World of Starbucks? by Eli Jones
Jun 01, 2007 20:45:01

Shut your eyes and click any link on a site that covers MMOs these days and you'll find some comment, some reference, some idea in there that is either directly about Blizzard's World of Warcraft, or compares one game or another to it. Obviously we were all surprised when WoW proved that there are a heck of a lot more online gamers out there than anyone realized, but that's not as much of a shock to any of us who started back in the 80s playing MUDs - heck I tried to get everyone I knew playing TrekMUSH when that hit the scene, and even my Luddite brother was hooked once he saw it wasn't Ogres and Dwarves. Still, it's hard not to be amazed at the whole phenomenon going mainstream.

Developers have been very active trying to grab some of that market. Every major distributor is buying up as many MMO properties as they can justify to get a piece of the action, but we're still firmly in the phase of copycat development, where emulating WoW is a higher priority than actually improving on it. Next year, 2008, will see the first of what I would truly consider the next generation of games, but still we're a long way off from real innovation in game play mechanics, social systems and the like.

The point that amazes me in all this is that in the frenzy of developers and distributors working their teeth off to steal some of Blizzard's users, is that there is scarcely a word about other businesses that have done exactly the same thing Blizzard has done in other industries. The game development community was caught like a deer in the headlights of the gamers driving to the bank to get some cash to pay Blizzard.

So let's rewind twenty-five years and take a look at another company that literally made an entire industry happen out of nothing: Starbucks.

In the 1970s, unless you were a very unusual consumer in American, coffee was something you got in a can and scooped into a machine that just woke you up. Early in the 80s a trio of friends in Seattle, English teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker, inspired by their friend Alfred Peet, opened a store in Seattle to sell high quality green (or unroasted) coffee beans and equipment to prepare the lovely drink in your home. At that time coffee importers in America had absolutely no interest in buying the higher quality beans used in Italian espresso drinks, called the Arabica variety, because airlines, hospitals, grocery stores, businesses, convenience stores, and practically everyone else wanted their coffee in said cans with scoops. That's where the money is.

Ten years and a few truly inspiring trips to Italy later, it took a young Howard Schultz buying Starbucks for them to open a store where you could actually walk in and buy cups of Espresso drinks. The rest is history of course. Now Starbucks is the 800-lb gorilla in the room, with 13,000+ stores, more than half of which they actually own.

So why is that important? Bear with me here, I'll be back to gaming in just a minute.

At its current size, Starbucks is not in the business of making great coffee any more. That is certainly how it began, but recently even Howard has admitted that they've lost their quality and have to work to get it back. What they did do was make it possible for you to open a coffee shop on practically any corner in any city in the country. So Starbucks didn't teach everyone what great coffee tastes like, they taught everyone to buy espresso from coffee shops.

Starbucks created demand.

There's a myth that you can't compete against Starbucks, but that is not the case at all. Having opened several successful coffee shops, I can tell you that there are always customers that will go to an independent coffee shop for better tasting coffee, a cozy environment, and cooler Barristas. Starbucks even took the whole idea of comfortable seats cozy shops from the plethora of small coffee shops that sprouted up in Seattle in the 90s - because they were so successful. I would, and have, opened coffee shops right next door to a Starbucks that are very successful. Trust me, the shop owners who try to copy Starbucks instead of discovering their own niche are the least successful of them all.

So what are we seeing? And undiscovered market. Service. Fierce loyalty. Huge market share for one company. Changing technology improving the product. And the product itself is what sells the shops to their customers, not the other way around.

Sound familiar?

Fast forward to today. Blizzard has the lion's share of the MMO market, but not even close to all of it. But game developers are still totally focused on reproducing WoW instead of focusing on the niches that can be, and are, profitable. Things are changing, and developers are getting the idea, but slowly. Guild Wars, Eve Online, City of Heroes and Villains, and Anarchy Online have proven that there are players out there willing to pay for games that aren't copies of World of Warcraft.

Developers, take the diapers off, start thinking about innovating the actual gaming, and forget about Blizzard's market share!

Oh, and as a reward for staying with me this long, I have a little Coffee Trivia for you. I believe this actually contrasts with Gaming instead of paralleling it.

Did you know that every specialty coffee company you've ever heard of - Starbucks, Peets, SBC, Tully's, the little shop on your corner, all the roasters and every bookstore or hole in the wall, or gas station, everyone you've ever seen sell a cup of Espresso - all amount to just about 12% of world coffee sales? The big money is still in the cheap stuff.

-Eli Jones

Submitted by Brent on Jun 01, 2007 20:45:01 CST (comments: 2)


Comments:


'Great point' by Valentein
Submitted on 2007-06-01 22:15:37 CST
I hope you're right. Wow is the gateway experience right now for MMO and just because, like Starbucks, it's a juggernaut doesn't mean there aren't a great deal of niches available for other games.

The biggest hurdle for this idea, however, right now though is that the cost of developing an MMO is so expensive. But this genre is still in its infancy. As developers become more experienced, best practices become more formalized, and 3rd party MMO engines start to become easier to use and customize we'll those cost come down.



'Is capitalism the right route?' by scytale2
Submitted on 2007-06-02 03:44:18 CST
In the infamous Simpsons episode where Homer visited the "Land of Chocolate", you can see a hint of where people's virtual world aspirations might be.

Problematically, everything seems to revolve around the corporate. Last night's Money programme talked about the Reebok shop, where you can design your own trainers and buy them, which is fine because it caters to the "retail" need that people have. But ideally people don't want to go to a Reebok shop, they want to go to a trainers shop, or indeed a sports shop, so they can try all brands. Well, in fact they want to go play sport on-line with others or a computer-controlled opponent wearing their new trainers. Well, in fact they want to compete on-line in a worldwide sports tournament for big prizes or for the honour of competing for theuir country and accolades.

This bottom-up approach that we have now doesn't work very well and results in a rather lightweight and haphazard end-product which does very little (Second Life). So how do we get a top-down approach? Who has the muscle to start up a Virtual Olympics, which anyone with a PC can strive to participate in for their country?

Interesting article btw.




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