California Region Child Analogy

After traveling a large part of this state, I can't help but think that the north, central, and southern regions of California can identify with the characteristics of the first born, middle, and youngest child. Northern California has a more mature, overachieving character of a first born, while Southern California is like the youngest child - spoiled, always trying to get peoples attention, not necessarily for the right reasons. In the middle, we have the Central part of California that is simply solid - nothing flashy, almost ordinary - it simply does its job. It is funny how each area is so distinct from the others. I think of traveling from Ottawa, through Toronto, down to Windsor and not being able to see such distinct differences in personalities.

UPDATE: Ok, my little sister doesn't like the youngest analogy. I would like to clarify, that today she is a mature, wonderful person. The analogy would only apply to her pre-university years :)

San Francisco Visit

Saturday morning we drove up the scenic Hwy 1, along the Pacific coast, on the way up to San Francisco. While it is a nice drive, it is rather long and, once you are on it, there aren't many reasonable ways off it. There were a couple of interesting sites including Hearst's Castle and a farm house on a tiny rock jutting into the ocean. The huge pine trees at Big Sur are amazing, but try not to follow our mistake and gas up your car there. I had to do a double take as I discovered that the gas being pumped in my car was costing us $4.75/gallon (current prices anywhere else was $3.10/Gallon).
After the 1, we darted into San Francisco, arriving by 5pm. We quickly got acquainted to the huge SF hills as we dragged our luggage up two blocks from our parking garage to our hotel, the Mark Hopkins Intercontinental. We were feeling a bit drained from our trip, so we decided to remain close to the hotel for our first night.
The Mark Hopkins is located at the top of Nob Hill and has a restaurant/nite club on its top floor called Top of the Mark. As guests at the hotel, we were quickly seated at a very scenic table overlooking the northeast part of the city. We enjoyed martinis and a nice bottle of wine while listening to some lite jazz and gazing out at the city. If you go, I recommend sticking with drinks as the appetizers are very ordinary and overpriced. But a decent bottle of wine is fairly priced and a great way to introduce yourself to the city.
Sunday was the "tour" day. I set up two tours for our enjoyment. The first was a Segway tour of the area around Fisherman's Wharf. A segway is a two wheel motorized vehicle that responds to how you shift you weight on the vehicle. It is very easy to get the hang of how to ride it and quickly we were driving up Beach St. heading towards the municipal pier. The tour took 2 1/2 hours and was a lot of fun. You only have time to see a few interesting sites, but the chance to drive Segway makes it a memorable tour.
After the segway tour, we hopped onto the F trolley and drove down the Embarcadero into the Financial district. We stopped for food, then headed to the next tour: a night tour of Alcatraz. Alcatraz, one of the most infamous prisons in the world, is creepy during the day let alone during the night. The prison has a great audio tour that lets you discover the history of the cell block at your own pace. I was able to go into the hole (the dark cell where they sent the misbehaving prisoners). After the audio tour there were a number of live presentations on special topics relating to the prison and its population. We heard a very interesting talk about the Birdman of Alcatraz.
Monday morning, we walked up Grant Ave. into Chinatown and then into Little Italy. We walked by Washington Square and hopped on a bus that took us up to the top of Pioneer Park where the Coit Tower is located. The area gives an amazing 360 degree view of San Francisco including great shots of the Golden Gate Bridge, the Bay Bridge, and Alcatraz Island. In the afternoon, we changed into our nice clothes and visited the SF Museum of Modern Art. The museum features a nice collections of paintings and "living art" exhibits. I am not a big fan of the "living art" exhibits, but the paintings were remarkable. After the museum, we headed for our culinary experience of SF at the Slanted Door restaurant in the Ferry Building. While planning the trip, I heard from three different people that the Slanted Door is a must place to eat in SF. They were right. The food was incredible and reasonably priced (not an easy feat in SF). We definitely took our time and enjoyed a memorable meal that included a little desert. If you want to eat there during your visit, I highly recommend that you book a reservation at least a week in advance as they book up quick.
Tuesday, we packed up and headed for home, but I had one last surprise up my sleeve (although mostly for my benefit). We stopped in at the Google campus to meet up with a Merage alum and get a quick tour of the campus and eat at one of the magnificent cafeterias. The campus is a surreal experience of loaner bicycles, food from distant lands, and wireless internet access. The food was great. It was great to see such an emphasis placed on healthy foods for its employees. Anyways, I learned a bit more about Google and got some ideas about how to tweak the resume to get their attention. After Google, it was straight home - arriving around 8pm - fully exhausted.
You can see a slide show of some of our moments below.

Friday - Up The Central Californian Coast

The surprise is out. I'm taking Lindz up to San Francisco. I had a wonderful last day at THQ, but I wanted to get on the road early so we headed out at 4:30 into rain (yes, rain?) and heavy traffic going north on the 101. I planned to find a romantic spot to stop a few hours into the journey up the coast. I was very lucky to find the secluded ocean town of Avila Beach (just north of Pismo Beach) and the amazing Avila La Fonda hotel (By found them, I mean in advance using Obitz).

