle bin?

It very well might be that the mobile gaming industry will be the source that springs the Long Tail effect into life.

Meeting Photos