Some time ago, the esteemed editor of this
publication and I briefly considered looking for a
sponsor for my column. Back then I quickly dismissed the
idea, convinced that no sponsor worth his salt would
give a second look to my left-leaning nonsense when
there were so many worthier targets for their
not-entirely-disinterested generosity. But now might be
a good time to revisit the concept, because the more I
think about it, the more I believe that I just might be
the last sponsor-free entity left on Earth.
Indeed, corporations (and, in some peculiar corners
of the world like mine, governments) are so desperate
for brand visibility that everything from high school
proms to regional curling championships to supermarket
egg shells has been covered with ads and logos. One
family even appeared on NBC's Today Show last
year to offer to sell the naming rights to their child
to the highest bidder. There seems to be, in the minds
of today's image-makers, no such thing as too much
marketing; in fact, an ever-increasing branding effort
is perceived as the only way to survive in the corporate
jungle. A particularly crude case in point: in No
Logo author Naomi Klein
quotes David Lubars, a senior advertising executive, as
saying that consumers "are like roaches – you spray them
and spray them and they get immune after a while."
On behalf of the roaches, let me express a suitable
level of gratefulness.
OK, I'm done.
Brands, Not Products
No Logo describes how multinationals have moved from
a product-based economy to a brand-based one over the
past twenty years, thus transforming themselves from
purveyors of goods to providers of prestige, good
feelings and self-worth. We are no longer buying shoes
and clothes; we are buying hope and social standing.
Which, judging from the price of the pair of tennis
shoes I have used to inflict the latest round of sports
injuries upon myself, is very expensive indeed.
The method is frighteningly simple:
[] Jack up your marketing budget to 5 or 10 times
what it used to be, focusing on the brand instead of the
product.
[] Pay for it through a reduction in unit costs – by
slashing jobs and moving production to unregulated,
union-busting offshore sweatshops.
[] Since you are selling prestige, sell it at an
incredibly high markup.
[] Count your money.
What does this have to do with us? Plenty. Sure,
there aren't many game development studios that pay
their workers 80 cents a day like some Chinese garment
factories. However, the same forces are at work in our
neck of the woods, albeit at a much more modest scale.
And their impact isn't hard to feel.
Selling Ain't Cheap…
… And it ain't easy either. With so many games
competing for so little retail shelf space, ad budgets
grow by leaps and bounds; the big brands that advertise
on TV, like EA Sports and the console manufacturers, do
so at a cost that easily reaches the tens of millions of
dollars. And in addition to the traditional ad and
promotion channels, which cost more every year, today's
marketers are forced to use strange ways to reach their
consumers. For example, when I interviewed Chuck Kroegel
of game publisher Strategy First for Secrets of the
Game Business, he told me that a majority of his
company's marketing effort and much of its budget went
to online agents, who visit chat rooms and handle public
forums to promote the games to consumers one on one.
Bottom line: selling games and consoles takes a lot
of effort and money. All that marketing and promotion
money has to come from somewhere. More often than not,
that somewhere ends up being the pockets of consumers –
and especially those of developers, who must produce
bigger and bigger games on tighter and tighter budgets,
with all of the unpaid overtime and
minute-after-gold-master layoffs that this vicious cycle
entails.
And even that much effort doesn't always work. How
many high-profile games with sky-high marketing budgets
still tank in the marketplace? And in the rest of the
world, for every Nike that successfully hires thousands
of direct marketers to hawk their wares on campuses and
playgrounds, there is a Daewoo that thinks it's going to
do them a big fat lot of good to try the exact same
thing – and that promptly goes bankrupt anyway.
Cannibalization
Around 1913, says Klein, A&P quickly opened 7,500
supermarkets, killed off many of its competitors, then
closed half of its outlets because the market was
grossly oversaturated. Today, companies like Starbucks
invade a market by blanketing it with stores until they
end up competing with each other more than with rival
chains. Game publishers are forced to do pretty much the
same thing: publish many, many games, shoving the
competition off the shelves and hoping that the overall
revenue generated by the lot will be enough to
compensate for the losses on any single one.
An effective strategy for the big guys who can afford
to launch 50 titles or more a year, but one that has
driven the mid-list publisher to the brink of
extinction, not to mention the developers who can't tap
that big consolidated revenue stream.
Big Bullies
That being said, we can count our lucky stars that
we don't have to deal with the truly horrifying
conditions that globalization has brought to other
industries. One chilling example from Klein's book: in
the Cavite Export Processing Zone in the Philippines,
minimum wage is an appalling $6 a day – and if companies
feel that is too expensive, they can (and, sadly, most
of them do) file for a waiver and pay even less. As a
result, such zones, now present in dozens of countries
and originally intended to bring investment and better
living conditions to their populations, have become
havens for 19th-century capitalists, where
they can impose martial law on workers, unhindered (and
often actively supported) by the local authorities.
Another sad side effect of the EPZ phenomenon:
companies setting up shop there receive tax breaks,
sometimes for many years, as an enticement to create new
investments, but in many cases, corporations simply shut
down operations outside of the zone, create new shell
companies with different names, and resume business in
the zone, thus getting the tax break in exchange for
nothing whatsoever. Closer to home, much criticism was
levied at Montreal's Cité du Multimédia, where
information technology companies (including a handful of
game shops) could get similar tax breaks on salaries,
because instead of stimulating new jobs as promised, it
simply ended up relocating existing companies from
elsewhere in the city.
And Now, A Word About Ratings
When confronted by activists who had documented
human rights violations in their offshore operations,
Klein says, several multinationals began by denying
everything, then blamed their local contractors (since
they technically didn't own the factories), then
elaborated voluntary codes of conduct in the hope of
foiling attempts at regulation. Does that last tactic
sound familiar? It should, because that is what the game
industry has done with ESRB ratings.
Now, the problem with voluntary codes of conduct, as
opposed to legislation, is that they are unenforceable,
because they are rarely (if ever) subject to independent
inquiries and carry no significant penalties for failure
to comply. A game may be rated M, but if a retailer
wants to sell it to a five-year old, there is nothing to
prevent him from doing so.
Very recently, our old friend Senator Liebermann has
proposed legislation to change all of that. But as
usual, he goes too far, and his motives are suspect at
best. Controlling sales of egregiously violent games to
minors would be a good thing; as an industry, all of us
who support the concept of the ESRB ratings and what
they stand for should support any initiative that seeks
to inflict penalties against those who disregard them
and make us look like a bunch of sleazes in the process.
And if a parent wants to let their kid play Grand
Theft Auto: Vice City, they'll just have to buy it
for them, like most of them already do anyway. But
letting a government agency create a new ratings system
and decide who gets what, according to criteria no one
has ever seen? That reeks of censorship. And we get
enough of that from Wal-Mart, don't we?
