Blue Oceans

I warned all of you that this blog would be not only about game design and development, but about business too. Which is why I’d like to talk a little about the concept of ‘blue oceans’ today! You can hardly wait!

I recently read this amazing business book called “Blue Ocean Strategy – How to Create Uncontested Market Space and Make the Competition Irrelevant. It talks about “blue oceans”, which are all-new markets that you can strive for (in opposition to “red oceans”, which are where all the competitors are, and are ‘bloody’ from all the fighting).

The book outlines not just theory, but tools for reliably finding new blue oceans for your business. This includes making “strategy canvas” graphs of your competitors offerings and your own, and making sure your chart looks different, not too jagged, and that you have some new axes that none of your competitors are even ranked on. This is just one of quite a few tools it describes for finding new markets and making sure you are differentiated enough.

Some of the best takeaway points include:

1. Create exceptional buyer utility. This sounds completely obvious, but the book talks about many examples where companies THOUGHT they were creating real utility, but were actually creating capabilities instead. For instance, a high-powered new game console system without any killer launch titles could fall into this trap.

2. Assign price to be easily accessible by majority of buyers. Many industries (like video games) seem to fall into this trap, choosing pricing according to a model everyone assumes.

3. Figure out how to attain your cost target to profit at this strategic cost. If your business model won’t let you profit at the price in #2, it’s important not to lessen buyer utility, but to change your business model to allow this price.

4. Remove all adoption hurdles in actualizing your business idea. Technical constraints, resistance to the idea by retailers or partners, customers not owning credit cards, download size, ease of installation, etc.

If you have all of these things, you may have successfully formulated a commercially viable blue ocean idea. It all sounds rather simplistic in my quick summary here, but I ensure the book is totally fascinating, and filled with some amazing examples of companies and people creating huge value with very little (something that’s quite encouraging for a video game startup right now!).

So how does this pertain to video games? I’ve been thinking a lot about this. Everyone talks about the escalating costs of game creation, the lack of innovation, the death of independent developers, etc, but by targetting new blue oceans of consumers, I think we can grow this industry and solve many of these problems.

Specifically, to me this means the following: a) create games that the majority of the population can afford and b) make games that can easily be bought, installed and played and c) make games that appeal to a whole new demographic not currently targetted or served by existing games (the specifics here will have to be a secret for now). We are already planning on doing this for our future games (@ Unknown Worlds), but this book makes me even more confident in the approach. I think that by making ‘hard-core’ games that are cheaper and appeal to a much bigger audience, we can get out of the bloody red oceans we are fighting with EA in and have a more prosperous future without Madden sequels and skyrocketing budgets.

You guys have any thoughts? Or is this entirely too boring and not what you were hoping to get out of Flayra’s blog? 🙂