Avila La Fonda appears to a decent-sized hotel run by a kind family. The hotel is a block from the beach and immaculately decorated. They provide a great value for your vacation dollar here. It is so comfortable, I almost don't want to leave. I will be marking this down as a great weekend getaway. And PS: they have a good Costco discount.

Today we work our way up the coast with a goal of reaching San Francisco in the late afternoon. I think our hotel in SF charges $15/night for internet, so I may not be a frequent poster over the rest of the trip unless we find a wireless internet cafe.

The Drive Up the Coast

Avila La Fonda Hotel Room

The View From Our Balcony (ask for Room 210)

Weekend Plans

With the internship and summer break finishing up, I thought it would be nice to have a small vacation. So, Lindz is coming down to Agoura Hills tomorrow and we will be going to the Hollywood Bowl to see the Arcade Fire (yes, again)! They are calling for rain?? What are the odds. I hope the sunshine stays with us. We'll spend the night on the romantic air matress in my bachelor pad in Agoura. I will finish up work early on Friday and set out on our vacation.
I haven't told Lindsey where we are going, so it will be all a surprise to her. I have tried to plan some fun stuff to see and do. I will try to post blog updates over the weekend, but I am not sure where I will get internet access.

End of the Internship

Things are winding down in my internship at THQ. The Kids group brought in a recent MBA graduate to take over the Ratatouille and Wall-E lines. I have been getting her up to speed and winding down all of my existing projects.
Overall, it was a positive experience. The people are wonderful and the job has more fun moments than pains. I definitely have a good feel for the industry and the issues it faces. Given the circumstances of an internship and THQ's modus operandi, I regret that I was not able to make a more substantial contribution to the organization. While I did keep the Ratatouille lines moving forward, opportunities were scarce to make an impact. I had to turn my research study into such an opportunity. I hope that its findings and methodology may prompt additional studies in the other video game groups.
But this feeling of a lack of opportunity extends beyond myself. When I walk around and I see the education levels and talent at this company, I feel the leadership could do more to empower its talented workers. It is definitely not an easy task for a company going through such growth and radical changes in the way it conducts business, but more can be done. Don't get me wrong. I really like the company. For this one criticism, I could list 10 good things about the company. My focus is always on how to improve. My suggestion is to find more ways to empower the workforce.
But thanks needs to sent out to THQ. They recruited me and welcomed me into the organization. Many people were most helpful in guiding me through the THQ maze. I just hope I returned all their faith and efforts in me.

MySpace Implications for the Consumer Technology Industry

A few weeks back, THQ was visited by sales reps for the Fox Interactive Media properties. The primary focus of the presentation was how MySpace plans to leverage its audience for consumer product companies. Essentially MySpace is moving towards being able to create detailed segments of their audience. It is mining every piece of content on an individual's MySpace page to categorize him or her for companies like THQ. Now, this kind of segmentation is happening throughout the internet, not just on MySpace. I am sure Facebook is doing the exact same thing.
At first glance, that kind of segmentation sounds awesome for consumer product companies, but, upon further thought, it also poses some grave consequences. The obvious benefit of this segmentation is that companies will be able to reach highly targeted groups of individuals. As a example, think about a TV ad - it will reach an broad audience of a particular show. The MySpace segmentation would effectively allow a company to send its TV ad to only males, 20-24 yrs old, who drive Honda civics that they have customized. That is very powerful.
On the consequence side, it means that these product companies need to know their customer. You can probably see I am building on the theme of my last post. You may say that I am over-reacting - "Trevor, video game companies can still just advertise to all males, 18-30 yrs old, video gamers and hit their target market". Maybe so, but don't forget the video game market is shifting with the rise of casual games. More importantly, this new level of data presents opportunity to those companies who learn how to leverage it.
One of the big teachings of an MBA program is how to strategically take advantage of technology by creating business structures that leverage it. The company that figures out how to identify their potential customers at the level of MySpace segmentations for each video game title (or any other product for that matter) will create a competitive advantage over other their competitors. I am not sure many B2C technology companies are ready to do this. If they don't a competitor will and they will be playing catch-up.

The implication of the movement to higher segmentation on social media sites like MySpace and Facebook is that companies need to better understand who are their potential customers.

