KGC 2005: “Blue Ocean Strategy in Games,” Kim Hak Gyu

 Posted by (Visited 16055 times)  Game talk
Nov 092005
 

Kim Hak Gyu did Ragnarok, and now Granado Espada. Here’s my very rough notes on his talk:

Blue Ocean Strategy is about new markets… why talk management at a game conference? There is an overflow of games in the market. Some of the games I make are not always welcomed, and this is worrying. Too many games out there competing. This is a red ocean where the sharks are eating each other. You work and make your baby and then it’s not welcomed by the market.

Blue Ocean is the opposite, it’s a market with no competition. Korean authors have not been doing well in writing business books like this. But this book was instantly popular.

How do we relate this to the game industry? At a company workshop we discussed these ideas with the employees. It was welcomed, so now I want to share it with you.

[[Slide: a quote from Joel on Software! (In Korean)]]

We’ve increased the amount of pixels in digital camera shots, but then we usually reduce the resolution of the pictures afterwards–so why chase the megapixels? Same happened with cars–we chase horsepower, but who gets to actually use this horsepower?

How do you differentiate? People are choosing to increase numbers. If they don’t they lag behind the market.

In the game industry costs will rise, you’ll have to hire more employees, in order to win in the market. At this point, I look back at the past… it used to be pay-as-you-go, small audience. It was a blue ocean back then. Now it’s a red ocean.

If you do not create a blue ocean for yourself, you will not succeed. Consumer innovations and tech innovations are not always the same thing. The megapixel increase is a tech innovation but not a consumer innovation. Why should the consumer care even though you have spent all this tech R&D money?

You need concepts that the user will care about. Last year I talked about this difference as the essence of marketing. If you just go for the safer route, then you will actualy take on higher risk. Differentiated market AND differentiated product is what you need. How do you do this? Many books talk about differentiation.

ERRC — E- eradicate, which is removing. R is reduce. R is ?, c is creating. [[this is in the book]] You don’t have to be good in everything, or the best in everything.

What is strategy? Extended Starcraft metaphor [[how very Korean]] Concentrate, fire on one point. Otherwise you’ll be roadkill. You will have a limited budget, and if you spread it too thin… that won’t work. If instanced dungeons is the trend, or whatever is the trend, if you include everything that is a trend, you think it will be successful. But you’re wrong.

In Grenado Espada I was pressured a lot, just like being a good student. “Last time you came in second place, this time you should be 1st”. So I thought I’ll have the best graphics, 3 times more stuff to see, more dungeons, more quests. I wanted to do that, but I started to go crazy trying, because I couldn’t do it all. So I had to give up on things — the graphics. Instead, we do 2 or 3 villages that look really good. Instead, the players have to go into the same dungeons over and over because they are deep.

This is value innovation. People are not paying attention to how it looks and how big it is, but instead to their experience. But you’ll need to get creative. If you try to do everything nicely, you can’t actually do everything nicely.

How do you match all the years of investment into Lineage? If you just try to copy the best, you are trying to achieve failure from the get-go. You need to concentrate your resources in open areas. You may end up with a lesser user value otherwise.

You may have noticed that the website for GE looks strange — we applied ERRC to it too — the typical website has a ton of buttons and small fonts. we developed it internally in a few days. No Flash, though we’ll add it. Instead of having to take pains to hit tiny buttons, we have big letters on the screen. We wanted a spacious website. We introduced a real name system on the forums so that users got really polite. Sometimes the competitors come to the website to start flame wars. But on the GE website, they have real names and pictures, and the users are polite.

This website was cheap to make. We spent the money on areas that we wanted to focus on instead. We have community members who have been waiting for 2 years. I feel grateful to them and hope they spread the word about the website…

There’s an old saying that something is perfect when there’s nothing left to take out. You see that students who focus on specialties have higher performance in their work. Frost — the road less traveled made all the difference. This is the challenge even though people may call you crazy. I want to emphasize that you have to push risky choices.

Now, to speak on market differentiation. We have to segment the market and focus on non-consumers. The current market distribution is divided into teens, 20s, 30s, 40s, women… but we should not segment by demographics, it’s not helpful. Regardless of age, the main purpose of the game may be the same. A 50 year old might be a hardcore gamer. Why do we segment the market? To provide a product that consumers really need. It’s about targeting product. Look at how books are segmented on Amazon–by topic, genre… customers like customized service–we need to segment the market to do that, but not by age since that makes no sense. We need to get out of this box and overthrow this stereotype. We need to understand the behaviors of the consumers, so that we can make non-consumers into consumers.

