Breaking The Wheel

A picture of Dark Souls and an Ikea location, both instances of strategic design in action

Strategic Design: Why Dark Souls is the Ikea of Game Development

One of the sources of crunch is the proverbial kitchen sink: throwing too much content and too many features into a design with too short a production schedule. The reasons can be myriad. Features in competing games. Pressure from publishers or marketing departments. Overblown ambition. The instinct makes sense. As the saying goes, nobody sets out to make a bad game and to that end there is a reluctance to cut corners or make omissions that would compromise quality. But, what if there was a way to cut content and features strategically, so as to make your game more competitive and better serve the needs of your fans? Enter: Strategic Design.

Featured image created by author. And a beaut it is!

Note: an earlier version of this post first appeared on my old blog on March 21st, 2014.

Strategic Design: Why Dark Souls Is The Ikea Of Video Games

As the old saying goes, “the surest route to failure is trying to please everyone”. Or to go back to Fredrick the Great of Prussia, “He who defends everything defends nothing.” Strategy isn’t just about what you do, it’s about what you choose not to do. And at first glance electing not to do something, not to include some piece of content of feature, might seem like you’re compromising the quality of your product. But that’s only true if you assume that all features are valuable to all people. The key to strategic design is to understand what your target audience doesn’t care about and eliminate it from your design to focus on what they do want.

By Reading This Post, You’ll Learn

  • A formal definition for “competitive advantage”
  • The components of a true competitive advantage
  • Real-world examples of companies that successfully leveraged competitive advantage to dominate a market niche
  • How to apply the notion of competitive advantage in video games using strategic design

To Understand Strategic Design, First Understand Competitive Strategy

Micheal Porter, a professor at the Harvard Business School, is possibly most famous for his trademark “Five Forces Analysis”. But he is also the author of one of the definitive books on competition, Competitive Strategy. Porter argues that efficiency, while important, is not enough to create a true competitive advantage.

Imagine a firm is using the most cutting-edge technology and best practices, to the utmost level of efficiency. Porter calls this “the productivity frontier”, it is the pinnacle of production. You can’t increase quality without increasing cost, and you can’t decrease cost without sacrificing quality. In short, it’s a point of competitive equilibrium. You can’t do better than the frontier.

That is, of course, until someone figures out how to exceed the frontier. It might be some new technology or process or trade secret, but a firm will devise a way to be better. For a while. But, eventually, the competition will catch up, the market will re-establish equilibrium.

Shifting the Productivity Frontier

In simpler terms, being the most cost-effective company only puts you in the lead until the rest of the market determines how to be just as efficient. Porter calls this “shifting the productivity frontier”.

Further, Porter argues that a firm can either iterate (do things better) or it can innovate (do better things), but it can’t do both at once: a new technology or product will, by definition not have an established best practice, so iterations must occur before that relevant productivity frontier can be found.

Porter argues that efficiency, while important, is not enough to create a true competitive advantage.

What’s A Company To Do?

So what is a true competitive advantage? In Porter’s mind, strategy is not just about product or process, but structure. To quote the man himself (emphasis his):

  1. Strategy is the creation of a unique and valuable position, involving a different set of activities. Strategic position emerges from three distinct sources:
    1. serving few needs of many customers (Jiffy Lube provides only auto lubricants)
    2. handling broad needs of few customers (Bessemer Trust targets only very high-wealth clients)
    3. serving broad needs of many customers in a narrow market (Carmike Cinemas operates only in cities with a population under 200,000)
  2. Strategy requires you to make trade-offs in competing-to choose what not to do. Some competitive activities are incompatible; thus, gains in one can be achieved only at the expense of another area…
  3. Strategy involves creating “fit” among a company’s activities. Fit has to do with the ways a company’s activities interact and reinforce one another…°

And Now, in Plain English

What does all that mean? In order to have a true competitive advantage, you cannot be all things to all people. You either need to be all things to few people, or few things to all people. You need to make trade-offs that your competitors will be unwilling to take. And you need to refine your operations into a network of sympathetic processes that reinforce and resonate with each other.

Strategy requires you to make trade-offs in competing-to choose what not to do.

