In advance of his presentation at Digital Interactive Gaming 2010 in London, Ontario, EEDAR analyst Jesse Divnich shared some highlights of his talk, and in particular he noted how important it is to have a strong brand. If your brand is strong enough, fans will jump on the next title in the franchise, even if there's a slight dip in quality.
"Even though Fallout: New Vegas, Fable III, Medal of Honor, and Star Wars: Forced Unleashed 2 (top October 2010 releases) produced quality scores below their predecessors, the strength of their brand equity was enough to overcome any shortfall in quality," noted Divnich. "The truth is, once a high consumer promise is established for a brand, the equity built plays a persuasive role with consumers. As long as the slip on quality is not significant, sales are unlikely to be impacted as consumers are more forgiving."
Publishers, of course, still need to be careful, especially if they aim to further their sales with the next iteration in a franchise. "It should be noted, however, that a decrease in quality for a brand rarely results in significant series growth, but rather producing sales in-line with its predecessor. For some publishers, this is perfectly acceptable," Divnich continued.
"After a high consumer promise and strong brand equity is established, publishers often use secondary developers for the next iteration. With the reuse of assets and lower development costs, publishers are able to generate greater profitability off the next iteration. The increase in profitability can then be used to fund the next-iteration that will again re-establish that original high consumer promise, and grow the series."
Building up a strong video game brand is a massive investment for most publishers, but as we've seen with Halo, Call of Duty and others, the pay off can be tremendous. "Consumers tend to forget the enormous amount of resources, risk, and difficulty of achieving a 90+ rated title (less than 1% of titles achieve this). Often, publishers are willing to sacrifice significant profits in order to establish a high consumer promise and strong brand equity, so that future titles may focus on recovering those costs in order to continue to maintain a brand’s strong equity," Divnich concluded.
