Showing posts with label market. Show all posts
Showing posts with label market. Show all posts

Monday 27 October 2014

Why does EA's FIFA disappoint some people EVERY YEAR?

It happens every September. A new FIFA game comes out and along with it comes a barrage of hate. "FIFA 15 is the worst FIFA yet. EA just hype up the game to let everyone down.", exclaims user 'oritepal' on the EA forums. Nathan Ditum of The Telegraph claims "FIFA 15 fails to greatly differentiate itself from its previous incarnations"- user 'Bada_bing8' agrees, dubbing 15 "another pointless iteration".

These people are often justified in their criticisms- EA seems to have a habit of hyping up their 'upgrades' to the game that change it little- they even dedicated a whole trailer of such revolutionary features, such as visibly breathing players and, best of all, moving corner flags. Meanwhile they often postpone their often impressive upgrades for later iterations.
And this is before we get to some of the worst aspects of FIFA- including endless in-game microtransactions, and sometimes unbearable online servers.

Despite this, FIFA is the best-selling video game in the UK, and has been so since its release. Hundreds of thousands, or even millions, of gamers worldwide are quickly hooked onto each FIFA iteration as soon as it is released- I myself have been one of them before.
Why? The answer's pretty simple. These gamers aren't stupid- they don't buy games that suck- FIFA evidently has a lot going for it. It's an addictive game, but that's not the only reason why people buy it.
People often buy it because there's nothing better. Football is the world's most popular sport, so evidently a good quality, constantly innovating football video game is what many people want. But FIFA doesn't always offer this- as we've covered earlier.
So, someone who knew nothing about video games would ask the question- why don't they buy another football game? A better one?
The principle is a core of business economics. It's what people believe to be the democratic part of consumerism- that if you don't like a product 'x', you stop buying it, and buy another, product 'y'. If enough people do it, the company making product 'x' will see a fall in profits and therefore to boost them, they will improve product 'x' to be as good as 'y'.

But this can't happen with regards to FIFA. Why? Because there's only 1 alternative to FIFA- and that has been suffering in past years. Pro Evolution Soccer (PES) has always been in FIFA's shadow in the sports game industry- Konami, makers of PES have not even been able to launch PES 15 by the key September month- they expect to release in early November, two months behind FIFA.

The difference between the success of the two titles is staggering- in 2012/13, EA sold 13.5 million copies of its FIFA 13 title- Konami a paltry 1.9 million. PES 15 in priciple is competition to FIFA, but in reality it is nowhere near.

EA has almost total domination of the football games market- they have no effective competition, they have a monopoly. What does this mean?

This means they have little pressure to develop their games, to innovate, to make them better. If FIFA 16 is not that much better than 15, EA will be safe in the knowledge that they're not going to lose all of their customers- simply because PES is not effective enough competition to steal away customers. This makes complacency- the key reason why EA perhaps does not improve FIFA as much as they could every year.

It's also why EA can afford to offer so many microtransactions- they stand nothing to lose from it, because people will not avoid FIFA solely because of them; PES doesn't even have a similar game mode. EA can only profit from those who choose to spend extra money furnishing their Ultimate Team.

So, why couldn't PES improve and catch up? Again, the answer is monopoly. If you've ever played PES, you'll notice that many teams don't have real kits of club badges, or even names. Chelsea FC is creatively called 'London Blues', Arsenal 'North London'.
This is because PES needs licensing to use the real kits and badges of these clubs- but who holds exclusive rights to Premier League licensing? That's right, EA- it's exclusive to the FIFA series.
And this issue has for long been the key weakness of PES. No matter how realistic the match engine is, it's a straight turn off for many if they can't play in the kit, or even use the name of their favourite club.

Windows Vista, the software that gave nightmares
to millions of users.
Monopolies can cause businesses in general to become lazy, complacent and stuck in the past. Significant examples other than FIFA could include Microsoft in the noughties (stuck in the daze of Windows XP's monopoly), and AT&T and Verizon in the USA- cellphone providers who have been the bane of many a phone user's life in America, largely due to poor customer service and inflating contract prices.