Porter’s Classic Example: Southwest Airlines

Examples help. Porter specifically covers Southwest Airlines†, which in the 1990’s was a prime example of competitive strategy:

Southwest was all things to a few people

It was a full service airline targeting price sensitive customers traveling between regional airports who didn’t care about things like first class cabins or frequent flier miles.

Southwest made trade-offs that United and American Airlines didn’t

Southwest focused on regional airports and avoided highly competitive, “hub & spoke” routes that characterized larger airlines. It didn’t have mileage program, which reduced its appeal to frequent travelers. It only used Boeing 737 jets, and didn’t use larger jets to serve busier routes. And it did not deal with baggage transfers.

Southwest had an outstanding business fit

Here’s where the trade-off’s from part 2 provided an advantage. The regional routes had fewer supporting airlines, so Southwest had less competition. The lack of a frequent flier program meant that ticket purchasing was more streamlined, reducing overhead. The use of a single model of jet meant that crews only needed to support one kind of apparatus, so they needed less training and only had to carry parts for that model. No baggage transfers, the lack of first class or assigned seating, and the ease of maintenance mean that Southwest could regularly turn jets over in 15 minutes, rather than the typical 30 minutes of other airlines.

So what?

The net result: Southwest was faster, cheaper, and more efficient than its competitors. But, to reinforce Porter’s point, Southwest wasn’t faster, cheaper, and more efficient because it had some special sauce, and it wasn’t a universally better airline than its competitors (if you wanted to fly to Beijing, Southwest was useless).

It was faster, cheaper, and more efficient for a specific customer base, because it made trade-offs designed to maximize value for that specific customer base, and then refined it’s activities to reinforce those trade-offs and optimize efficiencies. If it had tried to make those trade-offs, but serve everyone, or served its customer base but used the same business model as a United or an American, Southwest would have been brown bread.

Southwest vs. Continental Lite

But the opposite is also true: Continental tried to compete with Southwest by developing its own regional, low-fair model, Continental Lite. But it wasn’t willing to make the same trade-offs: it wasn’t willing to eschew its frequent flier program or first class seating, or eliminate baggage transfers. The attempt was a massive failure, and resulted in the sacking of the CEO.

If Southwest Airlines tried to make those trade-offs, but serve everyone, or served its customer base but used the same business model as a United or an American, it would be brown bread.

Continental, one of the world’s most powerful airlines, went head-to-head with Southwest, and got its ass kicked. That’s the power of strategic positioning. Unless a firm is willing to make all of the trade-offs of the strategically positioned competitor, it won’t be able to compete head-to-head effectively. As Sun-Tzu once said, “If you know your enemy and know yourself, in a hundred battles you will never be in peril.”

Ikea’s Strategic Positioning

Ikea is another great example. Like Southwest, it is all things to few people. Ikea sells furniture, but it focuses on a relatively narrow market: young people with rigid schedules and budgets that make them more price sensitive and less quality and time sensitive. And it makes a  lot of trade-offs to serve that market at the expense of others. For instance, Ikea:

  • Locates its stores in suburban areas where it can build big warehouses and huge parking lots.
  • Provides child care facilities for parents.
  • Provides food courts so customers can come directly from work.
  • Does not allow you to customize the furniture. This streamlines inventory at the expense of attracting more affluent, quality-sensitive customers.
  • Lets customers assemble the furniture themselves. This also streamlines manufacturing, and allows each store to stock more product and deliver more furniture per truck load. It’s much easier to stack cardboard boxes than assembled furniture.
  • Does not have representatives to attend to each customer and follow them around. You show yourself around the floor and all the show model WYSIWYG furniture. Again, this turns off more affluent customers who might need a rep to guide them through upholstery and delivery options, but it drastically cuts down on overhead.

To beat a dead horse, these trade-off’s serve the target market better, and are complementary and reinforcing, and make it harder for competitors to go head-to-head with Ikea.

But What About Dark Souls?

Winding my way back to the headline of the article, what is Strategic Design? How does Dark Souls fit into this line of reasoning? How, as the headline states, is it the Ikea of video games?

Well, think about it. Dark Souls (and Demon’s Souls before it) is all things to few people. It targeted a very specific audience: hardcore gamers who want a hardcore experience. And it made trade-off’s that allowed From Software to be efficient and highly competitive. Think of how many other publishers and developers would – or would not – be willing to make these same choices.

