Q&A: Cai Looks Beyond 'Hardcore Vs. Casual'

In its recent survey, Electronic Gaming in the Digital Home, market research firm Parks Associates attempted to shift the focus of the games industry away from "hardcore" and "casual" gamers, instead suggesting that the games market has diversified into six separate categories of gamers. Based on the responses of online gamers in the U.S., the study's important distinction was in removing the individual’s expenditure from the methodology, rather concentrating on motivation and attitude in relation to games. Yuanzhe (Michael) Cai, director of broadband and gaming at Parks Associates, has previously researched topics including mobile platforms and multimedia networks, and has presented his findings at industry events such as CES and E3. He notes that the survey shows that the games market "is not black and white anymore, and game marketers need to understand these finer nuances." Gamasutra contacted Cai via email to ask about the results and the implications of the survey. What was the methodology of the survey? Electronic Gaming in the Digital Home is a primary consumer survey of U.S. Internet gamers (defined as gamers who have Internet access and play electronic games for at least one hour per month) aged 13 and older. The survey was conducted from April 24-28, 2006. The survey sample was representative of the U.S. online population. 2,002 qualified respondents completed the survey. What are the six groups identified? We first identified the median of total monthly gaming time among all Internet gamers, which came out at approximately 20 hours and was used as the threshold to separate the entire sample into two tiers. Within each tier, we used cluster analysis based on 17 attitudinal questions to further identify unique gamer groups. Six gamer groups were identified, including four under Tier 1 (gamers who play 20 hours or more per month) and two under Tier 2 (gamers who play less than 20 hours per month): Tier 1: power gamers (11 percent, 5.9 million), social gamers (13 percent, 7.2 million), leisure gamers (14 percent, 7.4 million) and incidental gamers (12 percent, 6.7 million) Tier 2: dormant gamers (26 percent, 14.4 million) and occasional gamers (24 percent, 13.1 million) Why have you described the casual and hardcore markets as "mythical"? Although most people define hardcore gamers similarly (still, different companies may have different standards), nobody really has a clear definition of casual gamers. Casual gamers may refer to anything from "everyone other than hardcore gamers," gamers who spend little time and/or money on gaming, to gamers who mainly play casual games such as card or puzzle games. When you talk to someone in the industry about casual gamers, you frequently need to first spend time defining casual gamers. Of course, our approach is just another way to slice and dice the gamer market, but we did try to look beyond these two vaguely defined market segments. Why do you feel social gamers, leisure gamers, and dormant gamers represent an untapped market? Compared to hardcore gamers, whom the gaming industry addresses very well with constantly evolving content and services, the middle-market gamers are less studied and understood. A much smaller percentage of game developers and publishers can confidently say that they have content and services that appeal to these gamers. Nevertheless, if they examine the middle market carefully, they stand to benefit from new revenue opportunities and the gaming industry can make the pie bigger. For instance, dormant gamers are fairly motivated to play games and they actually spend the highest dollar value per gaming hour -- even higher than the power gamers -- yet due to lifestyle changes, they cannot find enough time to play games. These gamers are ideal for snack-sized yet challenging games. Our research also shows that leisure gamers show strong interest in web-based online gaming services that offer not only game content, but also community features such as gamer ranking, friend tracking, and instant messaging. These gamers are seeking a sense of persistence and community, although they don't want to invest the money and time required for MMOGs. How can publishers take advantage of this "middle ground"? First, they must understand the demographics of middle market gamers, their gaming behaviors, and their interest. Second, they should design games, services, and business models specifically for the middle market gamers instead of treating them as an afterthought or wishfully thinking that games designed for power gamers will magically appeal to everybody. Third, publishers should recognize that middle-market gamers are less likely than power gamers to talk about games all the time, and therefore it's vital to know where they acquire information about new games and services. Fourth, they can leverage game advertising to monetize the middle market gamers. If the leisure gamers spend so much time (58 hours per month) playing games but not a lot of money, then generating ads revenue from their eyeball hours makes sense. How can marketers target or gauge "motivation and attitude" effectively, and why has this not been a focus in the past? Motivation and attitude are what really defines a person/gamer. Nevertheless, they are more abstract than factors like time and money. That's why we further analyze the demographics and behaviors of the different gamer groups based on motivation and attitude. For game marketers, understanding the gap between motivation and actual gaming behavior will provide plenty of interesting insights. For instance, if there are gamer groups out there that are quite motivated to play games and actually spend a fair amount of time gaming, then the important question is how can we make more money off them? Why has this not been a focus in the past? That is a tough one. I guess it's more complex to do and harder to explain. Also, remember people have comfort zones and companies have active inertia. Why do you think it's necessary to leave out gaming expenditures from this survey in order to explore new business models? If gaming expenditure is used as part of the methodology, then it will bias the results. How different gamers spend money is tied to pre-existing business models. Certain middle-market gamers with high motivation but low expenditure may have done so because they can't find game content and services that fit their lifestyle and appeal to them. Since an important goal of the study is to explore new business models and revenue opportunities, we chose to leave gaming expenditure out. Doing so can also free marketers from the shackles of current business models and allow them to explore new ways to monetize gamer groups that are highly motivated but do not currently spend much money on gaming activities. After the groups were identified, we analyzed gaming expenditures through cross-tabulations and the results made a lot of sense. With power gamers accounting for 11% of the market, but almost 1/3 of expenditure, do you think they will inevitably still be the focus for many publishers? That is a great question. Only a small percentage of companies become successful by addressing all consumer segments. Proctor & Gamble has a solution for pretty much every one but there are not many Proctor & Gambles out there. Although differentiation and price are frequently two important competitive dimensions, companies can also become successful if they focus on niche markets. In the retail market, you have Whole Foods but you also have 99C. I guess what I'm saying is that companies like EA might be able to afford targeting all gamer groups, but smaller companies and new market entrants can become successful if they focus on the middle-market, which represents 56 percent of the retail market. These gamers also represent good online opportunities. There are only so many gamers who are willing to shell out $50-60 whenever a new Madden game comes out. If more companies come to realize that there are a large group of non-power gamers out there, ripe with opportunities, we'll see more activities in those markets. Is there overlap between the groups - for example, wouldn't many power gamers also be social gamers? No. These are exclusive gamer groups. The names of the gamer groups are based on their most differentiating attributes. For instance, social gamers are called "social gamers" because they do not enjoy gaming alone; they prefer to play games with others, and are likely to play games because of family or their friends' requests. Power gamers definitely value the social aspect of gaming. They also enjoy playing casual games, but we don't call them casual gamers. Let's put it this way, there are overlaps between the attributes of different gamer groups, but not group membership. Why did the importance of social interaction to all these groups come as a surprise? Right now MMOGs and online FPS games seem to be all the rage. MMOGs are essentially a big chat room, right? The result that middle market gamers also value socialization does not surprise us per se, but it is surprising in the sense that the industry has not paid enough attention to this obvious fact. Many gaming services targeting non-core/power gamers tend to focus on content access and single-player games rather than community building and multiplayer gameplay. Club Pogo was successful partly because of its focus on community features. It's actually interesting when you think about this: MySpace now has more than 100 million registered users and even WOW, the most popular MMOG, pales in comparison.