The Exporter’s Dilemma

Many companies, particularly in the game space, have failed to match their local success in international markets. Ones that believe they are particularly data-driven have often had the worst results. The biggest single contributor is that these companies experience false negatives, negative results that they then extrapolate to the opportunities outside their home market. I refer to this phenomenon as “The Exporter’s Dilemma,” as a homage to Clay Christensen’s seminal work, The Innovator’s Dilemma.


Parallels with The Innovator’s Dilemma

In The Innovator’s Dilemma, Christensen shows that successful companies have trouble innovating because they know their customers too well. Innovating is about creating products that initially appeal to a new customer, which then evolves to penetrate the existing market. Existing customers do not find the new offering compelling, thus the company believes it is not an opportunity.

Successful companies also have trouble innovating because they are successful and they have built a structure that does not support small opportunities. Thus, an innovative opportunity may only contribute one percent or less to the bottom line, and thus the company does not put any resources into growing the disruptive innovation. Instead, a small competitor takes the opportunity and grows it into a business that then undercuts the established companies existing business.

There are parallels to both these issues when building an international social games business. Great games have already optimized for the core market. A top social game team is going to be a top team because they look at the metrics for their existing players and evolve the game to generate the best metrics from those players. That could include features that will perform well or licensing IP that resonates with the players.

When the company expands internationally, features that a Frenchman might like may be unattractive to an Australian. The Frenchman might like a feature where players work together to create beautiful art, while the Australian might prefer that by cooperating you create a race course. With IP (intellectual property), some of the strongest IP in one market may not have value in other markets. While a science fiction game in the US around the Star Trek IP would have a strong fan base, the same IP would not generate any traffic or appeal in Italy. Continue reading “The Exporter’s Dilemma”

Asia looms large for social casino games

With the growing importance of social casino products to the mobile and social gaming space, it is important to look at an important evolution in the land based casino world that will probably impact game companies. I have blogged many times about international opportunities for game companies, and these opportunities are going to become more important in the social casino space. A recent article in The Economist, “The rise of the low-rollers,” highlights how the Asia-Pacific region is expected to become the biggest market for casinos by 2015 (as recently as 2010, the United States made up nearly half the global gambling market). This evolution is likely to be mirrored in the social casino space. In this post, I am going to lay out some developments on the land-based side and you can extrapolate how it might impact the social casino space.

Sands Macau

Macau leads the way

When you look at Asia, you need to start with Macau, the former Portuguese colony now part of China. Described by Sheldon Alderson, the Chairman and CEO of Sands Corporation, as “The Las Vegas of the Far East,” its casinos generated $38 billion last year. Continue reading “Asia looms large for social casino games”

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