Android handset makers and Windows PC manufacturers face the same challenge: how do you differentiate your product? The fact is, under the hood, these devices are running the same commodity hardware. There might be several (if not dozens) of Android phones at the $200 price point, but, because of the economics, they are running nearly identical hardware. The same is true of similarly priced laptops — the manufacturers, in order to maintain a certain margin per unit, all have to use very similar hardware inside, thus all the laptops at a given price point have roughly the same performance profile.
At the software layer these machines are running Android or Windows 7, so the manufacturers can’t differentiate here either.
(All this paints Apple’s strategy in a favourable light. They have their own proprietary A4 and A5 chips inside the iPhone and iPad, respectively, and they have their own operating systems.)
So if you can’t differentiate on hardware or software, how the heck do you stand out from the competition? Design is always an option — this includes the look and feel of your device, as well as the materials you use. But design can only go so far. But two companies are trying something different: Sharp and HTC.
HTC is enabling users to unlock their phones. Android enthusiasts have been clamouring for the ability to run custom software that has complete control over the hardware of their phones, and HTC has stepped up to the plate. I love this strategy because it converts the geekiest of the Android geeks into members of the HTC faithful. Social media has given these users a voice, and HTC has been listening. This listening has given them a strategic advantage over the competition (at least in the short-term). That HTC used Facebook to inform the world of this decision is no mistake.
Sharp, meanwhile, is taking a different tact for differentiation: bundling in other services. In Japan next month Sharp is releasing a Yahoo Phone that runs Android. Serkan Toto at TechCrunch explains:
[...] what may sound weird at first is actually not that surprising a news item, given that Yahoo is the country’s biggest website. Add to the fact that the country’s third biggest mobile carrier SoftBank, the provider of the phone, is Yahoo Japan’s biggest shareholder, and the emergence of such a handset makes even more sense.
Yahoo Japan has a paid ($4.95 a month) version of the site, and people who buy the phone get free access for the next two years. They also get additional “points” to spend through Yahoo Shopping (not too sure how that works…). Bundled services with a phone purchase are a new thing so it will be interesting to see how consumers react.
Today’s purchase price is a 63% premium over Friday’s closing price. But it’s just a 10% premium over their January price. ($40 purchase price today versus the $36.34 peak.)
You can do three things when the markets plummet: freak out and sell, chill out and hold, or go bargain hunting. Google went bargain hunting today.
But Apple isn’t known for big, splashy acquisitions, and purchasing either would certainly qualify as big and splashy. And consider these M&A statistics from the Wharton website:
83% don’t create value
50% actually destroy value
This is usually because executive compensation is tied to growth targets and/or market cap, and acquisitions are a quick and dirty way to achieve those objectives. Meanwhile, Steve Jobs pays himself $1 a year. So if only 17% of acquisitions actually work, and Jobs isn’t financially motivated to artificially grow the company, don’t expect a major acquisition from Apple anytime soon.
Consoles used to be 80% of the industry as recently as 2000. Consoles today are 40% of the game industry[.]
Is he talking about revenue, titles shipped, or time spent by consumers? It’s not clear. But with social games (Zynga on Facebook) and new mobile platforms (iOS, Android), it’s clear that a shift has occurred. And Riccitiello is shoring up their portfolio with acquisitions like Popcap and Playfish.
More from Riccitiello:
I would argue that there’s more to be provided in terms of value for the consumer in micro-transactions and social experiences and driving those better in cross-platform gameplay between a console and a PC and a handheld device and a social network than there is supercharging graphics.
I love that the CEO of the one of the world’s biggest gaming companies is talking about cross-platform gameplay. Typically when a game went multi-platform all that meant was that you could play Need for Speed on your PC as well as your console, but they were essentially the same thing with a few tweaks. But cross-platform? Imagine playing an RPG on your console, but being able to play with the character with your friends on Facebook, and levelling up via mini games and side quests on your iPhone. That’s cool. And any kind of persistent world game (think FarmVille) could even push updates to you via text message that you could respond to with commands (those tomatoes are ready for harvesting!).
