Market researchers playing in the video game space, with Mike Klotz

In this episode of the "Now That's Significant" podcast, Michael Howard interviews Mike Klotz, Head of Games at Nielsen, about the video game industry. Mike shared fascinating insights into how the gaming industry has evolved, the innovative research methods employed, and the integration of video games into other entertainment forms. Mike also shares insights into understanding gamers' behaviors and preferences, as well as the role of market research in shaping the development and marketing of video games.

Historical Context and Evolution

The conversation traces the gaming industry's journey from its origins in the late 1950s to its consumer boom in the 1970s with Atari and arcade games. Early games were simplistic, both in game-play and graphics, and research mainly focused on where players spent their time and money. Fast forward to today, and the landscape has transformed dramatically. Modern games span numerous devices, utilize diverse monetization methods, and involve sophisticated research at every stage—from concept to marketing and delivery.

The Role of Gamification

Gamification, the application of game-design elements in non-gaming contexts, has significantly impacted various industries, including market research. While the exact origins of gamification are unclear, its influence is widespread. For instance, fitness platforms like Peloton use gamification to motivate users, and even car interfaces incorporate game-like elements to encourage efficient driving.

"Gamification has invaded all aspects of life, from exercise equipment to vehicle interfaces." - Mike Klotz

Mike shares his experience with a company that attempted to gamify market research. They developed games to replace traditional surveys, collecting insights in an engaging way. Although this approach yielded better data, it was costly and not easily customizable. Despite these challenges, gamification remains a promising tool for making research more interactive and reducing respondent bias by lowering their guard.

Market Research and the Gaming Industry

The video game industry's evolution has necessitated significant changes in market research methodologies. The shift from physical retail purchases to digital downloads and free-to-play models has complicated revenue tracking. Companies now seek to monetize through in-game purchases and other ongoing revenue streams, requiring more nuanced and continuous measurement strategies.

"The way companies monetize games has changed dramatically, necessitating new research methodologies." - Mike Klotz

Mike emphasizes the industry's complexity and the broad range of research methods it employs, potentially more varied than any other sector. This diversity includes studying consumer behavior, game development processes, and marketing effectiveness.

Nielsen's research focuses on awareness and purchase intent for upcoming games. By tracking consumer excitement and interest, they help companies optimize their marketing strategies. Other research methods include focus groups, UX testing, and post-launch evaluations to understand spending behavior and engagement levels.

Innovative Research Methods

Research in the gaming industry has become more intricate. Companies invest heavily in early-stage research, from concept testing to playtesting. Playtesting, unique to the gaming industry, involves observing players as they navigate games to identify potential issues with usability and enjoyment. Feedback from these sessions is crucial for developers to refine game design and ensure a seamless user experience.

Generative AI in Gaming

The rise of generative AI has sparked excitement in the gaming industry. AI can streamline game development by automating tasks like scriptwriting and environment creation. However, there is a need to educate consumers about AI's benefits to alleviate concerns about its potential risks.

From its humble beginnings to its current status as a multi-billion-dollar industry, video games have revolutionized how we understand consumer engagement and behavior. As the industry continues to innovate, market research must evolve alongside it, embracing new methodologies and technologies to stay relevant.

Tune in to "Now, That's Significant" for more insightful discussions on market research trends and innovations.