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New ChallengesJohn Tyrrell
17 September 2010
PresentationGo to
www.slideshare.com/HOTSOCKET
John TyrrellFrom Yorkshire, England
John Tyrrell10 years in London
John TyrrellClients
John Tyrrell
John Tyrrell, AmCAMProfessional Qualifications
Advanced Diploma in Marketing Communications
Awarded by
Chartered Institute of Marketing
John TyrrellAtari
Bruno BonnellInfogrames
John TyrrellAtari
European / worldwide PR directorProduct CommunicationsStrategyTacticsGlobal coordinationEvents
John TyrrellOver 200 Games
John TyrrellAmerican Imperialism
John Tyrrell
International Communications Consulting
www.hotsocket.net
Hot Socket
Hot Socket
John TyrrellClients
Your turn
Today’s Mission
Xbox 360September 2006Developed by Eden Games, Lyon
Test Drive UnlimitedMarketing Mix
Hard Mix ProductPricePlacePromotion
Soft Mix PeopleProcessPhysical Evidence
Test Drive UnlimitedMarketing Mix
Hard Mix ProductPricePlacePromotion
Soft Mix PeopleProcessPhysical Evidence
Test Drive UnlimitedMarketing Mix: Product
The Test Drive Brand 15 Games 1987 – 2010
Test Drive UnlimitedMarket Conditions
Xbox 360 recently launched (Dec 2005)
Only next-gen console on market (PS3 March 2007)
Limited installed base early in console lifecycle
Console sales and Xbox Live stronger in US than Europe
Limited competition, few games available
Test Drive UnlimitedMarketing Mix: Product Positioning
RACING REINVENTED
Live the jet set luxury lifestyle on the open roads of a vast tropical paradise, with the most exclusive car and
bike line-up, offline and online.
Test Drive UnlimitedDescription
“Test Drive® Unlimited is redefining the racing genre online with M.O.O.R.: Massively Open Online Racing.”
“The most comprehensive and accessible online racing experience”
“The only game that immerses you in the car and bike enthusiast lifestyle, with total freedom to race however and wherever you want within a huge, online-persistent environment.”
Test Drive UnlimitedMessages
“90 of the world’s most desirable super cars and bikes.”
“spectacular wide open tropical setting.”
“the ultimate online automotive gaming experience”
“the first truly next-generation racing game”
“the unrivalled size and freedom represents a landmark in video gaming”
“groundbreaking”
Test Drive UnlimitedBrand Essence
→ High quality (AAA) → Innovative→ Exciting→ Luxury→ Desirable
Test Drive UnlimitedMarketing Mix
Hard Mix ProductPricePlacePromotion
Soft Mix PeopleProcessPhysical Evidence
Test Drive UnlimitedMarketing Mix: PromotionTV commercial
Test Drive UnlimitedMarketing Mix: Promotion
→ TV commercial (US)→ Massive print and online media advertising→ Retail marketing→ 20+ press releases and other documents→ 20+ official videos released→ 530+ screenshots→ 280+ pieces of artwork→ 5 packs of post-launch downloadable content→ International press events inc. E3, X05, US & EU tour etc
Test Drive UnlimitedResults: Press Quotes
"Revolutionary online driver" Team Xbox, US
“Sets new standards of excellence. 9/10” X360 magazine, UK
“The future of racing games. 9/10” Official Xbox 360 Magazine, Australia
“Best racing game in many years. 9/10” Gamereactor magazine, Norway
“one of the most brilliant video games ever made.” 360 magazine, Germany
Test Drive UnlimitedResults
Top 10 Xbox 360 game at launch
16 gaming magazine front covers across Europe
Winner of more global industry awards than any other driving game in 2006
Test Drive UnlimitedAwards
RACING GAME OF THE YEAR
Game SharkBest Racing Title
GamePro2006 Editors Choice
Award: Racing
Best of E3 2006 AwardsBest Racing Title Controller Freaks
TeamXbox.com Editor's Choice
Game Critics AwardBest of E3 2006
Best Racing Game Nominee
GameSpot Best
Driving GameUse of Xbox 360
Achievement Points Most Improved Sequel
Best Racing Game Finalist
Best Online Experience2006 Award
Test Drive UnlimitedToday
23,700 + fan videos on Youtube
17.6M page hits on Google
6,000 people play online every day
Test Drive UnlimitedFan quotes
“One of the most coolest games I ever played”
“a fantastic game”
“this game is big. I love it. Best of 2008 and 2009”
“Best racing game ever”
“After all these years I still love this game just to drive around for hours”
“first driving game I have really liked...really good. The other players make the world come alive.”