We know many office workers do MMORPG. But office workers don’t have much time, and the games demand it. So we see bots and macros… we have to focus on the consumer’s needs. Now there are services to level up characters. We need to understand that this is a different consumer. We need to provide easier experiences, we need to appeal to women. [[this talk could have been at GDC in the US!]]

Look at recent fighting games–they’ve gotten too hard for non-gamers to get into.

[[Tom Peters and Re-Imagine! cited.]]

There is a large potential market for women. They should be our next target audience. What is blocking them?

We see many foreigners coming to Korea to marry Korean men. Korea is no longer a homogeneous society. They will be naturalized. Korea is becoming internationalized. Think 20 years forward. Chinese kids can’t register on my website because they don’t have a Korean ID number right now! We have to think about foreigners, and fix the ID number barriers. There’s a real blue ocean there.

Another important point: companies and consumers and direct contact–most of the time the channels in between are a stumbling block–game rooms, etc.

I am running out of time… my presentation will be on the website, and I do recommend these books.

[email protected]

KGC 2005 Opening Reception

 Posted by (Visited 5485 times)  Game talk
Nov 092005
 

Today Erik Bethke toured me around some of Seoul and his GoPets offices. And afterwards, we went to the opening reception for KGC 2005. There were a lot of government folks there, and I spent the evening sitting in between the guy who made Ragnarok and the General Director of the Minstry of Culture and Tourism. I signed a lot of books, because every person who came to the reception got a copy of the Korean edition of Theory of Fun in their welcoming packet. I spent much of the time discussing how games fit into human culture with the General Director, who is worried that the games programs in Korea are turning out lots of good programmers, but no designer/developers who treat games as a medium of art and expression.

I, along with a bunch of other folks, was asked to give some opening remarks. Here’s my rough approximation of what I said as I winged it:

First of all, let me say what an honor it is to be here. I’m just a game designer, so getting to have dinner with high level government officials is a real treat.

The question posed was, what is the future of games? Predicting the future is hard, though. If it were easy, history would be very different, I suspect. Sure, I can point to things that are on the wall, or point to trends that we see today, and maybe extrapolate out, but that would mostly be telling you about how things already are.

Really, when we look to the future, we have to think about what our beliefs and hopes and dreams are, and go from there. So this is what I believe:

I believe that games are important.

I believe that there are only a few ways that children learn: from stories, from parents, and from play.

I believe that games teach us in ways that other things cannot. We learn of teamwork, of coordination.

I believe that games, especially online games, bring us together. There is no better evidence of that than the people in this room.

It’s such an honor to be here because the people in this room are people who take games seriously. You are all people who believe in games, and in communication, because we are all here to exchange ideas. Games give us models of the world, something we can test assumptions with, try new ways of doing things, and create communities that cross boundaries, cultures, and even national borders. As we learn from games and from each other, maybe we’ll be able to better predict the future, just a little bit.

So those are the things that I believe. Again, it’s an honor to be here among all these people — all of you — who also believe in the importance of games. I might not be sure of what the future will be, but this gathering, and these beliefs, give me confidence and hope in it. Thank you very much for having me here.

Nobody seemed to notice that I was wearing sneakers with my suit. After all, I had changed into the blazer and button-down shirt in the basement parking lot of the hotel. I wasn’t gonna lug shoes with me as we walked Seoul!

I’m in Seoul…

 Posted by (Visited 5694 times)  Misc, Reading
Nov 082005
 

Or actually, I’m out of it, wherever this hotel is. Tomorrow I’ll see the city proper.

I suspect the city will be branded Samsung. Everything else here seems to be. 🙂 In the immigration line at the airport, the screens telling you the rules were not only flat-screen Samsung TVs, they also were interrupted by ads for Samsung phones.

Had dinner with Jason Della Rocca. I surely didn’t need to travel quite so far to do that…!

Finished off that Warshawski novel (it was Hard Time, if you’re curious, but I don’t have much to say about it). But I also finished off Fifty Degrees Below, which is Kim Stanley Robinson’s sequel to his earlier book Forty Signs of Rain. I enjoyed it, but as usual with his stuff, it can feel kind of slow in places. You could call it the brainy version of The Day After Tomorrow — it also deals with a thermohaline shift, as well as with other dramatic forms of climate change, but it’s DC-insider setting (the halls of the NSF) gives a very differentperspective on events. Most of the book is told from the point of view of a scientist who has some problems interacting with the rest of humanity — someone who spends a lot of time thinking about evolutionary biology. The real story, however, is happening slightly offstage — the battle for the hearts and minds of the public as regards climate change.