And many monopolistic companies will be happy to gobble up any potential competition. In 2011, AT&T made an attempt to acquire T-Mobile, the closest competitor of the two aforementioned providers. Why? Because if T-Mobile then got a larger share of the cellphone market, AT&T would not be threatened- if they owned T-Mobile, they'd in fact make a profit from that. T-Mobile's share of the market would be gobbled up by AT&T- decreasing competition and furthering market monopoly.

There are so many ways a lazy company can block competition and thus increase their monopoly. There are basic stuff we don't always notice- for example patents are a formidable way of blocking competition in a new and emerging market.
On the other hand, companies can open up themselves to competition- like Tesla, who earlier this year opened up all their patents to their competition. Giving up patents, exclusivity rights, whatever monopolistic agreements, will not create an easy ride for any company but it can give them the kick they need to provide genuine improvements to their products.

If EA was not hiding behind their exclusive Premier League licensing, if PES shared the same rights, FIFA would be far more threatened- PES would still have a far way to go but perhaps EA would receive the kick it needs to provide genuine and lasting innovation to its customers.


Tuesday 22 July 2014

German Cars: What Makes Them Special?

If you were to ask someone on the street what car they would like to own, without doubt among the most popular brand selections would be BMW, Mercedes or Audi.
These three German manufacturers have taken the global car market by storm in recent decades, and are now the epitome of the well-built, high quality yet mass-marketable luxury car.


VIDEO: http://bit.ly/XHupq2

Of course all their cars are not necessarily of the best quality on the market- the likes of Aston Martin and Ferrari to name just two produce cars closest to perfection- however the crucial aspect to why BMW, Mercedes and Audi are more successful and relevant to this discussion is because they are open to the mass-market. The average middle-class family cannot afford a four-door £150,000 Aston Martin Rapide; though a £23,000 BMW 3-Series is within the reach of many, an achievement highlighted best by how it has consistently maintained a spot in the ten top-selling cars in Britain since 2004. 

The success of the German car industry can especially be noted when compared to that of Britain's. In 2011, Germany produced 5.9 million cars, the highest number in Europe- Britain a paltry 1.3 million- many of these not for British brands but for foreign ones such as Nissan and Honda. 
And the domination of the Germans extends much further- two typical 'British' car makers, Bentley and Mini, are in fact far from British; Bentley is owned by Volkswagen, Mini by BMW. 
There are in fact no longer ANY mass-market 'purely British' brands- Jaguar, Vauxhall, Land Rover, even Aston Martin, are all foreign-owned. 

Germany's success in the car industry must also be put into perspective- consider that less than a century ago the nation was facing huge economic turmoil, the sort that provides textbook examples of hyper-inflation: the wheelbarrows of cash, the 200 million mark loaves of bread, the extremely volatile prices, the lot. 

Post-war reparations had put Germany in a terrible state in the early 20th century- but looking at Germany now, with such economic might that makes it the most influential state in the EU, it is clear that the German system has produced fantastic results.

There are numerous reasons for the Germans' successful car market, but one key reason is the industrial mindset, the 'manufacturing culture' that is fostered by the Bavarians. 


Britain's manufacturing industry has had a rough last 30 years- in this period shrinking by two-thirds. Margaret Thatcher's time as PM during the 1980s to many killed the secondary industry in Britain. I'm sure you've seen the images of striking factory workers, unhappy at Thatcher's crushing of worker unions and the closures of numerous car factories throughout the nation. 

Meanwhile, Germany has only been growing since the Second World War- whereas British car factories became a battleground for a class war between management and labourers, German factories were tight-knit, harmonious and therefore far more efficient. 


