What competition really means

[Infinity]

After seeing this sad thread in another part of the forum and general widespread misconceptions about competition, I think it is time to have a talk about it.

Now, I realize this is a game. It's supposed to be fun, and what's considered fun will differ at least slightly from player to player. I realize that this game needs a bit of an overhaul in some departments.
But of late I have noticed more and more attempts to make this game into a happy little playground with equilibria in every major airport so all the airlines can co-exist in peace. This is NOT what competition is about.
I am maybe one of the few real life entrepreneurs on here, and I will tell you this: In real life, competition means that I will do everything to squeeze out the competitor. No businessman likes competition. Every entrepreneur dreams of a monopoly. That's the truth. This is how real life business works.

Again, I realize that this is a game, not real life. Monopolies in this game? Probably a bit boring. Unlike a real life business, this game does not reward with money, but with fun, and while in real life managing a monopoly yields great reward in the form of money, a monopoly in this game does not yield much fun.

But, and I again speak from experience, a tough competitive fight is what makes the game fun for me. This is why I go into big airports, because I assume other players who can put up a good fight will go there as well. And I did have a good fight in this running Modern Times game. I've had more fun than ever before in the game, but still that doesn't mean I took action to keep that fight up. I did everything to win the battle, which, after all, is what fighting is all about.

We have had changes in this game since I joined that made it almost impossible to damage a competitor that makes few formal mistakes (wrong plane choices, too many fleets, the likes). The battle that ensued in Los Angeles for me only took place because my competitor and I both strived for total domination. Had either of us decided to find a medium sized presence sufficient, nothing would have happened. How boring would that have been?

In my eyes, this game needs more incentives to compete rather than some Barbie Dream House equilibrium encouragement some are demanding. Artificially changing competition to co-existence makes the game boring. What good is competition on a route if none of my strategic choices (like pricing) affects the competition in any noticeable way? That's the way we are headed now, and it's the wrong way.

This is my opinion on this. If you think differently, you are welcome to voice your disagreement. I invite everyone to write down what competition is about for him.

[[SC] - King Kong]

Amen, totally agree

[Zombie Slayer]

Well written and thought out. Agree whole heartedly...bring back competition. Even when you could frequency rape your competitor to death, however unrealistic, at least you had a way to compete and win. What we have now has lost a lot of its luster with me and many others that I know. We need steps in the right direction, not more restrictions...

[stevecree]

Massive +1 from me too.  I was an avid player, but my online time is dwindling fast.  The thrill of affecting competitors has been removed to such an extent I think "what's the point".

I miss ABCBA routes.  I miss being able to get more that 3 a/c p/w of the used market. I miss not being penalised for oversupplying in an attempt to squeeze competition. I miss my whole alliance being able to work together at killing other alliances / airlines. Etc etc etc etc etc etc etc

The game is not the game I set out playing years ago, and as stated above the increase in restrictions has decreased my enjoyment dramatically to such an extent I barely put any effort in any more, and if I am totally honest the next step is I'll just fade away and leave AWS to its new anti-monopoly, anti-war, anti-competition future.  Restrictions in AWS suck !

There is hope, but I doubt we'll see it...

There are beginners worlds, so why not extreme worlds....where anything goes ?  No moaning, few restrictions and proper old style AWS war !  Now that would float my boat again instead of this more and more sanitised game we're playing now...which is quite frankly boring !

[schlaf]

There are beginners worlds, so why not extreme worlds....where anything goes ? 

Thats a great idee!

Go on Sami and make a "Modern Times -Extreme", a game-world where the one (me included) that like real competition can play..

I agree AWS is not even close to the game that i joined 4 years ago. It was so much more fun back than.. If you change the rules even more you gonna loose many of your most loyal players that have played AWS for years.

[AndreiX]

What you guys are saying is music to my ears... I never got to join the AWS in that time, and I regret it. These "cold wars" with competition are nothing but boring. To be onest, it is not nice to find yourself in a long format game with a big competitor with its focus in your bases (all 4). You will find yourself in a game of patience until he might make a mistake and he is not ready for it... You both get slot locked, fly efficient fleets and by the time you realise it you are coexisting with someone weather you want it or not. Oh, and IF your competitor manages to make a series of mistakes and he is not ready for them than you might have a chance to slot lock him on your HQ. But he can restart in one of your bases or a different airport in the country and than start to grow on your bases again and you can only watch this because of the 100 aircraft per base restriction. Chances are he's not gonna make the same mistake again and you will again end up coexisting... The only thing you get to do the rest of the time until the end is the fleet replacement...
+1 at least for game worlds with different restrictions/base setups
Saftfrucht, congrats for this post! Something was wrong and I could not figure out exactly what because I did not have the experience with AWS's older versions! But this is it!