It’s full of sharply observed details about how life would adapt if there were things going on like cold snaps to 50 below in DC. I was particularly amused when the reinsurance companies showed up willing to pay billions of dollars to dump thousands of tons of salt in the North Atlantic; it was the cheapest way out for them. If anything, the weakness of the book is that it demonstrates all too clearly just how adaptable humans are — by never crossing over into the sensationalism of Day After Tomorrow, it also makes the catastrophes cozier. A whole bunch of DC homeless manage to survive that cold snap, for example.

This is a spiritual take on the issue as well, what with the presence of Tibetan monks and a possible reincarnated lama, the protagonists’ delving into Ralph Waldo Emerson, and so on.

OK, I’m drifting off (my biological clock still thinks it’s 5am) and I can’t seem to wrap up my thoughts on the book into something coherent. So I’ll stop there. 🙂

From Taipei to Seoul

 Posted by (Visited 4711 times)  Misc
Nov 072005
 

I’m in the lounge at the Chiang Kai Shek airport in Taiwan, boarding a plane to Incheon Airport in about an hour. My bags are way heavy — probably heavier than they allow — because Taiwan is comparable to a sauna, whereas Korea is apparently near freezing at night. I’m struggling with this keyboard, which appears to handle every language known to man, but cannot supply a backspace key of a reasonable size, so I keep typing backslashes.

I am looking forward to exploring a little bit of Seoul, since I have never been. It will be interesting to contrast it to Taipei. The first time I was in Taiwan was in 1999, and I visited the capital, and the cities of Tainan and Kaohsiung. The country has changed tremendously already. Back then, as I noted in the poem “Driving to Tainan”, it reminded me of New Jersey. Today, it reminds me more of the other side of the river. A district that was mostly rice paddies now holds a six story mall. Wide boulevards and gardens, more cars and fewer motorcycles (though they still exist in profusion), and PC games for sale in the 7/11 stores. At Chili’s you can get the chicken crispers and they taste pretty much just like back home, and the menu is all in English.

There’s something of the vibe of say, Shanghai, where you still have that “expat” feeling. The Westerners cluster in certain bars and restaurants, and if you wander in the right direction, you’ll come across the parts of town that still exhibit life as it was. In Taipei, it feels a little bit harder to find that. Everyone speaks English — passably to excellently — and even the Snake Alleys are marked with posters in English saying “Please no photos of the snakes.”

In the toy stores, you find Japanese comics and Finnish Moomintrolls. On the radio, it’s an American interviewer joshing with a British comic about his character with an Australian accent. Last time I was here, I was taken to an expat bar. There was a jazz band from San Francisco fronted by an R&B singer who couldn’t make it in LA. The room was half local, I would guess, but the mixed drinks were mostly Western.

It isn’t that this bothers me; if anything, the Taiwanese have a remarkable accomodation with their tangled cultural heritage. Rather, the thing that strikes me, as I move from black Lincoln Town Car to Grand Hyatt to Chili’s to mall to shopping district with giant signs (Sony, Panasonic, an extra virgin olive oil ad depicting a naked woman swimming in olives) to luxe airport lounge with Internet terminals that support eight languages — the thing that strikes me is how there’s a whole world that exists that many never get to see: the world of the jetsetter, which is really a bubble-world. A world where the closest you come to beef noodle soup served by the side of the road is when you get taken out for lunch to sample the local cuisine, and get lucky enough to have a guide who prefers the real stuff. A world where you go out shopping for local souvenirs and end up in a mall that carries mostly foreign goods.

There’s a comfort in getting the International Herald Tribune delivered in English at your door each night, but I also miss that rare thrill, the moment back in 1999 when I was led between a gaggle of motorcyles, down a wet alley where laundry hung from windows, my host telling me that he was sure there was a good place to eat around there…

Down an alley we find a square,
An empty lot loomed by cosmetics ads.
Plastic sheeting circles plastic tables,
A sizzle of shells, sashimi and squid.
The fish eyes are everywhere, and
Taiwan beer tastes very familiar:
Perhaps there is only one beer, and many bottles.

In bubble-world, there is only one core experience, like the beer in those bottles; it’s like there is only one black and white coloring book, and we fill it all in with “local color.” It’s sitting down at a computer in an airport lounge to find it pre-equipped with Skype, since you just finished reading your V. I. Warshawski mystery.

And yet–I think this is the future. From it, Cleveland or Jacksonville look as provincial as Tainan, and like the classic New Yorker cartoon, your perspective inverts until you see the whole world as nothing more than the spaces around airports.

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