The closer relationship between workers and management is part of Germany's attention to what is known as the 'social market economy'- a type of capitalism that does not co-ordinate market activity itself, but at the same time provides support for society- be it in the form of universal healthcare, unemployment insurance and, most relevant in this discussion, trade unions. German workers enjoy among the highest secondary sector wages in the world, and are provided good working conditions. In contrast to the system in the USA for example, where entry-level factory wages were halved from $28 to $14 an hour, the Germans' higher investment in the workers pays off, creating a more co-operative and committed environment, where workers develop loyalty to their company, an idea almost lost in the US labour economy. 

German workers are in fact the most loyal in Europe- the job market is far more stable, meaning companies can afford to invest more in long-term training, and crucially it means workers on the production line are experienced and efficient in their job.

Output is also helped by the power given to the workers on the German production line. Almost all German factories will have members of the regular workforce on the executive committee of the factory- as a result the workers are given a voice in the running of the factory, and have the power to suggest changes that may improve efficiency. 

To those who may believe this system can be abused to benefit the workers at the cost of the company, this is where the German system really makes a difference. Loyal German workers who are decently paid already are more likely to not abuse their power to push such agendas.
This system making workers a part of the running of their factories increases the workers' morale, making them feel more empowered as part of a democratic operation.

The education system is arguably the biggest factor in German industrial success. Whereas in Britain all youths are pushed through the same educational system until the age of 16, after which they are offered either further education or half-heartedly the option of vocational education- such as BTEC, or Apprenticeships.

These being relatively young programs, they are not well-established and are avoided by many students, partly as they are seen as for those intellectually inferior to the further educationers (certainly not always the case).

Meanwhile Germany offers more choice to specialise at an earlier point. After the age of 10 (or 12 in some areas) student can study at the Gymnasium to pursue higher education such as university, or can opt for the Realschule or Hauptschule, schools that will provide education in core subjects such as Maths but have a heavier focus on vocational education and practical work experience.


These extra years provides a head-start for German workers and has created skilled, respected workers, ready-made to enter the world of manufacturing at the age of 18. German factories have had no shortage of skilled workers- and as a result the production lines are efficient and smoother than most others in the world.


Germany have certainly set the benchmark for efficiency in the manufacturing industry. It must be noted that Japan are similarly capable in car production. 

Worker empowerment, the social market economy and an established, effective specialist education system have propelled Germany to the top of the global car industry- and while other countries may not be able to fully translate German practices into their own car industries, it is certain that they can learn lessons from it.


SOURCES (And recommended reads): 

How German cars beat British motors - and kept going bbc.co.uk/news/magazine-23406467 (BBC, 2013)

Mercedes Benz, BMW and Audi Seen as Top Three Car Manufacturers in Terms of Overall Brand Quality By Europeans, According to New Harris Interactive Survey prnewswire.co.uk/news-releases/mercedes-benz-bmw-and-audi-seen-as-top-three-car-manufacturers-in-terms-of-overall-brand-quality-by-europeans-according-to-new-harris-interactive-survey-155096425.html 

Why doesn't Britain make things any more? www.theguardian.com/business/2011/nov/16/why-britain-doesnt-make-things-manufacturing (The Guardian, 2011)

Manufacturing lessons from Germany

German Lessons: DEVELOPING INDUSTRIAL POLICY IN THE UK www.tuc.org.uk/sites/default/files/tucfiles/germanlessonsedit.pdf

US carmakers cut pay as Australia's hourly rates soared www.theaustralian.com.au/national-affairs/us-carmakers-cut-pay-as-australias-hourly-rates-soared/story-fn59niix-1226779288772?nk=7680174eef8fa1a758fb359ff5cd292a (The Australian, 2013)

Consumer confidence drives record year www.smmt.co.uk/2004/01/consumer-confidence-drives-record-year/ (SMMT, 2004)

German workers 'most loyal in Europe' www.thelocal.de/20121014/45553 (The Local, 2012)

German School System www.howtogermany.com/pages/germanschools.html