One difficulty level targeted at elite gamers

From Software only needed to test and balance for one type of experience, which is drastically more simple than having multiple difficulty levels.

No real tutorial to speak of, because Dark Soul’s core audience doesn’t need and, to a certain extent, probably doesn’t want one

To the core audience, discovering the in’s and out’s of the game, individually and as a community, is part of the experience. And tutorials are expensive, error-prone rat’s nests of edge cases.

No heavy narrative experience, providing a sense of mystery and discovery

Having few cinematics and sparse dialog saves money and logistical overhead. While cinematics and dialog are straightforward to create, they are highly inflexible. Changing those types of assets after they are created carries a significant cost.

Focused multiplayer tailored to the Dark Souls experience

No CTF, or territories, or team deathmatch. There was one kind of multiplayer experience, love it or hate it.

From Software is an expert at Action-RPGs

Dark Souls can trace its lineage all the way back to King’s Field. In other words, From Software had been making action-RPG’s for a long time. Knowing the kind of game you’re making, and its particular nuances and pitfalls, is a learning curve that money can’t buy. From Software isn’t chasing market trends, it’s making the games it knows how to make.

Consistent engine, even if it isn’t top of the line

They know it inside and out, and known tech is predictable tech…mostly.

Sparse music adds to Dark Soul’s lonely, oppressive atmosphere

It also saves money. This is a quintessential trade-off in my mind – a sacrifice that most companies would be unwilling to make is an asset for a game like Dark Souls.

The absence of music is a quintessential trade-off – a sacrifice that most companies would be unwilling to make is an asset for a game like Dark Souls.

The Outcome

So what? How does any of this matter. Well, here’s the kicker: Dark Souls sold 2 million units and was considered a success: the trade-offs llowed it to maintain a budget low enough to make that fan base profitable. That’s a the power of strategic design.

Contrast that with Resident Evil 6, which attempted to be all things to all people (almost literally) and was considered an abysmal failure because it didn’t sell 7 million copies (that’s A LOT of copies). Capcom was unwilling to make trade-offs, spent like it was entitled to a windfall, and fell flat on its face.

Resident Evil 7 Producer Masachiki Kawata summed it up rather laconically: “By trying to please everyone, you please no one.”

Further Reading If You Enjoyed This Post

Marketing Games: Sun Tzu and the Fine Art of Succeeding Before You Begin

Five-Forces Analysis has Grim Tidings for Free-To-Play on Mobile

Game Marketing Strategy: Mapping Out Your Path to Success

The Lesson Learned

Here’s the moral of the story: if you can’t make trade-offs to tailor your product to a specific market – if you can’t think strategically about your design – and be efficient enough to make that market profitable, then the path forward is to hedge your bets and serve the broadest possible base with the lowest common denominator product (like Jiffy Lube).

In the case of games, that means sequels (for the brands that work), increased homogenization, and a brute force approach to competition. Bigger budgets, more content, and an ever-larger (and less focused) feature set. And that brute force approach usually brings crunch along with it.

Resident Evil 6 attempted to be all things to all people and was considered an abysmal failure  because it didn’t sell 7 million copies. Capcom was unwilling to make trade-offs and fell flat on its face.

It’s important to understand that strategic design does not mean compromising your creative vision for the sake of sales dollars. Nor does it mean using surveys, interviews, and focus groups to make your design decisions for you.

It means looking at your core design, understanding who the target audience is for that design. It means analyzing what features they like, what features they can live without, and, most importantly, what features they might like but that no one else is providing.

Determining the target audience is a multi-step process that begins with segmentation and targeting. So click the link to read on!

Key Takeaways

  • Competitive strategy is as much about what you choose not to do as it is what you choose to do
  • By choosing compromises that your competitors are not willing to make, you can can create a true competitive advantage that is not easily replicated
  • Designing strategically means tailoring the experience for your target audience and cutting the features that that audience doesn’t care about; this allows you to focus your time, energy, and resources where they will be most effective
  • Designing strategically can compromise the value of your game for players outside your target, but it will increase the value of your game for target audience, making your game more competitive with that segment
  • In order to tailor your design, you need to know who your target audience is, which starts with segmentation

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