[dmoose42]

I agree with saft.  We need to balance fairness towards new players with making more advanced games more competitive.  I suggest a couple things:

1) Right now we have beginner's world and everything else.  I think the idea of moving to a three tier system (beginning, normal, hard) makes sense.  Normal worlds would be very similar to today.  Hard worlds would have reduced basing restrictions, bigger pricing impact (having lower prices than competitors will have bigger impact as PAX would flock to your airline if you undercut your opponent by 20% and your planes should be full, etc).  If Sami is willing to move to this framework, I think we should add a dedicated thread to what a hard world should look like.

2) Expand ways to make money - right now the best ways to build a successful airline is through slot hoarding/restricting competition by getting all the slots.  If there are a lot of slots and two determined airlines, it is a bloodbath (which is fun in its own right) - but slots determine success and failure in AWS for the larger airlines.  There needs to be an expansion of ways to be successful.

[LemonButt]

Despite what you might think of me, I am also an entrepreneur IRL.  I also have an MS in Entrepreneurship and am a Lean Six Sigma Black Belt.

My understanding of competition is different than most because I have a formal education on the subject.  The best book I've ever read on the subject is Understanding Michael Porter by Joan Magretta (http://www.amazon.com/Understanding-Michael-Porter-Essential-Competition/dp/1422160599) which is an in depth exploration of the Porter five forces analysis (http://en.wikipedia.org/wiki/Porter_five_forces_analysis).  These same principles all apply to AWS and running an airline successfully IRL.

The best way to explain AWS is using IKEA as an example.  IKEA's innovation is that they have furniture that comes in a box that you have to assemble.  This reduces shipping costs by up to 80% relative to conventional furniture and they pass the savings on to consumers with lower prices.  They also have their own retail distribution, which is a giant showroom with a cafeteria and a warehouse (as most already know).  IKEA's business model isn't patented or otherwise protected--any company with enough money could create a modular furniture line, open a big showroom, and sell direct to consumers.  However, no one does.

In AWS, the "click and deploy" model is IKEA, except it is widely copied.  Southwest et al are successful flying nothing but B737 and any airline flying nothing but B737 will be successful in spite of themselves.  It is a proven business model and is easily mimicked.  AWS airlines can simply fly the most popular aircraft ever, which is also one of the most fuel efficient, and instead of competing with strategy, compete with price.

How can Apple (and Samsung) charge a premium for their product while nearly every other phone maker competes on price, turning mobile phones into a commodity market?  The reason is about value creation (or perceived value) and Apple and Samsung have done an exceptional job of showing how their product creates more value than competitors such as Blackberry.  AWS currently lacks the relative depth required to truly compete on anything but price and frequency at this point, which means that (ironically) AWS has turned flying into a commodity market.  jetBlue and Southwest are two great examples of competing with strategy.  Southwest has bags fly free, no blackouts on rewards, and unassigned seating.  jetBlue has DirecTV and XM radio at every seat with the most legroom available.  These are competitive advantages (true competitive advantages--the term is way overused) that attract passengers to their airlines.

I could go on and on, but the bottom line is that beyond price and frequency, there is very little an airline can do to differentiate themselves in how they create value and/or brand loyalty for passengers in AWS.  There are several upgrades that would further differentiation such as business plans, terminals, lounges, frequent flyer programs, seat pitch, in-flight entertainment, catering, ancillary fees, union/non-union, revenue management, etc. but they take time to create and implement properly.

