The declining commodities market
Owen Mahoney: writing about Hippie Snobs:
The dirty secret about differentiation, like all innovation, is that it is extremely uncomfortable. We humans are creatures of evolution. Until very recently, going off-the-beaten-path could mean getting eaten by a tiger. Today in the game industry we sit in offices with chairs but our brains are wired similarly, attuned to danger all around. Seeing past that danger doesn't come easy.
Differentiation in games is a choice. Most of the industry chooses to be a commodity, even though games are one of the few categories where true differentiation is not only possible, but expected. Many companies frame the issue of intense competition as a marketing problem, but what they really have is a product problem. It's expensive to stand out if you look like everything else. And unlike shampoo or ball bearings, the games business has high costs of production: expensive offices and high-cost development talent. Commodity returns with a non-commodity cost structure is an excellent way to lose money. Games have an infinite number of ways to innovate and differentiate. With a truly unique product you get the market to yourself. You get a monopoly.
As I've said before: You want to be creating culture and collateral. Not always at the same time but always as part of the same strategy. It's the commodity business that you want to avoid.