The Saturday morning key note talk was given by Abizar Vakharia, the Director of Interactive Entertainment at Microsoft, or, to put it another way, the guy in charge of the XBox. The talk was liberally interspersed with XBox videos.
IEB = Interactive Entertainment Business – XBox.
When Microsoft launched Kinect, they sold about 10 million units.
What is marketing’s role in product innovation?
You start with building blocks. (Here Vakharia used the building blocks metaphor as a way to tell his life story – family moved from India to Kuwait, etc.) You use building blocks to create a value proposition. Value is the perceived worth of what you get in exchange for what you give up. What does the car you drive do for you, in comparison with alternatives that you might have picked. A proposition is an offer of an experience that includes products, services, convenience, ease of use, or “psychic” benefits. A value proposition is a concise expression of potential benefits you provide to a customer that outweigh the sacrifice compared with the alternatives.
Here we got to see an XBox promo of armored fighters shooting each other, and a city on fire. This game has grossed more than any box office movie. About half of the people in the audience knew the game, Kato, which runs only on XBoxes.
How do you match a value proposition to Ikea furniture? It’s much more than words (e.g. Ikea, modular, ready to assemble, self-selection, large parking lots, long hours, on site low cost restaurants).
Why is a value proposition important? It makes everyone focus on outcomes. (We then got an anecdote about the difference between seeing yourself as laying bricks vs. seeing yourself as building a cathedral.)
Transforming our value proposition: What do our current customers love? Kick ass games. What about our not yet customers, who are non-gamers? They might want to watch TV, listen to music, and play social games with friends.
Kinect was the answer. Kinect = freedom to enjoy your entertainment any way you want. It offers easier new ways to interact, entertainment in the living room. You Are the Controller.
We then saw Kinect clips: Halo 4, Kinectimals (with accompanying plush toys and the ability to move them to your cell phone), and interactive TV.
They came up with the marketing words three years ago, and this shows focus. XBox is now the #1 gaming console in the world. There are now more than 35 million members of XBox Live.