It was only a matter of time. Reportedly making billions of dollars a year and having spurned a rumored $6 billion acquisition offer from Google, Groupon’s group buying model is being copied and adopted to every market and every corner of the world.
OpenFeint, among the most forward-thinking companies in the mobile game app space have announced the launch of Game Channel and a new feature called Fire Sale, in an attempt to bring Groupon mechanics to the Apple iTunes Store and Google’s Android Marketplace (if you’d call that mess a marketplace). But, with a few twists since GroupOn does not control the commerce portion of Apple’s and Google’s Store.
The way Game Channel and Fire Sale works as is so: Every week, OpenFeint will promote paid game to its base of 50 million users to say they want the game. If enough people vote that they want the game, the price of the game will drop (say from $1.99 to $.99) and OpenFeint will push the sales offer to anyone who voted they wanted the game deal. The Games Channel will also feature a Daily and Weekly Free Game App of the Day.
So, it’s not exactly Groupon since to be Groupon, you need to control the store, but it is designed around group-commerce dynamics.
Will it work? A big reason that Groupon works and a challenge to game companies is that the discounts are relatively big. If Groupon offers me a spa treatment and manicure (it’s for my wife, I promise!) for $50 that is normally $100, then I can be pushed to click on a deal right now. That’s a big savings.
But with a game on the iPhone or iPad, the price of the game is normally $1.99 – $9.99 (and I am being generous about the high end, nothing sells at $10 unless you own an iPad). So, assuming a 50% for voting with the group, you can buy a game at $1.99 for $.99. A nice savings, but if I was not going to buy the game at $1.99, $.99 is not that exciting to me.
I am likely to vote to say that I will want to see the game discounted (duh, why not?) But, if I can a notification that the game has been voted as going down in half, my first thought is: I wonder how long it will be until the game is offered for free. With freemium the wave of the future on all platforms, this whole price exercise could be a neat experiment but pointless, if gamers expect everything on their iPhone to be free.
Which brings up my last point. OpenFeint’s Fire Sale idea is not necessarily about selling games. It could be about getting enough people to click to play the game to push that game in Apple’s Top Game List, which acts as an accelerator on game sales. OpenFeint’s goal may be to help game developers sell more games through getting into Apple’s Top Game List (“on the deck) instead of through it’s Fire Sale product itself.
In which case, a Groupon for games could be a failure, but Open Feint’s Fire Sale could be a success.