Why did Grand Theft Auto V Video Game sell over $1Billion in 3 days?

The runaway success of Grand Theft Auto  V (GTA-V) as the biggest ever entertainment product begs the question why ? An earlier post on Entertainment:video game industry three times music and double movie industry, had proved popular, but the potential role of video games in promoting violence had reduced the enthusiasm of this blog from the video game topic. But an estimated 17 million units sold in the first few days being about double of the 9 million new iPhones deserves some serious attention from all types of business folks.  A deeper look at the "Why" of video game success is necessary because you hear the despairing refrain of "we are in the wrong business" from main stream media folks on television. Our logic is that if video games are so popular, its really important to understand why so that we can use some of the recipe of the video game industry   in our own businesses. 

  • 160 Million consoles install base: Having a large install base gives sharp segment focus to the marketer.The GTA V is only available for the 160 million owners of Xbox 360 and Playstation  3. If the current sales are about 17 million, we can expect that this number will rise. The install base is like  a captive market. Most people with the consoles play some video game as heavy or light users and will certainly think of getting the GTA V. While install base gives a clean segment for the marketer to focus (like brand printer cartridges to brand printers , proprietary  packaging materials to proprietary packaging machines)-if your product is spectacular like the GTA then the install equipment makers are willing to pay. For example, for GTA IV , Microsoft had paid $50 Million to have the first two episodes exclusively on the Xbox 360.
  • Psychological Needs: The psychological needs that video games fulfill are interesting. These include:
    • A Feeling of Competence:   Players get a feeling of competence. Instead of being told that "you lost ," the game allows you to become better. Quite unlike the constant "you are a loser" judgements people face at school, at work and even among friends and family.
    • Feeling in Control: Video games give the player a feeling of control and autonomy. You make choices,suffer virtual consequences both good and bad, but you can overcome adversity and succeed.
    • Virtual Social Relatedness: Altruism and being connected with society gives happiness. But according to research on the motivational pull of video games by Ryan,Rigby and Przybylski,video game players feel connected to players with whom they play online. And what is truly stunning is that video game players feel connected to the characters in the video game who are entirely fictional and virtual!
  • Escape that is safe: According to Cassie Gotto at Games Beat, the escape offered by video games is safe and the virtual violence is a way of getting your anger out, a bit like punching a bag in boxing. Given that three fourth of American hosehold buys game products and the installed base of game consoles is in hundreds of millions worldwide, its difficult to establish that actual violent behavior is caused by violent video games. This as most people  who play violent games  seem to be quite peaceful.
  • Branding as a sequel: Like movies and books that are successful sequels, GTA V uses the branding as a sequel strategy. Ever since the failure of "New" Coke, consumer marketers worry about sequel branding and maybe its time to re-think.

The success of video games is food for thought for all kinds of innovators and marketers because some elements of the success of GTA-V are probably applicable to most businesses. Contact StratoServe.

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