They sold every iPad they could make last quarter. Which suggests they could have sold more if production could have been ramped up further. Couldn’t they use some of that $70 billion to make that happen?
I think we actually had our golden age when game development was using floppy disks and it was an open free platform when we could all make games like we wanted to make. Nintendo came along and software licensing came in and we’ve been in a dark age since then.
…
How many great companies have been built on the world-wide web, which is an open platform. The list just goes on and on, and Nintendo’s been doing things this way for 25 years and there are no great companies that have been built on the back of Nintendo.
Would Electronic Arts be the powerhouse that it is without Nintendo? And if we expand his Nintendo comments to include consoles in general (they all have software licensing and are more restrictive than developing for computers, after all), we can make the case even more. EA’s roots are as a PC game maker (Wing Commander jumps to mind), but EA really started growing when it started publishing games on consoles. Skate or Die (Atari and the NES), the original FIFA game (Sega Genesis and SNES), Madden (Sega Genesis), Need for Speed (Playstation), the list goes on and on. All these games may have started on PCs, but I think there’s consensus around the idea that they hit the big time on the consoles.
Hawkins is highlighting the difference between publishing on a console versus, say, Facebook or PC publishing. I’m not sure what the licensing fee is now, but the wiki article about Madden says that Sega took $8-10 per cartridge sold for every game on that system. That adds up to big bucks real quick, and Hawkins, a guy who started the Madden franchise on the Apple II (where he paid zero licensing fees) no doubt could have developed even more games with that money.
But does paying licensing fees really stifle innovation and prevent great companies from being built? I think it has more to do with the nature of the platform. The most innovative games these days are social, but these types of games needed social networks in place before they could have existed. If Facebook charged a licensing fee would the rise of Zynga, EA’s Playfish and others have been stifled? I don’t think so. It’s not about licensing fees, it’s about the nature of the platform.
[Y]ou’ll never be put in the awkward situation of receiving a friend request from someone you don’t really want to be Google+ friends with. Nor will you have to face the awkward decision of whether or not to defriend a former confidant with whom you’ve fallen out. Just remove them from your circles, which are never revealed to other users. Other than that, Google+ looks and behaves a lot like Facebook
Those Circles make a lot of sense. Google in their own words:
Yes, this sounds sort of like a pampered problem and perhaps somewhat of a dick move — I should be so lucky to get so many emails, right?
(If I were his editor I would have removed “sort of” and “perhaps somewhat of” from that statement.)
MG’s prima donna antics aside, email overload is a real problem. But is the problem really email? What if all those people emailing called you instead? Not realistic, you say? Okay, let’s say a person gets a 1,000 emails a day. What if instead of emailing, 10% of those people called? That’s a 100 phone calls a day. You think 1,000 emails are annoying, wait until 100 different people call you.
So, again, the problem isn’t email. The problem is that you hit a certain point in your career/life where there’s just too many people who want to talk to you. And nobody knows what the solution is. (And don’t tell me Twitter is the solution to all these woes!)
Of all the movie based video games I’ve played over the years, Angry Birds Rio is one of the best implementations I’ve seen. It’s just smart. I play it on my iPad and my Android phone (I’m nerdy like that).
Most movie/game tie-ins are rushed marketing ploys that deliver an uneven gaming experience. But Angry Birds Rio is easily the most visually appealing entry into the series, and is just marketing done right. The game has six episodes that you can play through but they’re released only one at a time. Each episode actually traces the plot of the film, and marries it to the already addictive Angry Birds gameplay. The first one was available before the movie was in theatres. Because it’s Angry Birds I downloaded it right away, and this was the first time I had heard of the film. After playing through that I actually went to go see the movie. So a free game (on Android) actually influenced my behaviour and got me to pony up the big bucks at the theatres.
And as the months have gone on, new episodes have opened up. This keeps Rio top of mind, even well after I’ve seen it. And the timing here is brilliant: the last episode will no doubt open up around the time movie is available on DVD and download, and in time for the holiday season.
A great game that keeps you playing for months as new levels become available keeps the movie top of mind for the better part of a year. When was the last time your marketing campaign could claim to generate that level of awareness?
