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May 04, 2007

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Charlie Cleveland

Great stuff Nabeel, as usual.

You should check out The Experience Economy for more on this. The basic premise is that you get more value as you move "up" the chain from commodities to goods to services to experiences and finally, to transformations. Going up the chain affects people more and is worth more.

The classic example is a cup of coffee. The coffee beans by themselves cost maybe a cent or two to make a cup of coffee (commodity). A cup of Folders might be 10 cents. A cup of coffee at a diner might be $1.50 and cup of coffee at Starbucks can be upwards of $3. What you get at Starbucks is at its essence the same thing, but you're also paying for the Starbucks "experience" - the furniture, the cool location in your neighborhood, the good music they play, etc.

What's particularly exciting to me is that video games are clearly all about experiences, but designed well, have the distinct potential to be about transformation as well. This makes the most money, but more importantly, can affect people the most profoundly as well.

-Charlie

Patrick

But Charlie, I think you're under-emphasizing the service step. Most games are maximized by the conventional production process as goods to be bought. That business model has been a historical accident of distribution nessecities. If you're really going to effect an experience, you've got to have a service that enables a community. For instance, people who buy a "premium" clothing brand like RUEHL do it in large part because of the social implications, the experience stands on that foundation. I can see how you were getting at that with Natural Selection, and thats the gist of most MMOs, Web 2.0 start-ups and casual destination sites.

I think thats worth emphasizing because there are a lot of new, interesting business models in that vein. A clothing store gets away with selling goods as experience because its a physical place, but maybe on the net you need of the fluidity of a model other than a sales conversion. However, you can sell games in the traditional sense and still engender a community experience. A great example of this is the DROD forums.

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