osewalrus (osewalrus) wrote,

A quick rant on how the market and stereotypes reenforce and drive each other

Your favorite maintream -ism seems to persist despite all market logic and all societal logic. Why? I suggest that problem is that those studying the problem has suffered from the elephant problem. i.e., We have different disciplines that examine different parts of the elephant and conclude it is because the elephant is like a snake or a wall. Worse, the way academia works, suggesting that an elephant may be a combination of a snake and a wall seems to get translated into "saying it is a snake as well as a wall is an effort to deny and undermine the essential snakeness of the elephant" or "the insistence that the wall must also (at a minimum) include a snake demonstrates the complete invalidity of the discipline that found snake and its insistance on inserting snake into the totally unrelated field of walls."

But society is complicated and complex systems have remarkable powers of re-enforcement. Worse, our failure to appreciate the elephant for what it is -- a mutually re-enforcing composite -- prevents us from understaning it or how to deal with it effectively.

Having written this specific lengthy rant as a comment on FB, I'll park this incomplete and largely unfootnoted essay here for anyone who cares.

I started with this clip from Adam Ruins Everything addressing the myth that video games are for boys.

For those who don't click through (and its only a few minutes long), the story is this. When console video games (and arcade games) were introduced, they were "for the entire family" and were generally unisex. In addition, many game designers were women. Then, after a raft of really bad games came out, the video game market collapsed and most adults stopped playing console games.

Nintendo made a marketing decision to market their next product as a "toy" rather than a family game. But the toy department was entirely sex segregated. You were either a toy for boys or a toy for girls. Nintendo picked "boy," which shifted the entire development of its video game product to things considered more "boy." This trend continued throughout the 1980s and 1990s, including the shift to the sexist and violent games that became so associated with video game culture in the popular mind such as "Grand Theft Auto."
What the clip does not show is that two industry trends, consolidation and information tracking, juiced these trends like a middle-aged professional baseball player in the 1990s. And the story of how console video games reworked their entire eonomic structure around a set of bad market stereotypes, and thus came to totally reenforce those stereotypes in the popular culture long after the video game market (and even the console ownership market) reached about a 50/50 percent split (with more women than men actually owning consols) is a story of how marketing and stereotypes mutually reenforce each other in ways that make an elephant like a trunk and like a wall. (It also shows why open platforms are so critical to gender and racial equality, but that is another story.)

What's The Economic Story? Consolidation Is Bad For Gender Equality For Solid, Economic Reasons.
As the clip shows, console games were originally marketed as toys for "the whole family." Then came the crash, and Nintendo moved their product from the electronics section to "toys." But "toys" had become thoroughly segmented into boys v. girls. While toys had always had some level of segmentation, but they also traditionally had a large non-gender differentiated section. e.g., board games like Sorry and quasi-board games like Operation and Hungry Hippo, which always showed mixed gender groups playing with them. Now comes the part the clip misses.
The 1980s and early 1990s saw an enormous boost in market segmentation based on two things. First, the consolidation of the channels of distribution and the development of bar codes and inventory tracking enabled companies to get a better (albeit imperfect) sense of who was buying what. Second, as explained by Joel Waldfogel in his book "Tyranny of the Market," consolidation leads to the abandonment of niche markets in favor of the few remaining producers and distribution channels chasing the mass market. (I will observe we routinely see cycles of mass market overwhelming niche markets, followed some time later by high-end niche market development, followed by a broader niche market development as price goes down due to economies of scale and more capacity added to distribution. Think of the craft beer market.)
So at the time when toy stores were going from local stores responding to local demand to consolidated chains relying on national trends and national data, we also saw (as we generally see in concentrated markets) an emphasis on market segmentation. Anything with even a modest twinge in one direction or the other got segmented (the same thing happened with books and other commodities, creating the rise of commoditized genre fiction and eliminating the "mid-list" authors).  So when Nintendo decided to market its console as a toy, it needed to make a decision -- girl toy or boy toy. A "game for the whole family" -- which had been the hallmark of many successful games until then -- was no longer acceptable. So nintendo chose "boy."
At that point, all the stereotypes kicked in. As the clip shows, the early games were unisex, and the early game designers included women instead of men. Games like Q-Bert, Frogger, Asteroids, Pong, Space Invaders, etc. had no particular gender orientation or marketing. Even the Pac Man/Ms Pac Man dichotomy was simply adding a bow to the Pac Man and otherwise remaining essentially the same. But for Nintendo to meet the demands of market segmenting giants like Toys-R-Us, K-Mart, it needed to make its product clearly more "boy." In particular, it needed to make its product more "boy" to the very small, homogenous population of significantly older, male executives who decided which toys to distribute to the ever smaller number of outlets.  Hence the shift to games with clearly male protagonists, male plot lines, and the ever increasing amounts of sex and violence.
It is useful to consider this in parallel with broader media trends of the 1980s and 1990s. Movies, radio and television (particularly with the rise of cable) were following similar trends. This was when the 18-34 year old male demographic became identified and catered to as the most significant for advertisers. This was when we got to see market segmentation by age, gender, race, and (increasingly) sexual orientation become the dominant model. All this was assisted by the same factors that pushed toward homogeneity. Consolidation and primitive efforts to improve sales.
Unfortunately, sexist toy design now entered the same death spiral that hit radio, television, and other major distributors. First, the effectiveness of segmentation strategies was considerably over-estimated. They tend to produce some modest upticks at first based on minor variation. In radio, for example, certain music and certain formats were modestly more successful. Since standardization and mass production allows for cost-cutting, this has a very significant effect on products. As Waldfogel demonstrates, the rational smart conglomerate chooses to pursue smaller sections of the larger, more competitive market than invest time and resources in smaller markets. The potential pay off is much bigger, than meeting the need of the unmet market, and the economies of scale reduce cost. Additionally, distribution channels optimize for the larger mass market. Consumers may show a modest initial preference for familiar and easy things that minimize the cost of choice.
So to bring this into the real world. Toys-R-Us has only so much space on its shelves. They discover that by rigidly segmenting toys by gender, race and age, they can increase profit. They respond accordingly. The majority of adults shopping for toys respond to the segmentation positively for a number of reasons. It fits their own cultural stereotypes and expectations. it reduces the difficulty in finding and producing appropriate toys. All aspects of the system cheerfully re-enforce each other.
The problem is that the differentiation is based in large part on cultural stereotypes, which therefore become reenforcing. Worse, even though the non-stereotype product is profitable, it is not *as* profitable (initially). So it gets squeezed out. The stereotypes become self-fulfilling prophecies as more of the entire industry structure optimizes itself along the lines of previous wisdom and popular success.

