The Zeebo Console

November 12, 2008

Today Tectoy is announcing a major breakthrough for the Brazilian game industry: the Zeebo game console. Zeebo is one of those rare systems released outside USA or Japan. This is exactly why it has a high chance of success.

Introduction to Zeebo

Zeebo Game ConsoleZeebo is a game console based on Qualcomm technologies for high-end mobile devices. It has a nominal processing power somewhat equivalent to a PSP, OpenGL|ES 1.0 hardware compatibility over a dedicated GPU and is capable of 3G mobile network connection (HSUPA), scaling back at 2.5G (EDGE) or 2G (GPRS) where necessary. It features BREW 4.0 as the operational system, three USB ports for joysticks and accessories, one SD card port, and composite video output along with stereo audio. There is no media – games are downloaded through ZeeboNet network, making Zeebo the first of the forthcoming download-centric generation of game consoles.

Clearly the specs of the system aren’t designed to match the technology of the current seventh-generation. But this is not the point. The goal is rather to implement viable solutions for two major problems of the console business on developing countries – price and distribution -, while presenting good value for players.

The Problem on Price

As I once wrote Brazilian game market suffers greatly from piracy. The first major reason is price.

Due to heavy taxes and high logistical costs, an official console game costs around US$ 110 and PC games around US$ 70. Considering the per capita income is US$ 9k against US’ US$ 47k, one could argue that buying official games is not only 2-3 times more expensive in absolute price, but also 19 times more expensive when income is factored in!

But Zeebo games are downloaded using 3G networks. As a mobile service instead of physical units, taxes are much lower and logistical / manufacturing costs are non-existent. Therefore, games can be priced from US$ 4.45 to US$13.10.

Digital Distribution Is The Key

The other major reason for widespread piracy is the distribution aspect itself. In a country where logistics are expensive due to infrastructural problems and illegal street vendors are commonplace, one just can’t compete on regular terms. Black-market reselers nowadays can get new releases way faster and way cheaper than any regular, tax-payer CD reseler will ever be able to.

But a solid digital distribution model is a viable way to fight back for two reasons. First, new game offerings will be instantly available from ZeeboNet to all players of the country, which is faster than even the fastest black-market reseler. Second, the library available online will eventually feature much more game variety than a street vendor can carry on backpacks. (Also enabling a Long Tail-based strategy.)

Think Global, Act Local

Brazilians do like video-games and play a lot. Despite the fact PS2 never had any official representation in the country, Brazil alone accounts for 2% of all PS2 units in the world. Microsoft estimates over 500 k units of various game consoles are imported every year, and over 300k 3D video cards for PCs are sold every month. But strategies and models of traditional cardboard-and-plastic distribution of global actors have proved again and again to be completely inadequate for the country’s peculiarities.

The game industry needs products and strategies that adapt to local behaviors instead of ignoring them. It needs strategies that treat pirates as the competitors they truly are today and offer sound advantages for buyers of official products.

I firmly believe the Zeebo proposal is a viable business model option that can finally start to monetize and legalize a game market that already exists but is dominated by mafias. No doubt this is a brave move in a country Edge Online once defined as a member of The Lost Continent.

I’ve been working on Zeebo games production for 5 months now and it’s pretty exciting to be a part of this innovation.

UPDATE: also check out my latest post on Zeebo, How To Fight Back at The Lost Continent

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Posted by Tex Pine

Your Game Company: Critical Success Factors

November 6, 2008

The Critical Success Factors (CSFs) are those business aspects of utmost importance for your company survival. They must be considered on every single decision of the company, and if you fail on one of them for too long your business will fail.

CSFs always come in a number of 3, regardless the kind and size of the business. This is an arbitrary number small enough to force you to find and synthesize the very basic needs of your business, and large enough to allow for complex strategy considerations.

What are the most common CSFs?

A generic set of CSFs for most business would be:

  • New product development;
  • Good distribution;
  • Effective advertising;

If any company doesn’t have some degree on those 3 it’s dead right? So why bother? Well, you could use them, but markets always have their own particularities that this generic set might not truly reflected.

What kind of company have a different set of CSFs?

For example, consider corporate attorney firms. Those firms are dealing with clients worth millions, perhaps billions of dollars. They certainly need good advertising (almost always by word-of-a-mouth) and distribution (prospecting potential clients), but the CSFs would be better represented by this set:

  • Solidity
  • Secrecy
  • Trust

Solidity is the first factor: every aspect of the company must be (or at least look like) rock-solid – the office, the clothing, even the graphic design of papers must be very corporative and classicaly designed. Secrecy means details of clients must never leak, and media scandals will end the career of all partners and employees. Trust is the last and most important CSF, and it’s also the most difficult to tackle. Only a “battle-proved” portfolio and back history can truly increase Trust, and that’s why new firms are only founded when the partners bring clients they already have from a previous job.

What about a game development company?

Typically, the CSFs for a gamedev house are:

  • Talent (Human resources)
  • Capital
  • Distribution channels

Talent is the most important factor. As of any software piece, games are a kind of product that demands an intensive intellectual/creative process, for an extended period of time. Without the right people and the right talent, you can’t go – period. So you must invest on finding those people, training them and keeping them excited about your company and your projects.

Capital is key for almost all gamedev houses. For start-ups or big actors, the capital need is of great importance to fund the very extended development and releasing period before any cash from sales arrives at the bank accounts. Hence it’s wise for a game studio to ensure investment streams to compete the project way before beginning the development.

However, there are cases of small studios and indie developers that operates with very few or no capital, and still pull out great games. For those companies, it is likely “Community & PR” would be a more important critical success factor to win with very few money.

Distribution is the last CSF. Final copies are cheap but development to get there is very expensive, so the company has to sell as many copies possible to reach break-even (paying investment). But as a non-essential, non-functional, emotional-appealing product, games need a distribution network that can also allow for impulsive-buying. Placing the box or the game banner at the right place, at the right time, is a form of art itself.

Further reading

For further research on CSFs evaluation techniques, check out this excellent resource. Also, check out these books of Talent Management, Capital Attraction and Digital Distribution.

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Posted by Tex Pine