[In this analysis via big sister site Gamasutra, Harvard Business School grad Aland Failde explains how the way grunge music's birth via Nirvana disrupted the music industry holds essential lessons for real innovation in a genre-bound game industry.]

"Most of Nevermind is packed with generic punk-pop that had been done by countless acts from Iggy Pop to the Red Hot Chili Peppers… the band has little or nothing to say, settling for moronic ramblings by singer-lyricist Cobain."

– Steve Morse of the Boston Globe, first review for the album Nevermind

During the heyday of spandex, excessive use of hairspray, and sing-a-long hair metal anthems, a tiny music scene called grunge managed to rise to greatness, as evidenced by Nirvana’s rise to the top of the music charts. The over-saturation of glam bands in the late eighties and early nineties is a perfect analogy for what’s happening to the gaming industry today.

More and more big budget releases are coming out in similar genres (Modern Warfare 2 and Bad Company 2, anyone? or how about Rock Band vs. Guitar Hero?), which is creating a plethora of strategic issues for those of us in the industry.

As game designers and marketers, we’re dealt the heavy task of cutting through the clutter and making our creations stand out. In a world of massive marketing and development budgets, how do smaller budget indie games and/or new IP from major publishers succeed amongst major game releases?

Just as grunge music succeeded in the wake of glam metal, there must be a solution. A new book suggests brands that reverse their thinking and delight consumers in unexpected ways will prevail (more on that later).

Do Mega-Blockbusters Serve The Greater Good?

What’s happening today in the game industry is a phenomenon that Prof. Anita Elberse at Harvard Business School calls the “Blockbuster Trap.” In this repetitive cycle, video game companies attempt to replicate the success of competitors by imitating “winners” and increasing their own level of investment.

Their success causes other video game companies to follow suit, causing investment levels in the industry to catapult. As the level of investment goes up, companies become more risk averse, and are more likely to try and copy their own successes (You've seen a ton of vampire brands and will see even more, thanks to the “Twilight” series!).

So how does this translate to the video game industry? The biggest releases in the industry - Guitar Hero 5, The Beatles: Rock Band, Halo: ODST, Modern Warfare 2, Battlefield 2: Bad Company - have been mostly sequels or modified iterations of past successes.

But before you burn your proverbial spandex pants and begin to pretend you don’t know the lyrics to “Every Rose has its Thorn,” let’s first consider that these massive blockbuster games do actually serve the greater good of the industry.

In addition to macro trends like attracting more gamers and increasing the share of consumer spending for gaming related products, these tent-pole game titles help create a virtuous cycle where success helps breed success. Consider that a company making large investments in producing major video game blockbusters is more likely to attract the top industry talent, because top tier talent sees larger investments as helping improve the odds their creations will be a hit.

Thus, the bigger the releases, the more talent they’ll recruit, the more likely they’ll put out great games, and so on… and so on... Voila! They have a virtuous cycle where success helps breed success.

Think Grunge

Let’s not forget the next generation of top creatives (maybe it’s you?), since historically many careers have been built on high-risk investments by publishers and developers (Halo, Sim City, Gears of War, World of Warcraft, Call of Duty, Guitar Hero etc.).

These new thought leaders will either consciously or subconsciously look for the organizations where they’re most likely to succeed (see Figure B), which typically equates to organizations that are willing to invest more money in creating blockbusters.

Herein lies the problem: Massive blockbuster games are good for the industry, but as power in the industry continues to shift to fewer publishers, what happens to the level of creativity in the industry as most of the major players increasingly focus on blockbuster strategies, as EA, Activision, Square Enix, and Ubisoft have announced?

How can the industry break the creative trap that comes with major winners and ensure that new IP and indie games have a chance at success? A new marketing theory suggests that the answer is to think grunge, not glam.

"Reverse Brands?

In her new book titled Different: Escaping the Competitive Herd, Harvard marketing Prof. Youngme Moon discusses a theory she developed called “Reverse Brands.”

As the theory goes, brands that have found themselves in industries strife with fierce product augmentation (remember when toothpaste didn’t whiten, control tartar, and freshen your breath?) find ways to reinvent themselves by making their products simpler/more bare bones, while still delightfully surprising their customers with unexpected features.

Take IKEA, for example, and its reverse positioning of the furniture retail industry. Before IKEA, the furniture retail industry was engaged in an ongoing customer service war, causing it to add new services year after year (home delivery, extensive warranties, pre-constructed furniture, and pushy sales people). These investments in customer service continued to erode the margins for retailers, but were necessary since customers had come to expect them.

By utilizing reverse positioning, IKEA stripped furniture retailing back to basics and added new and unexpected things (theme park experience, cheap delicious food, babysitters, etc.) that left customers feeling fulfilled while helping them forget the attributes they lost.

This theory can be applied to creative industries, as seen in the example of Nirvana in the wake of the glam metal music scene. While glam bands continued to “out glam” one another with more hairspray, elaborate stage shows, and wicked orchestra-backed ballad, along came a music scene that countered many of the things the glam scene held dear - no frills, back-to-basics, punk infused rock-n-roll.

They weren’t completely different, of course; grunge still had catchy hooks and a sex, drugs and rock-n-roll aura. Instead, grunge turned some of Glam’s strengths into weaknesses, such as the glitter driven image and the “let’s party and sleep with groupies” lyrical content of many hair bands (see Figure C for visualization of Nirvana differentiation).

So what does this mean for you, as a game designer or marketer? Let’s presuppose your boss comes to you with the insane idea of releasing a new racing simulation game for consoles. Just in case you’re unfamiliar with the racing simulation genre, it happens to be very crowded with plenty of quality brands like Forza, Need for Speed and Project Gotham competing on attributes such as types of cars, intensity of graphics, and realistic controls.

The first step is to look at the big picture and plot out racing game attributes similar to the Nirvana visualization above. To find the appropriate attributes, you’re able to keep it low budget by posting an anonymous post on the Yahoo! Answers service or scanning GamerDNA.com for postings about racing games.

After plotting out a few attributes, you can begin brainstorming ways you might possibly reverse position the genre. Maybe we lose the “realistic” aspect and differentiate by coming up with concept cars only? Perhaps we go for uber-realistic cars and controls, but decide to go for a more cartoon-esque graphical interface?

While some of the ideas you develop may seem ridiculous, it’s this type of creative variance that can ultimately lead you to your sweet spot. The same brainstorm scenario that applies to game design can also work for marketers hoping to break through monotonous advertising clutter.

I bet many of us would not be able to tell the difference between an ad campaign for Project Gotham or Forza, if the brand names were stripped away. So why not brainstorm and ask yourself if there are ways to reverse-position your game?

While this article builds a positive case for reverse positioning and other methods of helping you innovate, there’s always a danger associated with the execution of any great idea. If you’ll indulge a bit of tongue in cheek, it would benefit you to Google “Scott Williams” and “Nirvana on Ice” as an example of the line that exists between what may sound good in theory and what is actually applicable.

Whether you’re developing for social networks or console, marketing what makes your game brilliant is crucial in the war for the hearts and minds of gamers.

[Aland Failde is a recent graduate of the Harvard Business School. Prior to Harvard, he played drums in a hardcore metal band and managed the media advertising business for Yahoo! Games. He began his career in Media/Entertainment at Warner Bros., where he was one of ten global trainees selected for a one-year rotational leadership program in children’s entertainment. Aland holds a BA in Spanish Literature and Business Administration from the University of Redlands.]