Week 5: Big Data and Marketing Research here I come...

I just read the headlines of the materials in this module.  Awesome! 

I can't wait to delve into the video titled "Brief History of the Internet".  I hear something like that and the first thought that comes to mind is, I wonder if that invidual finished it -- finished the internet.  Ha!  But nonetheless it sounds intriguing. 

Also, I am looking forward to reading more about Big Data.  My IT buddies from my past life have been talking nonstop about big data for about the past 12 months.  I'm curious what all the fuss is about.

And finally, I cannot wait to checkout the report on which of the world's most valuable brands are the most engaged.  Time to get crackin'...

Business Model Canvas: WMS Gaming

I chose to model my own company, WMS Gaming, for this Business Model Canvas assignment.

WMS Gaming is one of the four largest slot machine vendors across the globe.  They design and manufacture the Electronic Gaming Machine cabinets (EGMs), and are recognized as the innovator in the gaming industry when it comes to the game content, which they also design, produce, and test in-house.  The game studios produce video reel AND mechanical reel content for slot machines, as well as game content for video lottery terminals (VLTs), for sale and distribution across the legalized gaming industry worldwide. Additionally, WMS recently launched a competitive poker platform. 




Business Model Canvas:  WMS Gaming

    

WMS Gaming, not to be confused with the online division Williams Interactive, sells and leases gaming machines and game content to casino operators, route distributors, and government lotteries worldwide. They operate in a B2B fashion, though the creative teams pay very careful attention to slot player segments, and research their preferences and behaviors.  The company uses account executives to directly sell to casino operators and government lotteries, as well as uses route distributors in various markets, primarily international markets. 

Revenues are generated directly from cabinet and game sales, but a little more than half of the overall revenue comes from the leasing of premium games like Wizard of Oz, The Lord of the Rings, amongst many other titles. Costs are primarily related to the manufacturing costs of the EGMs, brand licenses, and R&D spend on the creative talent.  WMS has the highest percent of revenue spend on R&D in the industry, but they pride themselves on that and believe in this investment as they continue to seek being the industry leader in innovative game content.  They have recently brought such innovations as Community Gaming, Adaptive Gaming, and motion chairs to the casino industry.

WMS does necessarily require leading-edge performance and state of the art graphics, but they regularly seek that capability for the extra curb appeal and entertainment value it provides players. The real value, though, is derived in the overall experience that the creative team produces, particularly the math model and game mechanics, which are geared at certain player segments and niches. WMS protects these ideas with intellectual property patents.

The competitors focus more on their systems businesses, in which WMS essentially does not compete, or licensing branded content, or being a low cost, copycat content provider, respectively.  One in particular is primarily focused on being the overall market share leader.  Hence, WMS' competitive advantage is with their innovative content, intellectual property, and creative game designs targeted at certain player segments.

Week 4 - Post 2

Well as suspected, I am really enjoying learning about the particular business models that have evolved in this digital age.  But before I go any further with the options "interesting readings", I thought it best to pause and summarize a few sound bites about the "required reading" materials.

I like in particular how the Business Models on the Web article succinctly stated many of the typical categories.  It is almost too simplistic, but they capture the essence of the models well.  And I loved the video on the Dollar Shave Club YouTube channel. The use of video to not only tell a funny and edgy story, but to be the primary marketing conduit for selling the product, was absolutely fantastic.  And the whole debate about "bricks versus clicks" and anecdotes about Warby Parker and Hointer were, in a word, very enlightening.  But what stood out most to me was the professor's Breeze presentation about the various business models and Zynga in particular.

Professor Talbott's summary about the revenue model was spot on, but there really is more to the story... 

I had the pleasure of hearing a presentation from Zynga's former COO a few months ago.  Their revenues are clearly based on game sales, but typically Zynga earns far more on the game down the road and not at launch.  That is contrary to say something like EA's John Madden NFL 25, which will earn the crux of its revenue when it hits shelves in August. 

Dissimilar to EA games, Zynga launches their games initially with as minimal an investment as possible, and then ramps up their studios to create additional content for that game. The reason is that they know their players are casual gamers and will finish the game or typically get bored with it more quickly, and therefore players need a compelling reason to keep spending on it.  And that is the ticket -- these players spend their money on "virtual goods" provided within the game.  In fact, the virtual goods sold garnered Zynga nearly $1B in revenue in 2011, which was about 95% of their total. Now that is a powerful model.

For example, Zynga's hit FarmVille had several new services added post-launch.  And as those revenues grew, so did their studio in order to make more such content.  All of the points in the graphic on the left are expansions of FarmVille that enabled the sale of "virtual goods" and bolstered revenues for the company. Point being, it is not just about the game content and initial sale for Zynga, but rather about the additional sales it can garner within the game.  Zynga is acting as a virtual merchant by selling additional content.

