Playing for real: The games industry and social CRM business models

I’m a gamer. I can’t say that I have any dexterity or any mad skills when it comes to using videogames like Grand Theft Auto or Halo, or for any sports game that involves hand/eye coordination with a controller. But I do love to play (against the computer of course) games like Civilization IV, The Sims 3 or even Spore, because they challenge my strategic thinking. But even more than that, I like the latter three not because they let me customise the colour of my football jersey, but because they allow me to build a personalised version of the game that is to my liking.

Which is the key to a social CRM business model? Wha’? might be going through your minds right now. What in the world is Greenberg smoking? Or drinking? Bear with me for a second and I’ll run it by you.

Social CRM business model: Co-creation, collaboration and customers

One thing that’s been quite clear for a long time, and certainly been covered in the pages of MyCustomer.com, has been how the social customer has a new set of requirements when it comes to how they want to deal with the companies they care to deal with. They begin from a standpoint of “I trust my peers, not the companies I keep buying from.” The Edelman Trust Barometer, the trusted source on who the trusted sources are, found as far back as 2003 that only 22% of their respondents saw peer trust as the most important. But one year later, “someone like me” became the most trusted group for 51% and it’s never looked back.

That creates a conundrum for most companies because they have to win the trust of customers who are expecting them to behave very much like the peers that are already trusted. To do that, companies have to be different than they had been in the past. For example, rather than produce goods and services, they have to be the aggregators for goods, services, tools and experiences that add up to what the customer needs available to them to personalise the environment of the company they want to potentially work with.

But this creates a foundation for a different kind of business model, too. In the necessary contemporary model, the company acknowledges this customer transformation. What that means is that they have to be increasingly collaborative because the customer’s expectation is that they are going to get whatever it is they want to get from their relationship with the company – which could mean anything from a rewards system for their involvement in some level of the company, to a toolset which allows them to customise their interactions with the company. 

The benefit to the company of this level of collaboration and cooperation can often be real value. In fact, in the world of PC and video games, there is a direct monetary return – but even more so, a level of loyalty and perhaps even advocacy which, in turn, will drive sales.

Let’s see how that works in the world of games.

It’s a mod, mod, mod, mod, world

Back in 1996, a young hacker got the code to the id Software game DOOM and built a 'personal' version of the game to his liking. Rather than flipping out about 'intellectual property theft', the head of id Software, John Carmack, thought 'cool. That means that the kid will play a game that fits what he needs. I think I’ll give everyone access to the code. '  

While this might be a slight exaggeration, the concept of releasing software to the public – the game buyers – became something that was commonplace when it came to PC games. One of the most popular games of all time, Civilization (my personal favourite), saw an exponential leap in sales when Civilization II came out in 1996. The reason? It wasn’t cooler graphics, though it had that. It wasn’t just that creator Sid Meier listened to the fans' feedback and added more of the leaders, units and civilisations that they requested – though it was an early form of collaboration. The key? PC Gamer Magazine put it perfectly in their September 2009 issue: “The longest lasting innovation introduced into Civilization II was modding, fulfilling the ambitions of many of those who wrote letters to Sid. Mods and maps kept the game alive for years.”

A mod is simply a modification, the same thing that young hacker did to Doom. It is an effort to customise the game in ways that are engaging to the creators and acolytes of the modder (that’s one who mods, not slang for a parent). What makes this important is not just that it's user generated content (which it is) and thus fulfills the appropriate Social CRM buzz category, but that it is content that actually:

1. Is valuable to the customer because it gives them the gaming experience that they want.
2. Is valuable to the company because the customer is buying the game, using the appropriate tools they need to modify the game and then sharing the experience with other modders in online gamer communities, threaded forums and other locations where gamers congregate.
3. Is valuable to the relationship between the game company and the customer, providing a mutual benefit that creates advocates from the customers and allows the game company to be as transparent as needed to the gamers, so that the gamers have what they need to make the game what they want it to be.

This is an incalculable benefit. It drives sales and creates legends in gaming. What that means is that the combination of cooperation and advocates in the particular game’s universe drive sales. 

Last year, Electronic Arts released Spore,  their highly successful, somewhat of a pain in the.... game, which runs one through an evolutionary cycle from amoeba to space traveller. In June 2008, prior to the game’s September 2008 release, for $10 you could get Spore Creature Creator, an authoring tool, allowing the aspiring Spore gamers to create their creatures and place them into the community repository (and locally on their own PC) before the game’s full environment was available.  

The idea was to create buzz and drive sales interest prior to the end of 2008, making the September 2008 launch successful. The expectation was that the Spore gamers would create around one million creatures by end of 2008. Instead, by July 2008’s end, one month after the Creature Creator was released, there were 1,970,195 created creatures from the community of 691,242 members. This was over 50 days before the release of the full game

While the game had its problems, it has been wildly successful. By June 2009, there were over 100 million creatures, which drove 3.2 million copies of the game sold. But it didn’t stop with the game’s initial success.

Roughly a month ago, Electronic Arts released an expansion pack called Spore: Galactic Adventure. Its purpose was to provide a tool not just to create creatures, but to create missions that were under your control. You designed the creatures, the landscapes, the buildings, the actions, etc. The tool’s interface was simple to use and you could share the adventures with the Spore community. As of July 31 this year, more than 100,000 missions have been created.

The key to this model has been what Sid Meier said drove Civilization’s development: “We’re giving the player enough things to think about, to anticipate, to plan, that they’re drawn into the game and feel that they’re in control.”

Bringing it all home

The collaboration between the gamers and the games companies are a prototype for a social CRM business model. There is true co-creation – meaning an effort that is carried out between the customer and the company conjointly to add value to each and both. The company moves from merely producing products to aggregating products, services, tools and experiences that the customer can use to alter the interactions they have with the company in ways that are immensely appealing. This enhances the customer’s commitment to the company - and the community that the company supports reinforces the customer. Advocates are the result. Profits are the benefit. 

Over the next few months, I’ll be exploring how and where value co-creation and cooperation are being accomplished. Watch for it because if you care enough about social CRM to read this column, you care enough about the model your company is going to have to adopt. 

Now, go build a creature!

CRM expert Paul Greenberg is author of CRM at the Speed of Light (4th Edition, October 2009) and president of The 56 Group. He is also managing partner/CCO of BPT Partners, executive vice president of the National CRM Association and co-chair of the Rutgers CRM Research Center.