Another excellent book that further explains the concept is The Innovator's Dilemma by Clayton Christensen, who is a professor at Harvard Business School (http://www.amazon.com/The-Innovators-Dilemma-Revolutionary-Business/dp/0062060244).  The best example to cite would be that they discovered that milkshake sales at a fast food restaurant peaked in the morning, which was counter-intuitive.  They didn't understand why they would sell so many milkshakes in the morning, so they started observing milkshake sales and chasing people down in the parking lot and find out why they bought a milkshake.  The answer was that they had a 30 minute commute in the morning and were bored.  Trying to suck a thick milkshake through a straw kept them occupied on their boring drive.  So when figuring out new milkshake flavors, they added flavors such as strawberry so that chunks of fruit would clog up the straw and keep them busy.  The company was selling milkshakes, but customers weren't buying milkshakes--they were buying entertainment for their commute.  The same goes with the airline business.  Airlines are selling seats, but passengers are buying an experience.  Right now the experience is vanilla and homogenized across all airline brands, so there is no other way to compete through differentiation.

Clayton Christensen is renowned for his theories on disruptive innovation, which is why it is important for players to have equal opportunity to compete.  Allegiant Air, for example, has engaged in disruptive innovation with their ultra low cost strategy.  They buy old MD-80s for $4 million and can sell tickets to price sensitive leisure travelers for ridiculous prices such as $39.  They have scalped the low margin segments that other airlines have gladly given up as they are low margin and thus the least profitable segments for them to chase.  They are slowly building brand recognition and loyalty and targeting higher and higher profit margin segments.  jetBlue has done the same and recently introduced their Mint product with a first class suite on transcon flights.  The problem is that if these airlines never had the opportunity to enter the market and compete, the antiquated more inefficient airlines would hold a near monopoly.  Instead, they are facing immense pressure and are forced to react (or not react).  As a result, many large airlines in the US went through various shades of bankruptcy and are still struggling to adapt.  This is the competition I want to see in AWS and is the genesis of many of my unpopular feature requests.  I would love to see an established airline out of an airport like ORD just get completely undercut by a new airline innovating by flying nothing but CRJs configured in an all-business class config.  The only way this could happen is by offering a superior product with waiting lounges, in-flight entertainment/food, etc. to pull it off.  However, if all the slots are gone at an airport or production lines are jammed up or players are working in collusion (legally or otherwise), it will never happen.  EVERY airline should be vulnerable to BK if a competitor can choose the right combination of variables to pull it off.

Currently, AWS is the most detailed/granular airline simulation I'm aware of, but obviously we have a long way to go.  With city-based demand and the metrics associated with it (tourism, industry, business) I'm hoping we see stronger segmentation and price elasticity built into the demand algorithms, which would create the infrastructure needed for implementing features such as in-flight entertainment, etc. that would differentiate airlines from each other and create a more realistic simulation where airlines are more focused on what pax are buying (in-flight experience, etc) versus what an airline is selling (seat on a plane).  The big problem is that with every new feature or change, there are unintended consequences (or as you Brits like to call: knock-ons) that happen downstream on the value chain.  Furthermore, many items just simply can't work like they do IRL, such as the first come-first served model for production slots and the used market.  Many features that "hurt mega-airlines" ensure that the opportunity for other airlines to compete isn't destroyed, but is typically met with resistance.  Everyone wants to "win", but winning against players who never had a chance because the cards were stacked against them from the word go isn't really winning.  I'd much rather have a big airline out of ORD and get BK'd by the guy flying business class CRJs than spend an entire game world dominating startup airlines because I used up all the slots and they couldn't afford the $5 million price tag to buy a set of slots (which BTW was implemented to throttle big airline growth, but really just limits competition and hurts the little guy).

This post is getting long, but ultimately competition is about competing with strategy versus "being the best".  Competition IS about airlines co-existing in relative peace because every airline has a different strategy, different product, different segmentation, etc.  JFK is shared by Delta and jetBlue, for example.  Most passengers choose one or the other based on what product they are buying.  Delta has their hooks into many business travelers due to their frequent flyer program, extensive network, and business class cabins.  jetBlue has the more "hip" market that cares more about in-flight entertainment in coach and more leg room.  They compete, but they coexist.  If an airline were trying to "be the best" and serve both segments, they'd end up with a product that neither segment would like and the airline would likely be short lived.  This is the reason that Delta launched Song to compete with jetBlue versus changing the Delta brand.  It ultimately failed, but they weren't about to change the entire Delta brand to compete with jetBlue, so they created a new brand to target the jetBlue segment.  If you want to see a more competitive AWS, the answer is competing through strategy with differentiation--not competing with price or frequency.  And the only way to ensure competition through differentiation is by ensuring new entrants to the market have the same opportunities to compete (access to slots, etc) and threaten the status quo of airlines already established.  A late joiner should be as much of a threat to an established airline as a player who started on day 1 of a game world.

