"I’m going to talk about a subject that I think is on everybody’s mind: the economy," said Electronic Arts CEO John Riccitiello.
Speaking at a Gamasutra-attended lecture at the DICE Summit in Las Vegas, he raised the topic backed by a screenshot of Burnout Revenge
depicting a spectacular car wreck – followed by a slide highlighting newspaper headlines about job cuts and revenue losses at major publishers, including Electronic Arts.
The standard model to get through tough economic times, said Riccitiello, is to cut headcount and facilities – as EA has done with previously-announced plans for global layoffs and SKU reductions
. But in the modern market, you can’t just "save your way to success," he added.
“Our company was too big for the current economic environment,” Riccitiello admitted, “and it was probably slowing us down.”
His “recipe,” as he put it, is to decide what parts of the business are most important, invest in them heavily, and cut the remainder – looking first at what works, rather than what doesn’t.
EA actually ranked all projects internally in terms of what it considered to be the most important – and everything under a certain rank was cut.
"That allowed us to be smaller and leaner, rather than just smaller," Riccitiello explained. "All successful franchises were once new IP."
One of the CEO’s personal favorite games, he recalled, was Infinity Ward’s original Call of Duty
, released on PC in 2003 – but sequels to that game ended up being 10 times as successful as the initial entry.
And games like EA's own Mirror’s Edge
may not be blockbuster successes at first, but he said DICE’s first-person platformer "lit people’s imaginations," and demonstrated worthiness nevertheless.
So new IP is still crucial, he said, showing a screenshot of BioWare’s upcoming Dragon Age: Origins
, and taking special note to speak on Double Fine’s Brutal Legend.
"I won’t go into the details as to why we’re excited about this game," Riccitiello began, "but I wanted to quote Jake Black: ‘Have you ever really thought about really using the power of rock to kill demons? Well, maybe you haven’t, but you should have.’ I don’t think I’ve ever heard a design principle so crisply defined as that."
"Sequels can be just as innovative, just as high-quality,” Riccitiello said, showing box shots of games including Grand Theft Auto IV, Metal Gear Solid 4, Halo 3, Rainbow Six Vegas 2, Gears of War 2
, and others."
"I know you’re all under a lot of pressure,” he said to the assembled audience of developers. "Your publishers and partners are trying to cut your budgets."
“One of the things about console and PC gaming I think is worth mentioning," Riccitiello answered in response to an audience question about PC versus console development, "Is that most of us look at the NPD figures that show PC gaming on the decline. I think that’s one of the most misunderstood figures in our industry."
"PC is a growth business, and it’s a big growth business – you just aren’t seeing that at retail. …PC is not in the dire straits a lot of people in the industry think it is. …It’s actually growing faster than console, but it’s appealing to a bigger and different audience."
Riccitiello cited companies like Blizzard, EA’s own Pogo, and various Asian online developers as examples of innovative business models that are heavily PC-centric and demonstrating different types of success – and also expressed his hope that as new console platforms are developed, they can adopt more of the capabilities that allow those business models to work on PC.
An audience member asked about outsourcing, and Riccitiello acknowledged that the topic can be "uncomfortable" for many developers.
"In today’s environment, Washington wants to tell us, don’t move jobs overseas; keep them in the United States," he said. "And while I appreciate the sentiment, I can tell you without that cost savings offshore, those games just wouldn’t get made."
"We don’t hire 100 people in China to avoid hiring 100 people in California; we hire 100 people in China so we can afford to hire 30 people in California."