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Hello OUYA…Goodbye OUYA?

Today’s post comes from Ypulse Research Associate Phil Savarese, as the first in our series looking at what happens to Kickstarter success stories after the dust clears. 

 

A year ago, the new open-platform gaming console OUYA became the talk of the gaming world, breaking a Kickstarter record by earning the highest first day totals, surpassing its goal and reaching $1 million in funds in less than nine hours. It was revered for its new approach, supposedly turning the video game industry on its head for offering an open-source platform for gamers at a reasonable $99 price tag. This year, OUYA is set to compete against the release of two big next gen consoles: Xbox One and PlayStation 4. Not being able to afford a booth at E3, OUYA set up in a parking lot across the street from the venue. In response, the ESA (the organization that puts on the trade show) hired trailers to park in front of OUYA’s set up to obstruct them from view. This is an apt metaphor for OUYA: completely overshadowed by the big players. Typically, Millennials are all about the little guy, moving away from the big bad corporation to the Kickstarted. But even though OUYA made a product that got Millennials excited enough to pay for it to become a reality, it seems they missed the mark on meeting expectations. The story of OUYA is an important one for brands to hear, and if you haven’t gotten the full scoop, we’re here to help.

 

The beginnings of OUYA in June of 2012 got some gamers swooning. The idea of an inexpensive, wide-open, and hackable console that would give users the ability to demo every game before purchase was greeted with excitement. Games for OUYA are purchased online through the OUYA store and downloaded to the console, allowing users to play the games on their TVs. This concept was a revolution when considering the history of games leading up to that point. Console games are big business, big budget, high-quality, and expensive, costing hundreds for the console itself and $50-$60 per game. Mobile gaming grew with the explosion of smartphone use because though these games are of lesser quality and depth they cost only a few dollars, or in some cases are completely free. OUYA’s founder and CEO Julie Uhrman stated that the purpose is to get people back to the TV by giving them a less expensive and comparable gaming experience to the consoles that pushed them away from the TV in the first place. Couple that with the ability for independent gamers to design and publish easily on the console and the gaming world seemed sold. Wonderful!

 

But now that OUYA is ready for the masses, how is that vision being realized in the market? Well, not exactly how most were expecting. In an interview with The Verge, Uhrman stated that 27% of OUYA users have purchased a game. Others reporting on this used their statistical prowess to read that statement as: 73% haven’t spent a dime on an OUYA game. There are a couple of reasons for this, but the main one could be that there is just too much going on in OUYA’s marketplace. There are currently 300 games available on OUYA, and many of those are not close to traditional console quality. The OUYA game market is still relatively new, and it is possible that better developed games will hit the market soon, but if spending doesn’t increase, OUYA may have an issue with attracting those quality game designers who are looking to make money off their products.

 

OUYA may experience some competition when it comes to the “openness” of their console to developers as well. In a recent announcement, Microsoft revealed plans to allow independent game developers to self-publish their games by using their Xbox One console as a dev-kit (game development kit). It is rumored that the PS4 dev-kit will cost over $2,000, however, Sony has been “handing them out like candy,” and giving developers a free year of use. More affordable dev-kits may be worth the expense for the increased potential of profit, rather than programming on OUYA for free. Another roadblock could be the fact that OUYA is also on the low end in media offerings. As of now, OUYA has the ability to stream Twich.tv (a media site for gamers we discussed last week), Vevo, iheartradio, and XBMC. When considering that Xbox is aiming to become an all-in-one entertainment system, OUYA has a lot to compete with.

 

As it currently stands, OUYA still has a lot to prove, and initial reactions to the console are lukewarm at best. But we wouldn’t count it out of the gaming game completely. It may never provide quality at the level of console games, but its value lies in its daring to change the system. It’s a game console for the gamers, those who play or develop. It doesn’t seem fair to compare OUYA to the big consoles, nor can we lump it together with mobile gaming. There is no doubt that gamers wanted this product. Not every Kickstarter project raises more than $6 million. Yet the hype and backing it originally received has diminished as people began to see its flaws. It seems stuck in limbo between a really cheap console and a more expensive mobile game system. Did they find a new segment or squeeze themselves into a space that no one cares about? Either way, OUYA’s story illustrates how Millennials are ready and willing to support good ideas, but that in the end for young consumers it’s still all about the final product, and the first iteration of OUYA hasn’t managed to impress them just yet.