Additionally, what has really helped Zynga's model explode over the last few years is the growing number of mobile internet users and the widespread use of tablets.  Smartphone audiences have been projected to reach 151M users and tablets to reach 106M users by the middle to end of 2013. And 14% of smartphone gamers (i.e. Zynga's demographic) spend about $25 per year on virtual goods.  And over 10% of them are spending over $100 in the same period!

There is a lot of money in the online gaming space, there is no question.  And I look forward to business models yet to come knowing that...especially when we consider the legalization of online wagering, as already being done in Delaware, New Jersey, and Nevada.  Wow!

Week 4 - Post 1

I will start by wholly admitting that this week has been nothing short of difficult.  I have started and stopped the assignment and materials for this week a few times, which is entirely unusual.  But between running four studios, conducting video shoots for The Price Is Right in LA this week, and having two sick kids under two years of age at home all the while,it has been nothing short a challenging week.  But I don't let any of that stop me!

This week I have been absolutely looking forward to learning more about business models particularly in this web 2.0 era.  Of most interest is the article about mobile devices changing the traditional brick and mortar retail, as well as the business models of news websites.  And I am particularly keen on reading more about from Business Model Generation, as that book got off to a very compelling start in my opinion...

Week 3 - Post 2

This week's material was different in scope than I had expected.  To me the topics were widespread.  But I have been trying to identify the common denominator amongst all of the materials that I read, watched, and listened to thi week.  What stands out as the common thread woven through all of them is connectedness.

The article The Origins of Social Media mentioned a lot of various examples, but underpinning all of it was this sense of "connectedness" amongst the online communities.  The term "blog swarm" that they mention is a great example of such connectedness, and how users can rally around a notion or a cause and impart their will, at least to a degree.  And the article The Seven Segment System for Online Marketing mentions seven usage characteristics of online users, but again underpinning this is how to connect with the consumer. Even the Death of Segmentation article is about connectedness with the consumer, as it makes the point about segmentation must now be geared to the individual.  Again all of this material related to new ways of connecting with the consumer.

So now I ask myself, why is this important?

It is important, in short, because we are living in the dawning of a new age. The DIGITAL AGE.  People nowadays are immersing themselves in digital worlds...virtual worlds...and that is how they are relating to others in the "real world".  And the traditional media outlets that marketers once used are being consumed less as people move towards other channels such as Facebook, Twitter, LinkedIn, web TV, etc. This piece I find most intriguing, so I explored it further.

I came across a recent series by Boston's NPR news station, WBUR, about how the use of digital devices is changing our lives.  The first installment resonated most with me, because it discusses how personal relationships are being affected by this digital age. Therein it cites a survey by Time Inc. done in April 2012 that indicates "half of all Americans say they prefer to communicate digitally than talk in person."

That statistic is bewildering! 

It is no wonder marketers are having to change their tactics. It would seem that individuals themselves are having to change their tactics 1-on-1 with each other!  So given all of this, marketers have to educate (and perhaps reeducate) themselves on how to best utilize these communication channels and social media outlets in order to "connect" to their consumers. 

 So then I ask myself, "Well now what?"  

Well, the culmination of what I have learned this week can be summarized quite concisely.  Companies that focus on connecting to consumers via these various social media channels, and engaging with those individuals, and all the while maintaining authenticity and transperency, will have greater success with respect to improving their brand and increasing awareness thereof. 

Week 3 - Post 1

After reviewing the schedule for this week, I have to say I'm excited to learn more about this notion of segementation in this digital age. 

It resonates with me, because my team and I have recently invested a great deal of time and money in trying to segment our slot machine players.  We first viewed them by their level of spend and frequency of visits, but then explored their behaviors, motivations, wants and needs using several attributes.  There is a lot of macro level information available online, like this article for example that says the most common player is a 55-60 year old woman with an annual income of greater than $55k. But we wanted to take it further, since we make the games. Our intent is to understand the types of games certain types of players want and why. 

A Lens for Slot Player Segmentation

However, I get the impression from the title of this particular module, Micorsegmentation, and the article titled "The Death of Segmentation" that I'm going to become quickly enlightened on how this digital age is allowing and maybe forcing companies to look at their customers at an even more granular level. 

Week 3 - Post 1

After reviewing the schedule for this week, I have to say I'm excited to learn more about this notion of segementation in this digital age. 

It resonates with me, because my team and I have recently invested a great deal of time and money in trying to segment our slot machine players.  We first viewed them by their level of spend and frequency of visits, but then explored their behaviors, motivations, wants and needs using several attributes.  There is a lot of macro level information available online, like this article for example that says the most common player is a 55-60 year old woman with an annual income of greater than $55k. But we wanted to take it further, since we make the games. Our intent is to understand the types of games certain types of players want and why. 

A Lens for Slot Player Segmentation

However, I get the impression from the title of this particular module, Micorsegmentation, and the article titled "The Death of Segmentation" that I'm going to become quickly enlightened on how this digital age is allowing and maybe forcing companies to look at their customers at an even more granular level.