Test Drive UnlimitedConclusion
Respectable sales
Great reputation
A success
Test Drive UnlimitedMarketing Mix
Hard Mix ProductPricePlacePromotion
Soft Mix PeopleProcessPhysical Evidence
Question
Quality Vs price.
How do you make choices?
Which is most important?
Consumer Behaviour, BDP, Cognitive Dissonance
Test Drive UnlimitedToday’s Mission: Price
AAA video game full price 59.99 € / $
Europe launched at 59.99 €
US launched at $39.99
What were the strategies, and what worked?
Test Drive UnlimitedPrice as a communication tool
Premium Price = Premium productQualityExclusivityUnobtainable, Desirable
Penetration Price = Low quality productMass market
Test Drive UnlimitedCar example
Test Drive UnlimitedUK Stella Artois TV ad
Test Drive UnlimitedPrice as a communication tool
UK Stella Artois campaign“Reassuringly Expensive”“Perfection has its price”“She is a thing of beauty”
Luxury positioning, but affordable to allPremium product, penetration pricing
Test Drive UnlimitedPricing strategies
Europe Premium product, premium pricing
USAPremium product, penetration pricing
Test Drive UnlimitedEuropean Pricing Strategy
Premium product at premium priceHigh qualityCharge market maximum59.99 €
Test Drive UnlimitedPrice Vs Quality
Consumers pay more in the belief they are getting better quality
Leclerc’s Eco+ VsNos Regions ont du Talent
Test Drive UnlimitedEuropean Pricing Strategy
Premium product at premium priceHigh qualityCharge market maximum59.99 €
Test Drive UnlimitedUS Pricing Strategy
Premium product at penetration priceHigh qualityMaximise salesDownloadable content sales potential$39.99
Test Drive UnlimitedUS Pricing Strategy
Penetration pricing in video gamesLower quality productsProducts with reduced contentBudget rangesGames released previously
So how did they justify this price?
Test Drive UnlimitedUS Press Release
Issued July 20th 2010, 6 weeks before launch.
Bruno Bonnell, Chairman, Atari CEO & CCO:“Innovation should be available to everyone, not a privilege for those can afford high price tags”
“We believe it is our mission to deliver triple-A games that are accessible to the masses.”
Test Drive UnlimitedAffordable Luxury
Premium Product at penetration price
The Budget Babe“Luxury brands create high-priced anchor items to fool consumers into purchasing their lower-end, and hence ‘affordable luxury’ items instead.”
Test Drive UnlimitedGucci Ad
Test Drive UnlimitedGucci
Test Drive UnlimitedGucci
Test Drive UnlimitedWall Street Journal
“Given that accessories like sunglasses, fragrances, and logoed belts drive the sales of companies like Gucci and Louis Vuitton, such consolation prizes account for a very sizable chunk of the luxury business these days.”
Test Drive UnlimitedAtari US Strategy
Penetration pricingWikipedia definition:
“the pricing technique of setting a relatively low initial entry price […] to attract new customers.”
Fits the objective, but did it work?
Test Drive UnlimitedPrice driven consumer
Which has more appeal?1. Full price premium product at launch2. Discounted premium product at launch
Atari US believed in 2.
Premium product + penetration price = higher sales
Test Drive UnlimitedCommunication problem
Effect of US price drop on EU consumersDemand price equalityQuestion qualityResist purchase on principle
US retail price $39.99 = 31.50 €EU retail price 59.99 €Game region-locked
Test Drive UnlimitedMillion dollar question
EU: AAA game sold at AAA price in line with market expectations
US: AAA game sold at budget price to generate higher sales
Which strategy worked and why?
Test Drive UnlimitedConclusion
What happened?
