In August last year, Activision's CEO Eric Hirshberg told investors that its upcoming shooter Call of Duty: Advanced Warfare was suffering from ‘an industry-wide downturn' in pre-orders.
Many commentators dismissed Hirshberg's comments, insisting that Call of Duty's problems were its own, not an ‘industry-wide' issue.
But in Hirshberg's defence, leading publishers had been telling us all summer of their struggle to stimulate pre-orders for even some of their biggest games. There were exceptions – Watch Dogs and Destiny received plenty of advanced orders – but anecdotally we were hearing of apathy towards pre-ordering. As a result, we asked consumer data specialist Ipsos Mori, the team behind the lauded GameTrack surveys, to ask its base of consumers if they were holding off pre-ordering, and if so why?
We printed the headline results last week. In the UK, 23 per cent of gamers aged 11 to 64 pre-ordered at least one game in 2014, a far higher proportion than France (13 per cent), Germany (16 per cent) and Spain (12 per cent). Five per cent of UK gamers pre-ordered more games in 2014 than in 2013.
However, the declines in the UK were far steeper. Nine per cent said that they had pre-ordered fewer games, while 11 per cent said they stopped pre-ordering altogether (for the rest of the data, ten per cent said they pre-ordered about the same, 49 per cent said they have never pre-ordered, while the remainder ‘didn't know').
The survey was confirmation that customers were turning away from pre-ordering. But does it really matter?
Whether physical or digital, pre-orders are good indicators of the levels of purchase intent you have been able to generate,” says Tim Woodley, SVP of global brand and marketing at 505 Games. Other key performance indicators (KPIs) are somewhat arbitrary, but the start of the pre-order is that moment where you're asking your consumer to vote with their wallet. It is the ultimate conversion point.”
It's a point backed up by one very senior UK industry executive, who spoke to us under the condition of anonymity: The dynamics are changing, but pre-orders are still important and will continue to be. It's the best way of judging how successful your game will be.”
However, the exec adds, consumers are still coming out. They're just not all buying on day one. Week one is still the most important time,” he says. But we're seeing sales decline at a slower rate than before.”
"Consumers frankly get bored with uninspiring,
recycled or copycat pre-order offers."
Tim Woodley, 505 Games
So what is causing the drop in pre-orders?
The problem may be due to the fact that publishers and retailers have done a pretty good job of supplying the demand,” continues the publisher boss. When was the last time a game sold out? There's no fear of that anymore, and that was one of the big drivers behind pre-orders.”
He also theorised consumers are demanding more. They want good pre-order incentives. Digital add-ons are popular, but what you don't want to do is give pre-order customers an advantage over non-pre-order customers. You'll just piss someone off.”
Woodley agrees: As with any marketing in the modern era, any incentive offer has to be engaging or imaginative. Consumers frankly get bored with uninspiring, recycled or copycat offers, whether that's the omnipresent pre-order t-shirt from years gone by or the ho-hum run-of-the-mill digital content offers of today.
A few notable examples aside, things have become very formulaic in the pre-order space. It is incumbent on marketers to bring creativity and innovation to their pre-order incentive schemes.”
Both these theories are backed up by GameTrack's report. 12 per cent of those that are pre-ordering fewer games, or had stopped pre-ordering, said that it was because ‘there is always stock'. Seven per cent said that the pre-order bonuses were ‘not good enough'.
But actually the main reason, according to GameTrack, is that consumers are spending money on other non-gaming products (29 per cent). This is hard to qualify, especially as overall game sales increased last year, so it might suggest consumers are being distracted from pre-ordering by alternative entertainment.
The second-biggest reason is in relation to price. 25 per cent said they were pre-ordering fewer games because they ‘prefer to wait for the price to come down'. You can appreciate this thinking, especially when games last year – such as Alien: Isolation and The Evil Within – were sold for over 50 in October, but cost a little over 20 during Black Friday at the end of November.
On page 16, Scottish retail chain Games Centre claims it saw an increase in pre-orders last year, and puts that down to special pre-order discounts and trade-in offers it ran. Which just goes to show how price sensitive consumers remain.
The problem may be due to the fact that
publishers and retailers have done a pretty
good job of supplying the demand. When
was the last time a game sold out? There's
no fear of that anymore, and that was one
of the big drivers behind pre-orders.”
Anonymous industry executive
One of the other assumptions that came through our social media feeds is that consumers are not pre-ordering due to a spate of games launching below the quality expected – including with bugs.
Ten per cent of those that have stopped or slowed their pre-ordering said they were waiting to see what critics and friends said about the game. It's important to note that this survey was conducted during Q4 last year, so high profile issues that impacted games like Assassin's Creed: Unity, Halo: The Master Chief Collection and DriveClub had only just occurred, and these results may not entirely reflect those concerns.
We haven't helped ourselves with all those games launching with problems,” said the exec. I expect some gamers will be wary about pre-ordering this year because of that.”
But one interesting suggestion as to why gamers have stopped pre-ordering, is that they no-longer want to wait for products.
We live in a world of immediacy and instant access. Anticipation and expectation can be frustrations rather than buzz-builders,” suggests Woodley. In a post-Steve Jobs era where a product can be announced one day and available in stores the next, consumers have become trained to expect instant availability. Overly-protracted marketing campaigns are fighting against consumer behaviour and the concept of pre-ordering starts to look antiquated.”
In a world where people can stream an entire new TV series immediately via Netflix, could customers be ignoring a game that's not out for nine months?
Now that's an interesting suggestion,” says our anonymous exec. Impossible to quantify, but that makes a lot of sense.”
So perhaps the industry's obsession with pre-orders is damaging. Perhaps a game might enjoy more success if publishers announced them closer to launch. No need for multiple PR beats and excitement can carry from announce to launch. But it would be a brave publisher to try it.
For now, pre-or