Resolving Ethical Business Challenges *
Business Ethics and Organization Social Responsibility (MGT 422)
Kent was getting pressure from his boss, parents, and wife about the marketing campaign for Broadway Corporation’s new video game called “Lucky.” He had been working for Broadway for about two years, and the Lucky game was his first big project. After Kent and his wife, Amy, graduated from college, they decided to go back to their hometown of Las Cruces, New Mexico, near the Mexican border. Kent’s father knew the president of Broadway, which enabled Kent to get a job in its marketing department. Broadway is a medium-size company with about 500 employees, making it one of the largest employers in Las Cruces. Broadway develops, manufactures, and markets video arcade games
Within the video arcade industry, competition is fierce. Games typically have a life cycle of only 18 to 24 months. One of the key strategies in the industry is providing unique, visually stimulating games by using color graphics technology, fast action, and participant interaction. The target markets for Broadway’s video products are children aged 5 to 12 and teenagers aged 13 to 19. Males constitute 75 percent of the market. When Kent first started with Broadway, his task was to conduct market research on the types of games that players desired. His research showed that the market wanted more action (violence), quicker graphics, multiple levels of difficulty, and sound. Further research showed that certain tones and types of sound were more pleasing than others. As part of his research, Kent also observed people in video arcades, where he found that many became hypnotized by a game and would quickly put in quarters when told to do so. Research suggested that many target consumers exhibited the same symptoms as compulsive gamblers. Kent’s research results were well received by the company, which developed several new games using his information. The new games were instant hits with the market. In his continuing research, Kent found that the consumer’s level of intensity increased as the game’s intensity level increased. Several reports later, Kent suggested that target consumers might be willing, at strategic periods in a video game, to insert multiple coins. For example, a player who wanted to move to a higher level of difficulty would have to insert two coins; to play the final level, three coins would have to be inserted. When the idea was tested, Kent found it did increase game productivity. Kent also noticed that video games that gave positive reinforcements to the consumer, such as audio cues, were played much more frequently than others. He reported his findings to Brad, Broadway’s president, who asked Kent to apply the information to the development of new games. Kent suggested having the machines give candy to the game players when they attained specific goals. For the teen market, the company modified the idea: The machines would give back coins at certain levels during the game. Players could then use the coins at strategic levels to play a “slot-type” chance opening of the next level. By inserting an element of chance, these games generated more coin input than output, and game productivity increased dramatically. These innovations were quite successful, giving Broadway a larger share of the market and Kent a promotion to product manager. Kent’s newest assignment was the Lucky game—a fast-action scenario in which the goal was to destroy the enemy before being destroyed. Kent expanded on the slot-type game for the older market, with two additions. First, the game employed virtual reality technology, which gives the player the sensation of actually being in the game. Second, keeping in mind that most of the teenage consumers were male, Kent incorporated a female character who, at each level, removed a piece of her clothing and taunted the player.
Numerous target consumers, according to research, had symptoms similar to those associated with pathological gambling. Using Kent’s research findings, the business was able to create numerous new games that were favorably welcomed by the general public. They were an instant hit with the market when they were first released. The consumer’s intensity level increased in tandem with the game’s intensity level, as Kent discovered in his subsequent studies. According to a number of stories, Kent speculated that target consumers could be prepared to insert numerous pennies into a video game at critical points throughout the game. For example, if a player wishes to advance to a higher level of difficulty, he or she must insert two coins; in order to play the final level, three coins must be inserted. Kent discovered that the notion did indeed boost gaming production when it was put to the test. Moreover, Kent discovered that video games that provided positive reinforcement to the player, such as aural cues, were played far more frequently than others. He presented his findings to Brad, the president of Broadway, who urged Kent to put the information to use in the development of new games on the Broadway platform. As an alternative, Kent suggested that the machines reward players with sweets when they achieve specified objectives. A modification of the concept was made for the teen market, with coins being returned to players after reaching specific stages in the game. Using the coins, players could then utilize them at crucial points in the game to participate in a “slot-type” chance to access the next level. With the addition of a random element, these games generated significantly more coin input than they did output, resulting in a marked improvement in game productivity. Broadway gained a larger part of the market as a result of these developments, and Kent was promoted to product manager as a result of this achievement. One of Kent’s most recent assignments was the Lucky game, a high-octane situation in which the objective was to eliminate the adversary before being eliminated. Through the addition of two features, Kent enhanced the slot-type game aimed at the elder market. First and foremost, the game made use of virtual reality technology, which gave the player the sense of actually being present in the game world.. First and foremost, Kent inserted a female character who, at the end of each level, removed a piece of her clothing and insulted the player, bearing in mind that the vast majority of young consumers were male.
A win at the highest level left her nude. Test market results suggested that the two additions increased profitability per game dramatically. Several weeks later, Brad asked about the Lucky project. “I think we’ve got a real problem, Brad,” Kent told him. “Maybe the nudity is a bad idea. Some people will be really upset about it.” Brad was displeased with Kent’s response. Word got around fast that the Lucky project had stalled. During dinner with his parents, Kent mentioned the Lucky project, and his dad said something that affected Kent. “You know, son, the Lucky project will bring in a great deal of revenue for Broadway, and jobs are at stake. Some of your coworkers are upset with your stand on this project. I’m not telling you what to do, but there’s more at stake here than just a video game.” The next day Kent had a meeting with Brad about Lucky. “Well,” Brad asked, “what have you decided?” Kent answered, “I don’t think we should go with the nudity idea.” Brad answered, “You know, Kent, you’re right. The U.S. market just isn’t ready to see full nudity as well as graphic violence in arcades in their local malls. That’s why I’ve contacted an Internet provider who will take our game and put it on the Internet as an adult product. I’ve also checked out the foreign markets and found that we can sell the machines to the Mexican market if we tone down the violence. The Taiwanese joint venture group has okayed the version we have now, but they would like you to develop something that is more graphic in both areas. You see, they already have similar versions of this type of game now, and their market is ready to go to the next level. I see the Internet market as secondary because we can’t get the virtual reality equipment and software into an Internet mode. Maybe when PCs get faster, we’ll be able to tap into it at that level, but not now. So, Kent, do you understand what you need to be doing on Lucky?”
1. Identify and discuss the ethical and legal issues? What are Kent’s options? (600 words)- 5 Marks
2. Discuss the acceptability and commercial use of sex, violence, and gambling in the United States. (Minimum 2 options & 2 consequences, 400 words)- 3 Marks
3. Are marketing sex, violence, and gambling acceptable in other countries if they fit their culture? (At least 2 options, 300 words)-2 Marks
*This case is strictly hypothetical; any resemblance to real persons, companies, or situations is coincidental.