[TimmyTopper]

Very well said

[Mr.HP]

Great post, LemonButt

This brought me back to my marketing class where we had a business sim. The sim was about computers, and we had to decide which segment(s) the company should chase after. You can never get all segments, because your production line is limited (like airport slots) and is very expensive to expand (terminal?). You wouldn't also get economy of scale operating many segments at the same time (flying to all thin destinations vs flying just several lean routes)

So, we got to come up with some features for your products. Each feature satisfies certain group of customers. A product which offers everything is way too expensive, and products with various (wrong combination) features might end up not desired by any groups. You got to stick with one or two groups (catering and in flight entertainment preference from DXB to Europe and DXB to Far East, for example, is not the same, and offering the same product(s) to these 2 groups would fail if someone else can get exactly what they want)

Then, we had advertising to boost awareness and channels for increasing availability. Many advertising media and they have different impact on different groups. Then, you got to choose which feature should be emphasized more/less. The same for channels

We were clear leader for the majority of the time, but then we expanded too much in other categories, and suffered heavy loss. Competitors were being niche players, and they took the chance to close the gap between us. They almost drove us to BK, if they had more time (the sim ended after a period of 8 years)

I want the kind of competition like that where we have much more ways to compete, and "EVERY airline should be vulnerable to BK if a competitor can choose the right combination of variables to pull it off", like LemonButt said

[Cardinal]

A late joiner should be as much of a threat to an established airline as a player who started on day 1 of a game world.

Sad fact: many of the restrictions put in place to supposedly prevent the big, established airlines from getting so big are the same restrictions that make it more difficult for startups to have any chance against established megacarriers.

The used market restriction is the most glaring example. Having to call the market and only getting 7 calls a week was necessary because somebody used a browser plugin that hit F5 every few seconds, bogging down the server and effectively breaking the game. But the 2-planes-a-day/3-planes-a-week restrictions were put in place to keep airlines from growing too fast. Which in turn keeps startups from being able to grow and compete with the established fortress hub, so the existing airline has plenty of time to react to a startup that can only lease 3 planes a week.

And many of the rules designed to punish success were the result of new and newish players who joined thinking they could re-create their favorite airline in a week, and complained when they found out running an airline is hard work, and blamed it all on the big guys who wouldn't willingly dump half of their routes so they could "share" the most competitive airports in the world.

I've long thought that the Modern Times scenario, which is where the newbies immediately flock with visions of grandeur, should be achievement-locked. Meaning that you have to achieve a certain level of success in Jet Age or DOTM or even one of the mini-scenarios (Asia Challenge) before "unlocking" access to MT. The 21st century has not been kind to the airline business and the MT scenario reflects that. It's supposed to be difficult. Fuel prices skyrocket, planes are much more technologically advanced and therefore cost a fortune, and global recessions dampen demand. That's the airline business. Figuring out how to deal with it is the whole point. Complaining to the admins that competition is only fair if you're the one competing is what you'd expect from players of a Facebook app, not people seeking out a game designed by aviation enthusiasts for aviation enthusiasts.

Eventually, all the complaining that "that doesn't happen in real life" leads to a "simulation" turning into a "re-creation". A simulation means starting from the same point but "what happens if I do this instead?" which can have spectacular (or spectacularly disastrous) results. Which is part of the fun. Forcing everything to reflect the real world exactly is a re-creation, which is boring.

[lilius]

Which is the "co-exist in peace" thing we are talking about here?

[stevecree]

Have a word with fellow SC airline Test 5. He has played an excellent game, and may I add tried very hard to remove me...but it isn't happening, and visa versa.  We both have no choice but to sit out the next 15 game years co-existing in complete boredom, with no hope of either of us being able to remove one another.  This was never the way previously, as with enough "pressure" it was entirely possibly to remove competition. The "war" factor was the best thing about AWS, but with targeting frowned upon and the numerous restrictions imposed then the most fun part of the sim has been killed.

I realise Sami has customers that was a tranquil life at the same time, but things have gone to far to protect airlines in non-beginners worlds, and it is boring the death out of those that like, and want, the aviation version of WW3. As I said previously those that want cut throat are being neglected...and will drift away.  All tastes should be catered for, and an extreme world would provide the thrill that many once got from AWS.

