Consider this recent piece from the official Sony Playstation blog. There is a blockbuster game, Killzone 2, in the pipeline coming from Sony Computer Entertainment. Recently, the blogosphere heavily criticized Sony for its marketing strategy for the game. If you are a North America member of Playstation Network, the only way to download the demo is to preorder the game from GameStop. In fact, it really looks like deserving those criticisms. But I am a little skeptical. Sony Playstation is the legend in console gaming. Its Playstation 2 console has sold 125 million since its inception, far more than any other. It has published thousands of titles and licensed another thousand. Then, is it really possible that Sony made such a no-brainer mistake that even average gamers (no offense here, that average gamers are not necessarily good strategists) can critique?

I guess there is far much more consideration involved in this marketing plot. Here are some facts that can change the end result of the evaluation:

• Killzone 2 is an exclusive Playstation 3 game. That is considered as one of the most important differentiation aspects among consoles today. For the console producers, these exclusives are the most important drivers for the console. From a strategist’s perspective, exclusives are one of the few fundamental things that makes price comparison harder for consumers and that prevent this market to become a commodity, price-wars battlefields.
• GameStop is the biggest game retailer in U.S (don’t know how it compares to Amazon.com for online-only business, though) and it has considerable power to influence the profitability of console producers, I suppose.
• Most of the games today have a very strong online component, which tracks users’ stats, medals, achievements etc. One component of this online world is rankings, which is arguably the biggest proudness factor among gamers.

Now, what does these points suggest? In general, demos are published because it is thought that people who are on the margin (subset of gaming population who is not aware of the game or who is not yet sure to buy it) can experience a few stages of the game in a risk-free way (demos are free, in general). And then, a certain percentage of those people would hopefully buy the game, and the demo is said to be creating an incremental demand. It looks a no-brainer feature for gamers, and also for publishers. But here are four interesting points to consider for publishers:

• For any blockbuster console game in the market today, we are talking about tens of millions of dollars development costs. A demo, which is an incremental development effort, means a considerable addition to budget. Therefore, at any point in time, publishers and developers consider the costs associated with demo development and the incremental sales forecasts it would create.
• For some games, the demo would mean make or break for the title. Think about some games that have online-heavy components. For these games to succeed, a network effect (or demand-side increasing returns, so to say) has to be established as soon as possible. Network effect is defined as users of a certain product gets more benefit simply when more users use that product. For an online-heavy game, this is vital. If you buy such a game and login to online lobby, only to see noone is online, then you are really pissed off. Probably, that player will try the online component a few more times, and if those attempts are unsuccessful the gamer is likely to list the game on ebay in a few days. This concern doesn’t apply to all games. Many games have a critical mass of users to satisfy that need. Yet, there are certainly other games which sit on the margin. For these games, demo can be critical. Demo can accelerate the purchase decision and can help the game reach critical mass earlier than the case without the demo.
• One thing easily overlooked about demos are the negative effect on demand. Everybody thinks that demos help drive sales. But what about people that are originally planning to buy the game. These people try the demo, and unfortunately, some of these people decide not to buy the game because of their demo experience. The size of this group differs greatly across titles, but it is something that really needs careful consideration.
• Channel partners (or with less sexy and more simplified name, retailers) are really key for publishers. Sometimes, what you do can piss off your channel partners. Other times, to increase your store space (against your competitor) you need to make special arrangements for your channel partner, so that it can return the favor.

Last but not least, I come to the key issue that lies between gamers and publishers. Today’s blockbuster games have a tough learning curve, and a big group of highly-competitive players trying to be the ‘best’ in the game. That is one reason (among others) that gamers flock to the stores from the first day. They need to learn and excel the game before their competitors do, so that they can beat them. That is really key. If you employ this perspective, then demo is no longer a trial tool. Demo is a training tool. Actually, it is the training tool of gamers. Let’s consider these facts:

• Demo is released a few weeks before the general release of the title. That time is vital for people to get used to controls, levels, game physics etc.
• You train in a risk-free environment. Your failures, losses, mistakes doesn’t affect your ‘online identity’. What happens in a demo stays in the demo, except the learnings and expertise you carry into the real arena.
• When there is a demo available, it is almost a requirement for the heavy-user to get it. If you consider his decision tree, the potential loss he gets if he doesn’t train is far much bigger than the immediate purchase decision, as he is likely to buy the game at some point.

Now, there are many other considerations related to this marketing plot. And the points above are only a few of them, I suppose. Yet, these points are more than enough, to illustrate that a demo plan is way beyond driving incremental sales. For Sony’s Killzone 2 approach, my intuitive conclusion is this:

Killzone 2 is an exclusive game. And it will probably be a blockbuster. But make no mistake. It is not a game for general audience. There is a very clear, concise definition of the Killzone 2 players I can envision. Arguably, a major part of those gamers are Sony’s most profitable, most involved gamers. They buy games frequently in numbers, they write comments in Playstation forums, they blog (just like I do), they create word-of-mouth, they throw game parties and they push their friends to buy those games so that they can play online. So, by releasing a Killzone 2 demo before the game launch date, you can give chance for on-the-margin buyers to try the game, or you can give it as a training tool for your prime users. Probably, if you give the demo to both, you will lose the added bonus of making your prime-users feel special. Furthermore, you can shoot two bullseye with the same bullet, if you find a way to combine this marketing plot with one of your channel partners, like Sony did with GameStop. At any point in time, when you consider your on-the-margin users, you conclude that not much will change for those users if they don’t play the demo before the release date. They can easily download the demo once the game is released, and once the prime-users are already trained. If you think most of these arguments could be true, then, you can use "People who pre-order" as a screening proxy for "Prime users". If you believe the game is likely to be a blockbuster (as Killzone 2 is a sequel to highly-regarded Killzone, there is a signal here to assume so), then you worry less about building the critical mass for general population. When those general gamers come, you know that there will already be trained, ambitious, expert gamers waiting to hunt them online.