Helping THQ understand its Customers

As the video game industry matures, it will need to invest in understanding its customers. Sometimes you get the feeling that games are made based on what the people in control of the process want to play (or what their gut tells them other people would want to play). Essentially, it is a glorified guess. For the larger companies, they deeply believe in this process because it got them to that level of success. They ignore the fact that they were lucky; while they guessed a successful game, there were 10 other companies who guessed wrong. Now, as these big video game companies grow and go public, they are subjected to heavy pressure to continue to create new hit titles. Well, they may be able to guess one hit game...maybe two...even three, but when their revenue projections begin to rely on 10-30 solid titles, the odds of guessing will catch up to you.
So what do you do? The initial reaction of a immature industry is to go conservative. They try to find ways to release sequels every year even though it will not move the title forward very much (essentially trading future brand equity for current sales). They look at the hits of their competitors and try to replicate it them. I think you can see every large video game company committing these faux-pas. What they need to do is try to understand their customer.
This past Friday, I completed one of the first projects that was assigned to me back in week one. The project was to analyze data surrounding video games of boy-targeted TV licensed properties. Incidentally, a goal of the project was to better understand the customer. For the project, I amassed an impressive data set that included sales, advertising, TV ratings, and platform install base info and tried to sift through it looking for key lessons about the genre.
It turned out to be a very difficult project. The difficulty was not in interpreting the results, it was finding the proper methodology that would deliver relevant results. To this end, I had to redo my research three times - revising data, finding new data, modifying regression methodologies. On that 3rd go around I was very relieved and amazed to get some solid findings.
Now, I am not going to reveal the key findings (thats why THQ pays me the big bucks), but I can say the results reveal two distinct levels in the target market that dictated different product types and different marketing strategies. I won't be so bold as to claim my results are hard and true facts about how this genre operates, but they are starting point for further observations to test the validity of my conclusions. More importantly, it establishes a methodology for other THQ brand managers to evaluate their markets.
...And that is a step towards better understanding their customers.

The New Social Company

Over the past few years, I have grown convinced that the way corporations operate need to change (especially as they grow) in the face of the internet revolution. My recent experience at THQ has only reinforced this belief. Here is a great slide show overview about how the internal operations can improve for the the better (they are very different from our fathers/mothers companies). Interestingly, the software that is featured would cost less than a Microsoft Office set up.



Things also need to change on the marketing front. This week I discovered Jeremiah Owyang's insightful blog that clarified the random thoughts that were roaming my mind. Check out this post about Why the corporate website is becoming irrelevant or How the corporation can no longer centralize their brand (in fact they should embrace this decentralization). These are incredibly scary propositions for old guard marketers who control brand like a top secret recipe. Good thoughts for food.

Effective Presentations

Some of my earlier posts have touched on the art of presentations and how I have been working hard on improving my presentation skills - oral and written. On the written side, I have discovered how less is more - Less slides, less text and numbers. As a reforming lawyer this less slides and less writing is strongly against my training. Instinctively, I want to create a detailed argument that creates a complete story - the more details, the more real and understandable my argument becomes. Of course for a presentation, this is completely wrong. A human mind can only absorb so much of a visual presentation (Check out my other post on this topic). Visual is the key word; a wealth of text or numbers on a slide just overwhelms the majority of human minds.
This doesn't mean you can't create slide decks with detailed information. You just can't use it as a presentation. Keep your presentation to the point - Intro, The point of your presentation (or why it is in their interest to listen for the next 10 minutes), key supporting reasons (just high level points), Conclusion. Use your detailed presentation as a supporting document given to your audience after the presentation.
Keeping in the theme of more visual - less reading, marketing guru Seth Godin has a very interesting article about the use of charts in presentations. Again, a person like myself thinks if I actually get a visual representation of data in my presentation, my work is done. Seth shows that this is not the case and that it can be made much more effective if you take the time to dig into what is the true point that the chart is trying to convey. You can find the article here.

Managing the Product Life Cycle

Over the past few weeks at my internship, I have come to appreciate some of the things that THQ does exceptionally well. One of these is managing the tail end of the product life cycle.
Too often video game marketing is all about creating the big splash. How do we generate consumer buzz and awareness leading up to the game's release? While this is incredibly important part of the marketing plan, the area that is oft forgotten is the "how do we generate bonus sales after the release period (the 3-6 month window after the release)?" That is why you often see the sales graph for video games having three distinct stages - 1) the bulk of the sales occur very early; 2) a dramatic drop; and 3) trickle of sales for a period.

THQ (especially THQ kids) is masterful at stage 3. Looking at their sales graph, you see a series of peaks scattered through the 3rd stage where minor marketing strategies deliver increased sales and solid returns for the added expenditures.

Let's look at the example of EA's Harry Potter: Goblet of Fire compared to THQ's Cars. It is safe to say that both of these franchises are popular, but I think it is fair to say Harry is more popular. The Cars video game received a slightly higher rating than Harry (gameranking.com has it at 71% to 68%). Overall, I say its a push and these games should perform equally well. Let's see...

The graph below details their monthly unit sales after their release (data taken from NPD). You can see they both start pretty strong then drop off (Harry's first peak is higher than Cars). But look at how they perform after month 6! Harry levels to around 10,000 units per month and slowly declines to zero. Cars declines; then around Christmas it shoots up to a point even higher than the initial release; then it declines to a level just above Harry's sales; and it even experiences another small peak around a year after the initial release. The final results are clear. Despite having a superior brand and being on the market for an additional 6 months, Cars has outsold Harry Potter by a ratio of 2:1.



Now, admittedly the Harry Potter game was critically reviewed as lesser than the Cars game. And we could argue that because Harry Potter was released in November, it could not take advantage of a Christmas bump 6 months after release, but does that really explain the 2:1 margin in unit sales? I argue that it doesn't. I think it demonstrates THQ's understanding that video game sales go on beyond 6 months from release and a marketing strategy that accounts for these opportunities beyond a simple price cut can reap big rewards.