Why Doesn't The Market Correct?

The usual response to this is that, as the market goes unserved, that creates new openings. As Waldfogel shows, however, there are numerous factors that tend to mitigate against this -- all of which were operating at maximum warp from the mid-1980s until the 00s.

First, lets consider how the market is supposed to "discover" the unmet market need. The typical answer is that if you have a product that meets the need you bring it to market and it sells and creates a profit. This is like saying "you get to reach the moon by building a rocket ship that is strong enough and goes fast enough." It doesn't actually tell you any of the details.

This topic is too long to go into here. I'll cut it by saying that you need (a) a product or service; (b) a channel of distribution so you can actually reach the consumer; and (c) a way to alert consumers as to the presence of your product.

These things are a lot easier in some markets than others. In particular, and of most relevance to our story, this works best if an entirely new market segment is developing. How did K-Mart and Toys-R-Us displace Woolworth & Wilco? Because cars made shopping malls possible, opening up opportunities for stores that relocated to suburbs and exurbs (where they had lower costs) where they had more space for more products and better access to the growing subruban population. But without cars and roads and houses out in the 'burbs, new chain stores would not have had a chance against the older chains.

Lets get back to video games. Say you are a would be consumer who wants a game more like Q-Bert and less like Castle Wolfenstien. How do you signal that? There is no alternative product for you to buy. You can decline to buy the existing product, but that doesn't tell me you would by a similar game that was marketed to you. After all, you're a *girl*. you're not supposed to even want the product, so your failure to buy the existing product, and failure to buy the non-existent competing product, simply proves my point.

The same is true for boys who may actually like both a Castle Wolfenstien product and a Q-Bert product. The boy cannot show his demand for Q-Bert like games because they no longer exist. His purchase of Castle Wolfenstien as a substitute is considered proof that this is in fact the product he prefers rather than the product he settles for because it is available.

And, of course, all trends are mutually reenforcing on a cultural level. If these are the toys boys should want, then boys will want them, becuase human beings are social animals who take our cues from everyone around us. The economics re-enfroces the social conditioning, which re-enforces the economics.

Why Is the Re-Enforcement So Critical?

What is so critical is that you can't get rid of the social conditioning without the economics, and vice versa.

Over time, folks made some sporadic efforts to create non-sexist toys. But they were swimming upstream against a massive economic current. A single alternative, or a handful of alternatives, in a sea of mainstream products with all the power of the distribution and advertising behind it are simply not going to compete effectively.

Worse, the companies that make and distribute such products do not want them to be effective substitutes for the existing sexist toys. Big companies are interested in expanding via differentiation, not replacing. Replacing is referred to as "canabilization." As Mega Toy, you are happy if parents buy non-stereotype toys in addition to your eisting products. You do not want to actually lose customers from one line or another. That leads to economic loss (from lost inventory and sunk cost), market disruption (the opportunity for rivals to steal your customers and for new entrants to emerge), and runs counter to the divisions in the existing incumbents that make the existing toy lines.

So How Did Things Change?
Eventually, the death cycle sets in. Consumer tastes change. The increasing segmentation and targeting of the market at the most successful component leaves an ever increasing portion of the market unserved. New distribution channels begin to open to reach an increasingly unmet market.

In video games, it was the rise of the PC, followed by the Internet, followed by the phone. With the rise of new, open, low cost distribution channels, we saw the return of unisex games (as well as investment and development in a wider collection of niche games, such as first person shooter games with female protagonists). The new distribution platforms created new opportunities. Because the new distribution platforms were primarily contnent neutral, the emergence of key bottlenecks in platforms did not have the same level of impact that it did in the toy and entertinment industry.

As a result, games like The Sims became enormously popular. Online games and communities found that giving users the ability to customize their content interactively enhanced economic value. Additionally, the anonymity of use and the fact that it was adults (and then teenagers) deciding on the games in question reduced the influence of editors and other decision-making bottlenecks. The cost of bringing products to market dropped, advertising costs dropped, the ability to satisfy niche markets was resotred. The broad presence of niche markets signaled to larger producers about the diversity of need, and -- annoyingly -- much better methods of harvesting personal information and analyzing it allowed product developers to micro-target more effectively.

As a result, today the gaming word is pretty much divided 50/50 between men and women. This includes consoles, which once again boast a host of unisex games. But the stereotypes persist, which continue to impact investment, marketing and social norms. This creates, for example, a distinction between the actual market (50/50 men/women) and the existence of "gamer culture" (still heavily male). This includes a much greater number of men who identify themselves as "gamers" than women, despite the market evidence.

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