October 23, 2013

Video Games - Blockbusters

Did you read this article when it came out last month (click here)?

2002: The top 20 video games accounted for 22% of sales.

2012: The top 20 video games account for 41% of sales.

2008: Electronic Arts sold 67 video game titles.

2012: Electronic Arts sells 13 video game titles.

Since 2008, video game sales are down 39%.

We're killing ourselves, slowly, but surely. In 18 of the 22 Merchandise Forensics projects conducted in the past eighteen months, there was a new merchandise issue that was driving down future customer productivity.

I'm almost to a point where I think it is a sub-conscious thing. Since the dot.com era, we've been taught that things have to "scale". In other words, there's no room for good - go big, or go home. And we were taught "the long tail", riches to be had outside of best sellers.

And we were taught "optimization". When we optimize performance, we, by default, give too much attention to winners. We ignore everything else. And in the short-term, we're making the right choices.

With merchandise, everything is measured in the short-term. As a consequence, the long-term is sub-optimized.

For goodness sake - please analyze new merchandise introductions over the course of the past 3-5 years. All of your marketing programs are dependent upon having a steady diet of new items that perform well (not great, but well), to replace all of the items that are dying.