MUMBAI: The music industry is grappling with digital transformation even as physical CD sales have been evaporating. This was a scenario that the gaming industry was grappling with barely half a decade ago. Hence, Disney UTV digital MD Vishal Gondal’s keynote address on – ‘Lessons from Gaming’ on the second day of Radioandmusic.com’s Nokia Music Connects 4 should provide some food for thought for the music industry.
Gondal started the session by laying out what he calls his Five Commandments, something which he puts himself and his staff through at regular intervals. And something which he believes is what the gaming industry has religiously followed over the past three or four years.
“The gaming industry was hit by dropping sales of physical game CDs and cartridges and what have you, as everything got digitised online or on the mobile. It fought the digital transformation for quite sometime, and kept on shrinking but only when it embraced digital did it start to grow again. The gaming sector has ballooned to one generating revenues in excess of $100 billion from being just $10 billion. Digital has taken the business to a whole new level. The gaming industry has seen eight gaming companies such as Zynga and Rovio Entertainment getting listed and going public,” said Gondal during his opening remarks. “There are some fundamental rules which allowed the gaming industry to bounce back and grow. I call these The Five Commandments.”
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Gondal’s commandments:
* The first commandment: Thou shall create platforms and not planets
* The Second Commandment: Honour Thy user and Thy community
* The Third Commandment: Thou shall not kill a pirate
* The Fourth Commandment: Thou shall not beat a dead horse
* The Fifth Commandment: Thou shall kill the middle man.
Gondal said the game developers don’t just build individual games, they keep in mind that they have to have extensions which lead to multiple games, giving the consumer a plethora of choice, thus building a franchise, a platform. Gondal stated that the Zynga network had succeeded in acquiring 200 million gamers with the introduction of Farmville, which became very popular with gamers who later sampled various other products like Cityville, Petville and more from the Zynga fold. A similar strategy was used by Rovio for its very popular game ‘Angry Birds’. Rovio entered the market with one game and later on branched to different products like Angry Bird Star Wars.
Gondal pointed out that the gaming sector has put the consumer up front. “The Top Scorers of games are given prominence; hence the consumer feels he would like to gain the recognition and strives further to get and maintain that. The customer experience is at the centre of it all. Tell me which music company has highlighted the Top listeners of music? Activision Blizzard, Inc., ‘World of Warcraft’ has registered 12 million subscribers till date earning about USD 10 billion,” informed Gondal.
Gondal said that piracy, which has always been considered as low point by any business, had actually helped the gaming space. Thus the third commandment is was not to kill piracy; give away things for free; in the process the pirate gets killed. He said, “Today 19 of the 24 top grossing games apps are offered for free. And with the popularity of those apps, in India alone, 200 million downloads have been done courtesy the Nokia store. You will make money from making the users spend to improve the experience of the game further, like gamers have to progressively buy in FarmVille.”
The fourth commandment is self-explanatory he said, but if things are not working out, it’s best that, you move on, don’t stay put it in the same place.
Detailing the fifth commandment about killing the the middleman by offering games directly to consumers rather than through distributors or retailers or aggregators, Gondal said, ”Disintermediation of the business has also escalated as companies across the world are able to put forth their games online and earn revenue. The business is no longer about the retail aggregator, it has moved to companies like Google and Apple. ‘Temple Run’ was created by two people and now it’s earning millions. “
