Opinion

Candy Crush Nintendo: The changing world of video gaming

While gaming is touted as one of the next big things for advertisers Scott Heron looks at what this week’s events with Candy Crush and Nintendo tell us about the state of the industry

It was an interesting week in video gaming as Nintendo’s stock slid 20 per cent on poor earnings , while a social media gaming company called King.com successfully trademarked the word ‘candy’ in the US. 

Heron

Heron

Video game marketing has been an interesting area for a long time. If digital marketing is a ‘lean forward’ medium, than video gaming could be described as ‘lean way-forward’. Users are extremely engaged, playing games for hours a day, and there are loads of in-game branding opportunities.

So if it is so engaging, what is happening with Nintendo? Nintendo’s stock slide is largely due to poor sales of its Wii U next to newer consoles by Sony and Microsoft. But this is only part of the story. The gaming console is under intense competition from other devices like mobile and tablet. In fact, the console business model itself is under fire as it relies on buying hardware ($400) and then packaged games ($50). These days, a huge amount of gaming is done on your mobile device, and often these games are practically free.

So, it is not a surprise, that in Australia, consumer spending on consoles has been falling steadily since 2008.

At the same time that consoles are struggling, online gaming, especially social media ‘freemium’ gaming, is on the rise. ‘Freemium’ games are free to play, but offer in-game opportunities to purchase products that will help them advance. Farmville, one of the more famous freemium games, had 260 million active users at its height. Advertisers like Coca-Cola, American Express and McDonald’s saw an opportunity for virtual branding and offered product through the game.

But games quickly come and go. Zynga, the company that created Farmville, issued profit warnings this year citing additional competition.

This brings me to King.com and the trademarking of ‘candy’. King.com is the latest darling social media gaming company, and is responsible for creating ‘Candy Crush Saga’ – the most downloaded free game last year for iPhones and iPads with half a billion installs and over 150 billion plays to date.

The trademarking of ‘candy’ represents their attempt to ward off competition and imitators. As a result of the trademark ruling, Apple has asked other apps on the iTunes platform with candy in their names to either change their name or be removed from the platform.

It remains to be seen whether King.com and Candy Crush Saga will have an enduring place in the social media scene. But, it is clear that social media gaming represents an opportunity for marketers as it appeals to a wide audiences and can attract people who would not otherwise play games.

With mobile penetration in Australia at over 100%, and smartphone penetration at 72%, it is safe to say that ‘freemium’ gaming is at the fingertips of many Australians. These games offer an opportunity for brands to reach their users and play an active role in a ‘lean way-forward’ experience.

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