Tuesday, June 19, 2012

Peak Games - Differentiation Based on Cultural Competence

How a Turkish Gaming Startup snagged the global No. 3 spot by offering more culturally relevant content to the growing Turkish, Middle Eastern & North African markets. 

Located in the backroom of an air-conditioner store owned by the father of one of its three founders, Peak Games comes from the humble beginnings that often proceed greatness.  Launched in 2010, Peak Games began by creating an online adoption of the popular Turkish tile game, Okey, for Facebook. Okey now has 18 million users.

In 2010 Turkey was the fourth largest country represented on Facebook; it has since dropped down to seventh place, according to Socialbakers. Still, the founders recognized a Blue Ocean opportunity to increase the market by providing culturally differentiated products at a point when established game developers were merely translating American versions for the Turkish market. This simple, yet profound differentiation strategy is a perfect example of the customer value referred to in the HBS article, 'Types of Strategy: Which Fits your Business?" According to this article, customers will show their appreciation of this differentiated value by either choosing your product, paying a premium, or both. Already, Peak's revenue increased over 600% since last year and the company has grown, with "200 employees in Turkey, Saudi Arabia, and Jordan," and "over $20 million in funding from investors in Belgium, Germany, and the Middle East."


Now Peak is looking at the next possible gold mines: creating 'global' games that are not culturally specific, but still inclusive (via translations and some diversity of references) and continuing to create culturally specific products for other emerging markets in South East Asia.

Peak is still relatively new and still has a lot of potential new customers to engage in the MENA region, where it is familiar with the culture and can differentiate its products. Is the expansion into other, less familiar regions or a more 'global' market too fast? Do they risk loosing that customer value proposition that propelled them to No. 3 in the global gaming industry?

Source: Winter, Caroline. "A Turkish Startup is the Sultan of Social Gaming." Bloomberg Businessweek.June 19, 2012.  http://www.businessweek.com/articles/2012-06-19/a-turkish-startup-becomes-the-sultan-of-social-gaming 

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