I want to wipe people out, and want people to try and wipe me out, I would like full on wars between airlines and alliances...but neither is possible these days if airlines are well run, and I have to ask myself over and over again recently why do I bother paying for a game I do not enjoy a fraction as much as I once did.

People may not agree, therefore non-extreme worlds would be for them, but please somebody listen to those that are not happy with co-existing and want a little more fun in their game.

[lilius]

The reason we cant "kill" airlines anymore is because most players who do get big are much smarter these days. Players have learned how to play and to setup their airlines to be much more safe from attacks - and at the same time fuelprices in JA and DOTM have been pretty much easymode.

Im hoping for more regulations from Sami to improve competition even more between airlines. Not less.

[stevecree]

What is clear is what some enjoy others don't, hence I suggested different game worlds.  It is clear something has changed over the years, and as you can see by the posts on here a good few are not so keen anymore. It also has little to do with airlines being better these days, as historically some very big and experienced airlines were forced into BK'ing, it has more to do with regulation levelling the playing field to such an extent that war is pointless and achieves nothing but hurting your own airline, therefore the games has become more than a little boring for some.   More regulations would see me take up knitting instead for sure, but after playing for 4 years then maybe my time is up here anyway, and its time to move on to something I actually enjoy playing again  

[dmoose42]

If we increase the price sensitivity of passengers, then you will get your wars

[LemonButt]

Mr.HP--I have done the marketplace simulation also and it further drives the point home that competition means competing with strategy versus competing to be "the best".

There are two ways to have the tallest building in town: http://www.wildfiremarketinggroup.com/two-ways-to-have-the-tallest-building-in-town/

Scorched earth isn't competing.  Michael Jordan needed Larry Bird, FedEx needs the post office, and Pizza Hut needs Dominos.  Competing means actually having a competitor--not locking the doors and throwing away the key.  Right now, many airports (my HQ in DOTM included) are slot locked or so overwhelmingly difficult for a competitor to enter that there is ZERO competition and there never will be.  This is a business simulation, not military conquest.

[BD]

Two words:  Existential Threat

No airline, no matter how big they get, should face the possibility in this game of BK within five to ten game years from a well played newcomer competitor.

Competitive advantage should come from "earned success" vs manipulation/exploitation of game "loopholes, weaknesses, or imbalances" or from unethical behavior.

The administrative tasks also give advantage to those with 24/7 commitment.  A player should not have to schedule his/her day around the game.  But that all depends on Sami's "target market".  I view it as a game weakness.  This, perhaps, is a separate discussion.

If not an existential threat, where are players finding "fun" after virtually monopolizing the largest airports within the first 10 game years and maxed out on four additional bases, amassing a vast fortune so as to be untouchable for the remainder of the game well before it is half way through? 

This is my first serous game world outside of BW, so after a few more such games and a couple of years of play, maybe I will find out. 

[Saul Goodman]

I agree.  Over the years, restrictions have piled up to a point where it can become boring.  Certain restrictions can certainly be relaxed or removed in certain games. 

[Sami]

We have had changes in this game since I joined that made it almost impossible to damage a competitor

May I ask what are these changes in your mind?

Okay. 3-leg routes were removed in favour of bases, since they were by no means realistic with those rules (though base limits, number of planes per base or number of total bases, is something that may need changes). And there has been changes to the rules, like the oversupply rules, but all these rules and what everyone seem to call as "restrictions" are coming because someone has been nasty and doing something wrong. Aircraft market calls, slot system changes and so on - all because of people trying to "game the game". These unfortunately take a large portion of my time, but it's not any surprise really.

For one hardcore player there are at least ten normal players, roughly, and if we'd play with "no rules" the end result would be even fewer players left in the games. So in other words there has to be a balance between the several player profiles. Creating different worlds with different set of rules is probably not worth the trouble, since the earlier "challenge" games have not had a very large turnout all the way to the end (plenty of players to start with but loss of players is very high compared a regular game).

Anyway - there is a very clear path of development and it is to make the worlds more dynamic and responsive to player actions. The demand system changes are one thing for the future, but already the new passenger allocation system (=ticket sales) has changed things a lot.. But I see that people do not seem to notice that still at all and happily fly along with the suggested ticket prices all along... But tweaking the prices can make a big difference already (but still the price management tools are poor making proper price management hard ... and those functions are to be updated during winter, after the accounting system is done).