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Konami uses SAP to sell direct to gamers

Konami Digital Entertainment is using SAP software in a speedy project that placed its most popular video games online for the holidays.

REDWOOD CITY, Calif. -- Gamers seeking the latest version of Dance Dance Revolution, Coded Arms and Teenage Mutant Ninja Turtles, can purchase the titles straight from game maker, Konami Digital Entertainment, which is selling the games directly to customers for the first time.

Experience functionality and then expand rather than go with a big-bang approach.
Srini Katta,
CTOiServiceGlobe Inc.

Dozens of Konami's video game titles are being sold directly to gamers after the company completed an SAP project to launch a new Web site in time for the holidays. The site went live in November after only eight weeks, said Daniel Laskowski, director of IT at Konami.

"We saw this as another way to reach our customers," he said. "We want to reach the people who don't shop at Wal-Mart and Target for their video games."

Konami decided to go live with version 4.0 of mySAP Customer Relationship Management (CRM), integrating the e-commerce features with the company's SAP R/3 Enterprise system. Using a best-of-breed vendor was rejected since company executives wanted the software to integrate easily with back-end systems and get the project completed quickly, Laskowski said.

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Konami is trying to maneuver itself to have the right systems in place to handle advanced gaming consoles, according to Laskowski. The project also lays the foundation for the company to experiment with different ways to offer the games to customers. Advanced gaming consoles, like the Xbox 360, can connect to the Internet, allowing gamers to download game updates and eventually new titles.

"This is a new way to increase revenue and expose our sales and marketing to customers in a different way," he said. "We're also still focusing on making good games and distributing those games through our partners."

The project cost the company less than $500,000 to implement. By bypassing its wholesale business, the company is able to form a direct relationship with its gamers by selling video games and other products to them. Eventually, the company plans to build a community around its products, building a network of gamers around the site, Laskowski said.

So far the system has had relatively few glitches. In addition to allowing a customer to purchase a product, the Web site gives descriptions and shows screenshots of popular video games. It also links to the official video game site and allows gamers to download patches and sign up for a newsletter to receive important game updates.

The new site connects to the company's R/3 system and the mySAP CRM system to fulfill an order and provide a tracking mechanism for every purchase. For example, the existing setup in the R/3 system is being used to give customers a tracking number for the item they purchase. A warehousing operation is outsourced and already in place as part of the company's servicing of retailers, he said.

Srini Katta, who serves as chief technology officer of iServiceGlobe Inc., was brought in to help coordinate the project. Katta, who has implemented and managed more than a dozen SAP CRM projects in the areas of mobile sales, Internet sales and CRM Analytics, said the project was completed in record time to meet its strict deadline.

Katta said the project's success was due in part to understanding and locking down the project requirements to avoid scope creep. Power users were also identified to help move the project along, he said.

"Think big and then hone your vision and start with a limited scope," he said. "Experience functionality and then expand rather than go with a big-bang approach."

In phase two of the project, the company plans to add more features to its initial Web site. Sales and marketing, which has not had a lot of experience working with direct Internet sales with customers, has been doing a lot of research, he said.

Possible cooperative agreements with several Internet sites are in the works, including one with Meanwhile, the company is trying to develop a Web strategy to strengthen the gaming community around its products.

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it was the next logical step. It cuts distribution costs. I can see more sites like Steam becoming mainstream marketing tools.