Jul 13, 2011

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EEDAR: Sony’s Welcome Back Program Was Successful

EEDAR: Sony’s Welcome Back Program Was Successful

EEDAR, a research firm founded by interactive entertainment veterans, released a report which sampled IGN users and found Sony’s Welcome Pack Package was a success. PSN users purchased more games from the PSN and by offering titles like LittleBigPlanet and inFAMOUS they increased the awareness of the sequels that were recently released. More interesting is a suggestion that offering the first title for free could be a new strategy for publishers to increase sales of sequels.

  • All four Welcome Back titles, Infamous, LittleBigPlanet, Dead Nation and WipEout were in the top 25 of consumer reported title acquisitions in June 2011, according to IGN GamerMetrics.
  • 17% of IGN users indicated they acquired a PlayStation Network digital title in June 2011, up from 13% in March 2011 before the PlayStation Network service was interrupted.
  • Even when factoring out the four Welcome Back titles, 15% of IGN users indicated they acquired a PlayStation Network digital title (an increase from 13% in March 2011), indicating that the Welcome Back program likely increased sales of other digital products.

The PlayStation 3 also saw an increase of home console share from 40% in March to 44% in June. The study also noted that by having LittleBigPlanet and inFAMOUS available for free, user awareness of their sequels LittleBigPlanet 2 and inFAMOUS 2 increased.

According to IGN and Gametrailer.com stats:

  • LittleBigPlanet 2 experienced a 66% gain in IGN Page views and a 23% increase in Unique Interest.
  • GameTrailers.com saw a 69% increase in LittleBigPlanet 2 trailer views.

It’s also interesting to note that Google reported a huge increase in searches for “Dead Nation 2” which means by having the first title for free on the Welcome Back Package, a possible sequel will do quite well and if there were a sequel available users might have purchased the second iteration having played the original.

They also noted that the Welcome Back Package could have led to lower retail sales in June due to the increase of digital sales during that month.

New Market Strategy

Later in the report EEDAR suggests that due to these findings a new marketing strategy can come from this, two options were given.

Free Prior: This option would be to release the first iteration of the game for free prior to the launch of the next title. They think that by offering the game for free, for a limited time, it would increase awareness of the franchise to those who might not have known about it and create new customers for the second title. They give this example that explains the new market strategy.

  • When broken down mathematically, the results make a sound financial argument. If a game that once sold 2 million units in the market is currently available digitally and physically, it is likely producing gross receipts of about $500,000 a month. Assuming that gross receipts reduce to $0 during a 30 day period where a title is free (-$500,000), as long as the free offering boost sales of the next iteration by 8,500 units (at $59 ASP), then it would produce a net/net benefit to the publisher. EEDAR believes that the publicity generated from the free offering, in addition to new consumers being introduced to the series, would make the 8,500 unit mark easily achievable.

The downside would be for titles with excellent stories like Mass Effect or L.A. Noire where months before the sequels release they see a huge increase in the previous title. Which means the risk of the loss of sales to gain an increase of users for the next title might be high.

Free After: this option would be to release an older iteration for free, also for a limited time, a few months after the release of the sequel. This is lowers the risk for publishers, while at the same time enticing new users to experience the first title and hope they go out and buy the sequel while it is still at it’s regular price.

I have to tell you, looking at this I’m not sure if companies will be willing to take the risk of either of the two options but I am sure us gamers would love to see this happen. And I do think it works quite well, I’ve seen it myself where a gamer has never played inFAMOUS but played it because it was free and then went to purchase the sequel almost immediately after completing the first game. So there is definitely something to EEDAR’s argument.

What do you guys think about the Welcome Back Package? Do you think those who bought PSN titles only did so because they had a free month of PlayStation Plus or did they become more aware of what was on the PSN because of the Welcome Back Page?

If you want to read the entire report you can find it here via a PDF file.

Please note that this issue of EEDAR’s Retail Buyer Report, makes several references to title ownership/acquisition according to the actions of IGN users. Acquisition can occur through several forms including new purchases at physical retail, used purchases, online purchases, digital download or person-to-person trade.

EEDAR is a research firm founded by a team of interactive entertainment veterans in 2006. The company’s mission is to increase the profitability and creativity of the video game industry by allowing publishers, developers and investors to make more strategic decisions based on objective, accessible and meaningful data.