Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Tuesday, March 22, 2005

Simulation Economy

I've argued that for the games industry, the licensing strategy is dominated, because the price of licenses will get bid up (via price competition or via M&A). I did some strategy work for an anonymous publisher a year or so back, where I argued thatthe dominant strategy is to position games as platforms, not just as brands. Platform effects dominate brand effects, because they create greater switching costs at a lower price, and in fact, create brand economies for smart publishers.

What does a game as platform mean? Well, for one thing, platforms let users build things on them. MS has realized the power of the platform notion, and here's a nice piece for context about Xbox 2's integrated microtransactions system, with which users will pay other users for vgoods. This is the infrastructure for games as platforms - unfortuantely, few publishers have the right competences to achieve a meaningful advantage.

-- umair // 11:38 AM // 0 comments


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