Cascades, Networks and Video Game Marketing
Information Cascades and Networks are one of the most influential factors in the selling of video games. According to a study done by Waggener Edstrom Worldwide, “friends are three times as likely to influence a game purchase than traditional advertising” (Kotaku). Through this, a few friends can get crowds of people to buy a game, by just telling their ow friends that it is worth the purchase. Through this information cascade, many start believing that a game is good just because many people told them it was and advertise it to others. In addition, Kotaku mentions that there are certain gamers within networks of gamers that are especially influential calling them “Influence Multipliers” (Kotaku). These gamers are described as being connected to many other gamers. They act as bridges within the network connecting multiple groups allowing the information cascade to spread even further. Of course, the opposite is also true. If a few friends tell you that a game is unplayable, you probably would no buy it, even if you thought the game was interesting. Dan Gallagher, senior vice president of Waggener Edstrom Worldwide states,”You don’t have to influence everyone – just the ones who influence everyone else” (Kotaku). Direct-Benefit Cascades, where the game is directly benefited by having number of people play it, are also important in the marketing of video games. This is especially true for video games, where multiplayer is a is an important part of the game. These kinds of games require a large crowd so that people have others to play with. Games, such the Call of Duty or Halo Series, needs a large enough following so that online multiplayer is a fun experience. If no one else played the game, it would lose a large fraction of its appeal.
One example of how important these factors are is in the growing popularity of Minecraft. This sandbox survival game by Notch started as an unknown project made by one person with little to no funding. There were no large ad campaigns. The only advertising was word of mouth. During the first week, 40 copies were sold (Wired). Afterward, people started talking about it and more people started to playing. They started to talk about it on Reddit and 4chan, which acted as “Influence Multipliers” and even more people started playing. As updates were made, more people started learning about the game. Direct- Benefit Cascades was also essential, since as more people played it, more creations were produced and the Minecraft Communities expanded. Due to all these factor, Minecraft has become one of highest selling games, having sold millions of copies. Because of this word of mouth advertisement, what started out as a one-man project, Notch was able to sell his company, Mojang, to Microsoft for 2.5 billion dollars.
http://kotaku.com/5428141/word-of-mouth-sells-the-most-video-games
http://www.wired.co.uk/magazine/archive/2012/07/features/changing-the-game