word-of-moth – Social Blog

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I guess you’ve all heard of the YouTube celebrity Felix Kjellberg A.K.A. Pewdiepie. If not, he is the most subscribed YouTuber with an astounding 40 million subscribers, mostly playing ‘indie’ or unpopular videogames while live commentating the event. In 2015, his annual income is estimated to be 4 million dollars a year and his net worth is estimated around 16 million dollars. And he’s only 25 years old! (Net Worth 2015)
Where does all this money come from?

First, let me freshen up your memory by explaining the phenomenon called ‘Social Commerce’. “Simply defined, social commerce is the fusion of social media with e-commerce or basically the concept of word-of-mouth applied to e-commerce.” (Marsden 2010)
So, in the case of Pewdiepie’s channel there are some signs of social commerce. For example, every month Pewds gets a package containing several collector items which are all related by theme, like ‘Villains’. He unboxes the items on screen and comments on them. At the end of the video he advises people to also buy these ‘Loot Crates’. The video below is one of the examples of this word-of-mouth on his channel.

Another important way companies gain a lot of awareness is when Pewdiepie plays their game. Then, the so-called Oprah effect comes into force. The Oprah effect is the effect that an appearance on a famous show can have on a small business. (Investopedia 2015) Because Pewdiepie nearly has 10 billion views, a recommendation can have a significant influence on the game developers.

Not a lot of people know that Pewdiepie actually is signed under Maker Studios, a company owned by Walt Disney, which produces videos for channels on YouTube. (Maker Studios 2015) The funny thing is, Pewdiepie says in his videos that he never gets paid to promote the videogames he plays. (YouTube 2015)

Is he telling the truth? Or is he lying and exploiting all of his subscribers? That making money is his main motive?
What do you guys think?

References:
– Investopedia (2015) Oprah Effect http://www.investopedia.com/terms/o/oprah-effect.asp
– Maker Studios (2015) Makers http://www.makerstudios.com/makers
– Marsden, P. (2010) Social Commerce: Monetizing Social Media, Hamburg: Syzygy.
– Net Worth (2015) Pewdiepie http://www.the-net-worth.com/2015/05/pewdiepie/
– YouTube (2015) Pewdiepie https://www.youtube.com/user/PewDiePie/

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As we could see in this weeks readings, “[…] firms increasingly rely on “network” and “viral” marketing strategies” (Hill et al. 2006, Manchanda et al. 2008, Nam et al. 2010, Retrieved from Aral, & Walker, 2011) in order to drive the product adoption and sales. So basically, the attention is paid on how to make products viral using marketing strategies and campaigns instead of how to design products that can turn themselves viral (Aral, & Walker, 2011). So I was thinking of a good example of a product that went viral without using any marketing and what came to my mind was Minecraft.

Probably most of you heard or even played Minecraft, but for those who don’t know, it is a sandbox indie game that has its unique look of everything being boxy and sharp. It is not one of those high-profile games with sick graphics and real-life feeling to them. So how is it possible that a game that is not made to be perfect and not made to be fully marketed has earned its huge worldwide success?

While trying to answer this question, I came across a couple interesting articles (Minecraft, the worlds most successful casual game, Why Minecraft is so popular) which all showed some different aspects of the game that made it a blockbuster. However, the one that interested me the most was the fact, that word-of-mouth was one of the factors that facilitated the popularity of the game. So how is it possible that the game became so successful having no advertising/marketing budget, using only word-of mouth? Well I do not think this strategy from the side of the company was on purpose. Minecraft community is fairly tight, anybody can play the game, old/young, gamers/non-gamers. Thus, the whole platform is fueled by people, their engagement, so word-of mouth becomes something natural.

It is only to be discovered why exactly this works. What do you think? Do you know of any other platforms that use this strategy (on purpose or not)?

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