Protecting Profits Over Loyalty: A Warning From the Gaming Industry : Under30CEO Protecting Profits Over Loyalty: A Warning From the Gaming Industry : Under30CEO
arrow
Join the Under30CEO Community We deliver tips, tools and inspiration for your business. Daily to your inbox.

Protecting Profits Over Loyalty: A Warning From the Gaming Industry

| April 13, 2013 | 0 Comments

SimCityWith the gaming industry worth around $100 billion, game publishers have been understandably keen to protect their assets. The latest trend has been to use always-online Digital Rights Management (DRM), whereby the gamer must be connected to one of the game’s servers in order to play the game. Without this connection, you’re not playing.

The most recent videogame to use this technology was the latest version of SimCity, launched on March 5th. The popular game, where you build and control a city, has won numerous awards since the first version was released in 1989, grossing considerably more than the most popular Hollywood films. The game’s publishers Maxis were therefore under pressure to ensure the 2013 version delivered to a demanding audience.

However, despite being well aware of the game’s foreseen popularity, Maxis had not planned for the deluge of purchases on the release date. With constant server access required by millions, the videogame everyone was waiting for constantly crashed, rendering it unplayable.

The fall out

The combination of social media’s near-instantaneous coverage and vocal, tech-savvy gamers meant this couldn’t simply be brushed under the carpet. The news quickly trended on Twitter, sending it viral to both industry websites and the mainstream media, such as the Guardian and BBC.

Amazon, which offered the game as a direct download on their website, temporarily suspended sales of the game in US due to the server issues. With users allowed to post reviews, the game is averaging 1-star reviews as a result of the issues. Meanwhile, a respected gaming website awarded the videogame a mediocre 5/10 rating due to the frustrations in attempting to play.

In a desperate bid to improve connectivity, Maxis have disabled some features of the game. Whilst appeasing some, the reality is people aren’t getting what they’ve paid for. Vitriol has ensued with many seeking a refund. Anger has increased throughout the gaming community due to certain countries having more ambiguous consumer rights than others. Purchasers from the biggest market, the USA, have no rights to a refund, whereas European customers have a 14-day cooling off period.

The response

Whilst Maxis and their owners EA have been apologetic and determined to fix the problems, it is fair to say the damage is well and truly done. For many, the unpreparedness for one of the year’s most hotly anticipated videogame titles is a puzzling, unforgivable failure.

Maxis have been looking to make amends with regular blog updates from their Senior Vice President and a constantly updated Twitter feed. Their peace-making offer to customers is a free game from EA’s portfolio; generous perhaps, but some responses have suggested they’re not interested in a game they’ve never before considered. Nevertheless, the humility shown has made an impact in winning back over a substantial amount of irked gamers. The question is, how much has this cost Maxis and EA, versus a bigger initial investment in testing?

The warnings were already there for Maxis when it came to DRM. The technology is nothing new, being used for e-books and movies. Other major videogame titles have had the same problems, albeit on a smaller scale, with rival publisher Ubisoft dropping DRM as a result late last year.

However, with DRM being the only real way of preventing piracy, Maxis have no intention of following suit, despite an online petition garnering over 67,000 signatures against the technology. The question is whether DRM, with the incredible complexity involved, will ever be able to deliver zero piracy and happy customers. If not, should the consumer pay for the shortcomings?

Food for thought

Certainly, if the latter is expected, it isn’t a model for customer loyalty. When treated well, the word of mouth buzz from the gaming community can generate more sales than review sites ever could. With this momentum abruptly halted, should Maxis have followed Ubisoft in waiting for technology to improve and therefore accepted the risks of piracy? A difficult one to answer without knowing how game sales would have differed with each scenario, but it serves as a reminder to businesses across all industries that chasing short-term profits should not be favoured over looking after loyal customers. In difficult times, it’s worth noting it has been shown it is as much as 10 times more costly to win a new customer than retain an existing one.

The UK horsemeat scandal serves as another example of what happens when companies compromise preparedness to increase profit margin. More vigorous control of the supply chain would have saved many a supermarket’s blushes, but complacency crept in and the results are out:  3 in 5 consumers have changed their eating habits and local butchers are claiming boosts in sales.  Maxis probably haven’t considered the comparison, but similarities are there.

One positive from this story is that Maxis hasn’t shied away from the situation; they’ve used social media to react as quickly as the initial negativity spread around the World. Years ago, situations like these would have been dealt with by legal representatives or a cold press release. Maxis have demonstrated that dealing with the situation head-on certainly helps with damage limitation and has won back customers that initially vowed to never return.

We think 2013 is the year of customer service. Check out the previous article we wrote for Under30CEO on improving competitiveness through existing clients.

This article was written by Helen Cross from the British Assessment Bureau, providers of quality assurance, certification and training in order to improve service and customer satisfaction.

Image Credit: Forbes.com

Opt In Image
Awesome People + Awesome Places
Travel around the world while making new friends

Under30Experiences curates awesome experiences around the world for young travelers.

Tags: , ,

Category: Startup Advice